Microcredit catching on, says ‘banker to poor’
Maria Chimuil Xicajau of Guatamala got her first loan of $183 from Grameen Guatemala to help with her production of beaded belts. After taking her first loan, Maria increased her profit margin by 33% with the reduced costs for purchasing beads in bulk. "With the additional income, I will invest in education for my children," she said. (Photo: Whole Planet Foundation)
Microcredit – loans to the poor made without collateral – is catching on in Latin America with the help of the Whole Planet Foundation, according to Nobel-prize winner Muhammad Yunus.
Muhammad Yunus: We have 7.5 million borrowers, 97 percent of them are women.
Known as the ‘banker to the poor,’ Yunus popularized the idea of microcredit in his native Bangladesh.
Muhammad Yunus: They take tiny loans and generate income-generating activities, then they pay back the loan, people get out of poverty, and the poor people own the bank. They send their children to school. And the children receive education loans so that they can continue in higher education. And thousands and thousands of young people are now in higher education out of illiterate families because a bank came and supported them.
Yunus helped organize a team of experts from Bangladesh to establish microcredit in Latin America.
Muhammad Yunus: The Whole Planet Foundation is supporting Grameen Trust to start microcredit program in Guatemala. And a beautiful program is running there. In Costa Rica, now in Assam. Now we are talking about doing it in China. They didn’t have to. The market doesn’t expect you to do that. But this is beyond the textbook.
Yunus spoke of the need to ‘step outside the textbook.’
Muhammad Yunus: They needed to step outside the textbook to bring out their own feelings, their own urges. Now we are saying, why don’t we put that in a theoretical framework? We should be feeling proud of what we are doing. We shouldn’t be feeling shy, that oh, we are not going according to the book. The book is wrong. We are not wrong. Human beings cannot be wrong. The book didn’t depict us right. So, we need to do that. That’s what the social business idea is all about.
This work has supported almost 15,000 microentrepreneurs in Latin America alone. For more on the Whole Planet Foundation, click here.
Muhammad Yunus on a 21st century business model
Listen to the 6-minute Clear Voices for Science podcast
Nobel Peace Prize winner Muhammad Yunus
Listen to the 18-minute Clear Voices for Science podcast
For a combination of distributed social investing and microcredit see www.kiva.org.
It is great what Whole Foods and the Whole Planet Foundation are doing, giving a help up not hand out! I have lived overseas, and have seen microcredits in action, really working.
The ideas of wealth distribution, according to the precepts of Mr. Muhammad Yunus, are truly appealing. Perhaps, more bankers will follow this great man’s example.
As things now stand most money managers are focused, not on wealth distribution, but upon wealth accumulation and consolidation for themselves and their minions. These economic powerbrokers appear value to little else than hoarding wealth. Have their occupational intentions reached the point of idolatry?
Has the political ideology of economic globalization poisoned the minds of the family of humanity in the way CO2 emissions have polluted Earth’s atmosphere? If so, could these ideological and physical pollutants become dangers to human and environmental health?
Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
It will be interesting to see how microcredits and more thoughtful lending will change international development. I applaud Grameen Bank and the Whole Planet Foundation for working to empower people, specifically women in their support of microcredits. Microcredit lending has been revolutionary for gender equality. In so many cases it gives women and families a way to secure basics needs and services like food, health care, and education which before may have been unattainable.
This progranm is especially important in Latin America where the lending industry is not as developed and open as in the U.S., even beyond low income families. It will greatly benefit the people of these countries by encouraging them to think that there is hope of becoming more successful in their trades, something that was not available at all to people of low income as is shown in the article.
Mr. Yunus is changing the way we address poverty in a creative way that should be duplicated in all countries, including the US.
It really is a wonderful thing, the way Grameen and the Whole Planet Foundation/Whole Foods are working to give opportunities to the less fortunate, who otherwise would not get the funding money to use or would get it and be taken advantage of with a high interest rate and end up in debt. If only I could get the same kind of loan to pay off my college tuition!
For a moment, let’s compare and contrast the work in behalf of the poor of Mr. Yunus and the Grameen Bank with the work of the bankers in the USA mortgage industry who are responsible for engineering the current sub-prime mess at the expense of the poor.
< http://break.com/index/how-we-got-into-the-subprime-mess. … >
It is kind of hard to wrap your mind around the idea of banking as making such a positive difference in society. Then again, as Yunus said, what Grameen and the Whole Planet Foundation are doing is “beyond the textbook” of common economic practice. It’s amazing what creativity can do when leveraged with vision.
No kidding, for one thing Mr. Yunus has ideals, morals and ethics whereas the mortgage bankers in question only have an “I got mine” mentality” and allegiance to the [not-so-mighty] dollar.
No kidding, for one thing Mr. Yunus has ideals, morals and ethics whereas the mortgage bankers in question only have an “I got mine” mentality” and allegiance to the [not-so-mighty] dollar.
Last year the investment banking industry awarded its top “producers” 33 billion dollars in year-end bonuses. In 2006 Goldman Sachs alone awarded its top bankers 16 billion dollars in bonuses.
What do you think Bear Stearns has been offing as bonuses to its most ‘successful’ bankers while the “sub prime bubble” they helped create has been inflating in a patently unsustainable way?
As we having been observing in recent months, another huge “bubble” has been “manufactured” by economic powerbrokers and allowed to grow ominously within the world economy. Not unexpectedly, the sub prime “bubble” is doing now what bubbles eventually do. Bubbles burst. We can readily observe how the credit markets of the world banking system are seizing up, stocks are tumbling and the value of the dollar is sinking. Who knows, a financial meltdown of the economic system worldwide could be in the offing.
For a moment, let us consider that the organizers, managers and Wall Street whiz kids overseeing the global economy (and the unraveling of the worldwide sub prime mortgage swindle) are running the artificially designed economy of the human community as a pyramid scheme. This is to say straightforwardly that the international financial system is being operated so that most of the wealth rises pyramidally into the hands of a small minority of people at the top of the world economy where this wealth is accumulated and consolidated endlessly. At the same time, the vast majority of people on Earth, near the bottom of the global economic pyramid, are left with very little wealth. In the 1980s, this global financial operation was called a “trickle down” economy. We have been told over and over again how this economic scheme “raises all ships.” From my limited scope of observation, the billion people living on resources valued at less than one dollar per day and the additional 2.7 billion people being sustained on two dollars per day of resources in 2008 appear to be stuck in squalid conditions. The ‘ships’ carrying these billions of people do not appear to be lifting them out of poverty.
I’m glad financial institutions are finally catching on to the power of women.