Microcredit reassessed
Increased cost of providing loans
The Independent – September 11, 2009
Professor Yunus received the Nobel Prize for his microcredit venture. Recently he has received the highest
The rate of interest charged by the Grameen Bank and others is in the vicinity of 28 per cent, already too high, compared to much lower rates charged by normal banks. As most home-based enterprises have folded within a year, the premise on which microcredit is based, has become suspect. The general inability of the average poor woman to expand her business and create jobs has turned out to be the biggest impediment to success because her lack of knowledge of market requirements kept her firmly bound to a limited number of unsophisticated buyers.
Loans could not serve intended purpose
Therefore if the Grameen Bank and others of its kind are to operate, they must change tactics. Many of the small loans disbursed among poor women could not serve the intended purpose because of non-cooperation by husbands. When men became the de facto clientele of the Grameen Bank and other such organisations, it was at the expense of the women who continued to carry the burden of debt. Fortunately this became known to the dispensers of microcredit and today, no loan is given unless underwritten by the husband.
http://www.theindependent-bd.com/details.php?nid=141690
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