Another short read from moi!

http://www.undp-povertycentre.org/pub/IPCOnePager59.pdf

A really great read re the evolution of micro-credit is the very astute Muhammad Yunus’s ‘Creating a world without poverty’.

Hs first encounter:

‘It was a village woman named Sufiya Begum who taught me the nature of this problem……. To provide food for her family, Sufiya worked all day making bamboo stools, yet somehow her hard work was unable to lift her family out of poverty.
Through conversations with Sufiya, I learned why. Like many others in the village, Sufiya relied on the local moneylender for the cash she needed to buy the bamboo for her stools. But the money-lender would give her the money only if she agreed to sell him all she produced at a price he would decide. Between this unfair arrangement and the high interest rate on her loan, she was left with only two pennies a day as her income.
Once a woman like Sufiya borrowed any amount, no matter how small, it was virtually impossible to work her way out of poverty.

The motivation behind the Grameen Bank:

‘In the past, financial institutions always asked themselves, “Are the poor credit-worthy?” and always answered no……….. I reversed the question: “Are the banks people-worthy?” When I discovered they were not, I realized it was time to create a new type of bank.’

And now:

‘Today, it gives loans to over 7 million poor people in 78,000 villages in Bangladesh.’

Some gender psychology:

‘Observing the actual behaviour of the people we lent money to, we soon found that giving credit to poor women brings more benefits to a family than giving it to men. When men make money, they tend to spend it on themselves, but when women make money, they bring benefits to the whole family, particularly the children.’

The impoverished:

‘Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on. All that is required to get poor people out of poverty is for us to create an enabling environment for them. Once the poor are allowed to unleash their energy and creativity, poverty will disappear very quickly.’

And the children:

‘If poverty is to be reduced or eliminated, the next generation must be our focus. We must prepare them to peel off all the signs and stigmas of poverty, and instill in them a sense of human dignity and hope for the future.’


The man's a legend...

People in Bangladesh, and a number of health professionals, have very obvious reservations about the effectiveness and in fact the motivation behind Grameen Bank.
It is true that the Bank has given loans out to countless poor people to 'help them' - but there have been no study or reports on what these people use the loan for; if it is in fact helping them or putting them in a worse-off situation.
Grameen Bank have also stated that the return rate of loans are over 90%.
BUT I've come to know that they have their 'methods' of extracting that money back. They assign agents to set areas or Bangladesh who make regular contacts with these people to 'ask' them to return the money. And this happens a few months/weeks before they are due to make repayment and continues on untill they have fully repaid the money.

Now I don't know if Mohammed Yunus set up this process (but regardless it still would have to be approved by him) but that is how Grameen Bank operates.

Until there is a study or a report on the positive outcome of these people AFTER they had borrowed and utilised the money, I can't say that that Bank is doing anything aside from running a business as opposed to helping the poor.