Susan message
about
micro-credit
Micro-credit is an organisation that
loans money.
It is a system of loaning small amounts of money to
people who are members of a group
and live in a developing country.
The reason it is a small amount of money is
because it is often only a small amount of money
that stands
between absolute poverty and the ability to make a decent living.
The term “small amount of money” is, of course,
relative to the country of origin.
What is considered a small amount of money in one
country is, in reality,
quite a large amount to those living in developing
countries
who are either existing in poverty or
are on the threshold of poverty.
Uses and Rules
These loans can be
used to purchase raw materials
or livestock needed to provide work for the individual
or for work for their family.
They pay the loan off
when they can.
However, they are part of a loan group.
They know that as soon as they pay off their loan back
to the bank,
then and only then, can another person in their group
take out a loan
to help them and their family.
So the group is bound together. They form a unit.
They as individuals, know that when they pay their
loan back
then another person in their group has the opportunity
to make a better life.
This gives them a sense of responsibility to pay back
the loan
so that other members of their group, clan, relatives
or community
can have the
same chance that they have.
Everyone in that group wants the first person to
succeed
and therefore there is a lot of good energy
to help the individuals in the group succeed.
Nobel Peace Prize
This year the concept of Micro-Credit got a boost of
positive feedback.
The originator of this idea was awarded the Nobel
Prize for Peace.
His name is Mr. Muhammad Yunus and his idea or bank is
called Grameen Bank.
Mr. Yunus is 65 and lives in Bangladesh
which is a very poor country of about 141 million
people.
Bangladesh is located northeast of India.
The name Grameen means rural in the local Bengali
language.
So the English
translation is Rural Bank.
Humble Beginnings
The bank idea got its start in 1974 when Mr. Yunus
encountered a shy woman
who was making bamboo stools on the street.
She was a 21-year-old mother of three and
she only earned two cents on every stool that she made
because she had to borrow about nine cents from a
middleman for each stool.
Mr. Yunus , an economic professor,
set out with his students to survey all of the
poor villagers
and found out that they owed a total of about $27.
He put up the $27 and told them that they could pay
him back when they could.
And pay him back they did, one day at a time.
In about a year his money was paid back and
his idea flourished into a solid business in 1983.
Repayment is High
The loans are available to everyone and the average
loan is about $200 US or €180.
They are often used by women to buy livestock
such as cows or
chickens or even a badly needed mobile phone.
People who want to borrow money are put in small
groups.
Two members of this group can borrow money first and
after they have
paid back their loans the other members can borrow as well.
The repayment rate is a high 99%.
That is very good considering their plight if they had
not been financially helped.
The loans have helped six million of his compatriots.
To find out more about Prof. Yunus and the Grameen
Bank
see this website: http://www.grameen-info.org/
Other Initiatives
Other initiatives include the Community Micro Credit
Cooperative (KSU) of Bali
This concept has spread all over the world and
has since help
about 1.7 million people to have better lives.
Please check out the following website for further
information.
The Micro-credit Summit http://www.microcreditsummit.org/
On November 12, 2006, 2,000 delegates from 100
countries or more
will come together in Halifax, Nova Scotia in Canada
for the Global Micro-credit Summit.
Their goal is to reach 100 million of the poorest
families in the world.
They also have two more goals.
These are:
1. Working to ensure that
175 million of the world’s poorest families,
especially the women
of those families, are receiving credit for self-employment and other financial
and business services by the end of
2015.
(With an average of
five in a family this would affect 875 million family members. )
2
Working to ensure that 100 million of the world’s poorest families
move from below US$1
a day adjusted for purchasing power parity
(PPP) to above US $1 a day adjusted for PPP,
by the end of 2015. (With an average
of five per family this would mean that 500 million
people would have risen above $1 a day
nearly completing the Millennium Development
Goal on halving absolute poverty.)
You are welcome to join them at the Summit in their strife
to reduce world poverty.
The
Global Development Research Center
http://www.gdrc.org/icm/icm-internet.html
ACCION
International was founded in 1961 to address the desperate poverty in Latin
America's
cities. http://www.accion.org/
And there are many many more to be found on the
internet, some of them on this site:
http://www.enterweb.org/microcre.htm
We wish them all well, continued success
and prosperity for their borrowers!
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Updated July 20, 2011
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Copyright©2002-2011 by Susan and Robert