Loans to help people out of poverty With five children to feed on a wage of 63 cents a day, Yumina and her family struggled to survive in their small village in West Timor. A small loan worth about $A460 changed their lives. "I decided to start a business selling vegetables and a loan enabled me to establish it," says Yumina. Now I have my own capital and a better income and we can build a better house. My older children have completed their high school education and I can even afford to send my first child to college. I am so grateful for the changes that have happened in our life. Microfinance is the provision of financial services, like small loans or insurance, to entrepreneurs and small businesses. It's designed to help those living in poverty, who don't have access to formal banking systems. "These people turn up at the bank and they'll just get turned away at the door - the doorman won't let them in let alone give them an account," says Malcolm Broomhead, a BHP Billiton director and chairman of port and rail operator Asciano. Mr Broomhead was inspired by microfinance during a business trip to India in 2004 when he visited projects run by Opportunity International. He is now a member of their advisory board. There, he met a woman who, with a $100 loan, started a bicycle hire business which enabled her to buy her husband a roadside food stall and put her kids through school. "This was her chance and she had taken it - she had this sense of achievement and hope and she was an inspired individual in control of her own destiny," Mr Broomhead told AAP. I was just really inspired by the whole concept and more importantly, what it was doing for peoples' lives, for people that had no hope and were living on less than $2 a day. Opportunity started more than 30 years ago when founder, entrepreneur David Bussau, gave $50 to a struggling Indonesian farmer who used the money to buy a sewing machine and start a tailoring business. He now runs an import/export business and owns a fleet of taxis. Since then, Opportunity has helped millions of people and is just one of thousands of microfinance organisations, including the Grameen Bank in Bangladesh, founded by Nobel Peace Prize winner Muhammad Yunus. Mr Broomhead said Opportunity loans have a 97 per cent repayment rate, better than repayment rates at Australian banks, which allows the money to continue working by being lent to someone else. He said the model could be applied to socio-economic problems in Australia where enormous amounts of money had been shown to have little impact. "In a lot of welfare situations we see people in desperate need and so we give them money and that becomes a dependency so rather than helping people, it actually in the end becomes a hostile dependency and it destroys self esteem," he said. What Opportunity does is it actually says `no, we're going to give you a hand up rather than a hand out'.