My friend Lynn in South Africa just sent me this article from “the Globe and Mail” (I think). Very interesting development in the world of development …
For those who may be unfamiliar with Mohammed Yunus, he developed the Grameen (bank of the village) in Bangladesh in the 70’s. After obtaining his degree in Economics in a US university, he had moved back to his native Bangladesh to work with the government on billion dollar policy and five-year plans. Walking through a local village one day, he was struck by the discrepancy between his work and the realities of poverty in the community. After some investigation he realized the the grand total to relieve a couple of dozen people from an uneding cycle of poverty was about $40 … and that is when he made a chaoice that has made all of the difference. Rather than simple charity, he loaned the money out to this percieved ‘high-risk’ credit-starved group, at interest. They repaid.
Today, the bank that he began with that simple step, has billions of dollars in asset and has refused donations since the mid-90’s. Men and mostly women who take advantage of the loans have personally experienced a dramatic reduction in child mortality rates, improved housing as Grameen standard homes stand against huricanes, definite improvement due to personal economic choice and possibility. The rate of loan return is at 98.15%.
Yunus and the Grameen organization co-shared the Nobel prize a couple of years ago … evidentally they had their sights set on the poor in America as well …
here is the article …
Yunus sees big answers in microcredit
TAVIA GRANT
June 11, 2008
Muhammad Yunus, banker to the poor and winner of the 2006 Nobel Peace Prize, believes the best way to bring microfinance to the developed world lies in the heart of the banking world – New York City.
Bangladesh-based Grameen Bank opened its doors in Queens six months ago, distributing start-up business loans of $500 (U.S.) to $3,500 to women, many of them low-income Latin American immigrants. It’s early days, but repayment rates so far are 100 per cent and the number of clients has grown to 225 from 165.
The concept is simple – give those who wouldn’t otherwise have access to affordable credit a chance to start small businesses such as, in New York, child care or beauty salons. Groups of borrowers meet weekly and make regular repayments. The concept has mushroomed throughout the developing world, but is relatively untried in richer nations.
“New York is the world capital of banking, but it doesn’t do banking for its nearest neighbours – those who live under the shadow of the skyscrapers,” Mr. Yunus said in a wide-ranging interview with The Globe and Mail.
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