The Grameen Example

Daily News, Colombo
http://www.dailynews.lk
February 11, 2004

Editorial

Give a man a fish and you feed him for a day, but by teaching him to fish you feed him for life. This is the basic philosophy that drives Bangladesh's Grameen Bank, an unprecedented success story copied by more than 100 countries including Sri Lanka.

Grameen, which means 'village' in Bengali, was founded by economist Muhammad Yunus in 1976. It has given more than US$ 4 billion in small loans to poor Bangladeshis, imparting a whole new meaning to the word microfinance.

Despite the obvious success of microlending, most commercial banks are still mired in the deep-seated belief that the poor have a poor track record of becoming self-reliant. They should study microfinancing more closely - more than 50 million households around the world are tapping microloans and the target of 100 million by next year looks within reach. Grameen alone disburses US$ 30 million a month to 3.13 million borrowers in 44,000 villages. Unlike their rich counterparts who receive multi-million dollar loans, micro borrowers pay back on time - Grameen recovers more than 98 per cent of its loans even though recipients do not have to put up collateral.

The truth, as exemplified by Grameen and similar institutions, is that microloans are a path to self-reliance and self-respect. In other words, economic and social empowerment. As Yunus says, if poor people are given the same access to credit as the rich, they will thrive. Poverty alleviation programmes conducted in Sri Lanka too have proved this point.

Microloans are a boon for women, who have demonstrated their innate ability to rise from the ashes of poverty to the splendours of prosperity. Women are the breadwinners in an increasing number of families worldwide and their economic empowerment is vital for overall development of any country. Women usually manage the loans wisely only for the intended purpose and turn their ventures into successes envied by men.

The lesson from Grameen is clear: Leave it to the people. They are capable of standing on their own feet. We should not treat abject poverty as an unfathomable abyss from which there is no escape. With the correct guidance and monetary help, the poor can do wonders.

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