Jam4000000amSun, 15 Apr 2007 08:27:26 +000007 21, 2007

“One day, our grandchildren will go to museums to see what poverty was like.”

Posted in Uncategorized at 3:15 p04 by minhdee87

Lining Up the Loan Angels

The above quote is by Muhammad Yunus, the 2006 Nobel Peace Prize recipient. As mentioned in my previous posts, Yunus developed the concept of microfinance, and through his work, some 500 million poor people have benefited from his loans. As a result, the United Nations declared 2005 the year of microcredit.

That was two years ago. Recently, critics of microfinance have stressed that providing money to the poor alone is not enough. “Critics on the left charge that micro-finance privatizes social safety networks, while conservatives dismiss it as charity disguised as enterprise.” This article doesn’t give detailed numbers of its assertions. Some argue that this lending simply places people in a cycle of never-ending debt. While some people will attempt to take advantage of their loans, others will carelessly squander the money away. Who is to control and regulate what people do with the money they get from the microcredit?

Apparently, microfinance has worked to some extraordinary extent, and numerous people have in fact prospered from it. To say that it is an “enterprise” is ridiculous. Case studies in Bangladesh have shown significant improvements in the lives of the people. Like anything else in life, there are many factors that come into play. It will take longer for some in certain areas than others to progress, but the evidence is there. The article goes on to say that only 300 of 25,000 people have reached sustainability. Is it not better than at least 300 people are now better off as a result of microfinance than their previous poverty stricken situations?

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