Nearly three decades after the pioneering Grameen Bank began giving small loans to poor people, microcredit is being hailed for helping some 5 million Bangla-deshis, although critics say it fails to tackle the root causes of poverty.
"We took our first loan to buy 20 hens and ducks and if it wasn't for that we we would be beggars now," Roushanara, 30, said this week.
PHOTO: AFP
Roushanara, who uses one name, used to be a manual laborer. She and her mother were left penniless after her father died, the family having earlier lost their home to river erosion.
"My mother and I used to earn 30 taka (US$0.50) a day digging earth. Our life was very difficult. We were vagabonds but now we have land, a home and we earn around at least 6,000 taka (US$100 dollars) a month."
Roushanara is among the many success stories of the Grameen Bank, which began life in 1976 as a pilot project run by Muhammad Yunus, a professor of rural economics at Chittagong University in southeastern Bangladesh.
The project set out to prove that lending to the poor was not an "impossible proposition."
By giving small loans to landless rural people, it aimed to break the exploitation of the poor by money lenders.
Borrowers used the loans to buy their own tools and equipment, cutting out the middlemen and transforming their lives through self-employment.
However, though the Grameen model has been replicated in more than 40 countries, some experts have criticized it for failing to help those who most need it by giving credit to the poor but excluding the poorest.
Critics have also said microcredit fails to tackle the root causes of poverty and traps people into petty trading in an overcrowded market.
Roushanara, however, has no doubts. After making a success selling hens and ducks, she took another loan to rent a piece of land to harvest rice crops.
She took a third loan to buy an engine which she used to power a tractor during the dry season and a boat during the rainy season.
"Later we bought another engine and rented it out to people," she said.
"We started to earn more money. Now we have bought two pieces of land for cultivating rice and another one for our house. I am happy now. Before I commanded no respect, now I have social identity," she said.
Women in particular were targeted for microcredit after Grameen found them to be astute entrepreneurs.
Grameen's loans are repaid over a year with an interest of 16 percent. Loans are typically given to help borrowers pursue activities such as raising goats or chickens, weaving, pottery or mat-making. Others use the loan to buy a rickshaw or piece of machinery. The purchase of mobile phones through microcredit has given rise to the now ubiquitous Bangladeshi "village phone lady" who makes a living renting it out call by call.
"Without loans I would still be a tea boy because I had no way to change my life on my own," said Dilip Kumar Devnat, 32.
"I was so poor. I could only afford to eat once a day and even the money lenders would not lend to me," he said.
But after taking a loan to set up his own tea stall, he took out another to buy a refrigerator and stock cold drinks.
Gradually, the stall became a success. He took a third loan for a mobile phone and is now planning to take a fourth to set up a stationery shop.
Twenty-eight years after the project started, more than 800 non-governmental organizations and four banks and financial institutions operate microcredit schemes in Bangladesh. Some 5 million people are estimated to have taken loans. Grameen alone has given such loans to more than 2.3 million people in 39,000 villages. Repayment rates have varied from 88 percent to 99 percent.
Last year, Grameen took on some of its critics by offering interest-free loans to roadside beggars, allowing them to buy items such as sweets, pickles or toys to sell at a profit.
Shops give them credit with Grameen as guarantor. More than 25,000 people are expected to take part in the scheme by the end of this year.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
UNWAVERING: Paraguay remains steadfast in its support of Taiwan, but is facing growing pressure at home and abroad to switch recognition to Beijing, Pena said Paraguayan President Santiago Pena has pledged to continue enhancing cooperation with Taiwan, as he and Japanese Prime Minister Fumio Kishida expressed opposition to any unilateral change to the “status quo” in the Taiwan Strait using force, Japanese media reported on Saturday. Kishida yesterday completed a trip to France, Brazil and Paraguay, his first visit to South America since taking office in 2021. After the Japanese leader and Pena spoke for more than an hour on Friday, exchanging views on the situation in East Asia in the face of China’s increasing military pressure on Taiwan, they affirmed that “unilateral attempts to change the