Credit is tightening up, it will be harder for people to get loans in the aftermath of the credit crisis. But this could be devastating for microcredit in the developing world. Microcredit gives small loans to small business and farmers, a large portion were women. The movement helped to pave a way out of poverty for thousands, especially in Asia.Now with less money being lent out, it will be harder for microcredit lenders to find money to lend. In this Reuters article that we found in the International Herald tribune, reporter Rina Chandran has some quotes from people who are worried. "A liquidity crisis is the very worst-case scenario for microfinance institutions," said Roy Jacobowitz, managing director of development and communications at ACCION International in Boston, which backs...
A microcredit agency in Canada just received a new infusion of cash. The Ottawa Community Loan Fund received a $100,000 grant from Citizenship and Immigration Canada. With that news worthy event, the Ottawa Citizen did a story that filled in the background on microcredit and how it works in Canada. The leader of the fund George Brown, says the numbers of people asking for loans have greatly increased in recent months. "Microfinancing and microcredit is huge in other countries and is a very key part of the economic infrastructure in a lot of developing nations and a lot of developed nations," says Stephen Daze, executive director of OCRI (Ottawa Centre for Research and Innovation)'s Entrepreneurship Centre."It's relatively new here in Ottawa and Canada, (but) it's absolutely necessary...
Microcredit has come up smelling like a rose in this credit crisis. A big contrast: small loans to people with little collateral or assets, but they get payd back 98% of the time. Meanwhile, home loans gave people a lot of money upfront, then many were unable to pay of the loan after then blew the money on other stuff (maybe other bills).Yes, we need to have more microcredit in this world. A commentary written by Misty Novitch was published in the Atlanta Journal Constitution. It shows the successes of microcredit, and also encourages participating in a letter drive to tell the World Bank to do more with microcredit. That part of the commentary is what we will focus on for our clip.Although microcredit ranks as one of the leading foreign aid success stories, the World Bank — whose...
Now here is a great idea! Clubs devoted to Microcredit are springing up on college campuses. And what better place to have such a club than in a higher learning institution, much better than a rugby club if you ask me. All kidding aside, the newspaper for Northwestern University profiled the campus Microfinance club. Emily Wray detailed the club's goals.Traveling to rural areas of Africa and India. Starting banks in small villages. Finding ways to fund local education and health care.These are just a few of the goals of Northwestern's Microfinance Club.Microfinance provides small loans for low-income people in underdeveloped countries so that they can work their way out of poverty, said Jesse Wiener, a member of the club's executive board.The Microfinance Club hopes to increase student...
from the Langley Times Bigger is better. At least, that’s the mentality of those in the developed world. But in developing countries, small starts are helping poor entrepreneurs to expand their enterprises.Most people in Canada have never heard of microcredit loans, but there are an estimated 150 million microcredit borrowers worldwide in many different developing countries. At its core, microcredit is simply the lending of small amounts of money to the poor at reasonable interest rates. As trivial as the concept may seem, it is anything but.My current assignment here in Kabala, a small town in northern Sierra Leone, is to work alongside local staff to develop a microcredit program as part of CAUSE Canada’s business development training.The training is for women who currently have a...
from Cafe Babel By Vincent LebrouWhen people see ‘micro’ they think ‘small’. That was what Muhammad Yunus thought, an economy professor in Bangladesh during the famine of 1974 and 1975. The academic quickly realised that if peasants had access to just one dollar, they could have met with their economic difficulties. But no bank would want to lend this ‘micro’ amount without a financial guarantee from the borrower. So Yunus became the guarantor. He became the ‘banker to the poor’.Opportunity to combat miseryThe debts were repaid from the very first year and the idea spread to various Bangladeshi districts. In 1983, the Grameen Bank was created, materialising this system of solidarity. Twenty-five years later, the bank has a presence in more than half of the villages in...
from the New Nation Md. Mahbubur Rahman BulbulHuge number of MFIs are operating micro finance program in Bangladesh and World-wide with their good activities. Their prime focus is, to positive change of poor and help-less people in Bangladesh by their financial assistance and to make a poverty-free Bangladesh. ASA is one of them. ASA is the biggest MFI in the world. ASA is working their responsible job by the micro finance program with land-less poor people for their positive change in Bangladesh from 1992, as usual. AS a result in that time, ASA already has achieved a great success in MFI sector of Bangladesh, even all over the world. Now the total number of ASA's borrowers is 90 lacks. It is high performance in Bangladesh. Not only micro credit, ASA is doing their job for the...
from the Star Tribune This article profiles the microcredit program called "Project for Pride", and it's founder Joe Selvaggio. $1,000 dollars can go a long way, even further in these times. - KaleBy LIBBY NELSONSince 2005, the former Catholic priest and prolific philanthropist has given away more than half a million dollars -- $1,000 at a time -- to what he calls "poor people with potential."The funds from MicroGrants have bought used cars, laptops and business attire. They've helped restore good credit. They've started a cleaning business that employs immigrant women, a dance studio and a yoga studio. As worries grow about debt and credit in the United States, they also provide a debt-free way for low-income people to catch up and entrepreneurs to get started.Angie Sandifer, who became...
from the International Herald Tribune The Grameen Bank is owned by the people who borrow from it. At a Microcredit summit, 11 groups have agreed to report their annual interest rates. A move that may help to keep with sectors charitable roots. - Kale "If you are making profits you are moving into the same mental mind-set as loan sharks," Nobel Peace Prize winner Muhammad Yunus said by phone from Bali, Indonesia, where he is attending the 11th annual Microcredit Summit Campaign conference, which opened Monday.When Yunus began making US$27 loans to women in Bangladesh three decades ago, he hoped to rescue the poor from usury. The new language of microfinance, which turns on words like "return on equity," today weighs heavily on his mind.He believes interest rates should be set to cover...
from the Financial Times Muhammad Yunus warns of a crisis as big as the subprime credit crunch. He says that overseas investors should stop flooding money into microfinance. - kaleBy Tom Burgis in Johannesburg“If you build it up that there’s a lot of money to make you can get a subprime kind of thing, but this time it’s the really poor people who will be in trouble,” Mr Yunus said in answer to a question from the Financial Times while speaking to reporters from a microfinance summit in Indonesia.The gathering of microfinanciers announced a voluntary transparency drive under which willing institutions will submit details of the interest rates they charge on their loans. Mr Yunus’s Grameen Bank is the biggest of several lenders serving a total of 20m clients to commit to the...
from the Electric New Paper Singapore This article explores if microcredit could work in Singapore. A conference is happening there now to introduce the country to the idea. - KaleIT has scored some stunning successes in developing countries such as Bangladesh, China and Indonesia. Microcredit, which gives small loans to the poor, has helped them and the illiterate escape the poverty cycle. It gives them much-needed access to credit to set up their own businesses.The Asia-Pacific Regional Microcredit Summit ends today.Can microcredit work in first-world Singapore?How microcredit worksMICROCREDIT, also called poverty lending, provides small loans to the very poor.These loans can start from as little as US$20 ($27) to US$100 for first-time borrowers, and are usually used to start small...
from the New Straits Online A Malaysian bank will help African nations in setting up microcredit schemes. The announcement was made at a conference for Asia and African countries. - KaleBANK Negara Malaysia will assist interested African countries to come up with microcredit schemes under the Financial Inclusion Advisers (FIA) programme.Deputy Prime Minister Datuk Seri Najib Razak said BANK Negara would look for the best possible scheme for each of the nations interested."They will not necessarily follow the same scheme. Each scheme will be planned according to the respective country's needs and will be a long-term programme," he said.Najib was speaking last night after the first day of dialogue proper at the Global Southern Africa International Dialogue (GSAID) at the Mulungushi...
from the Vancouver Sun Don Cayo is a columnist in Vancouver who writes on poverty related issues. Here is a excerpt on the interest charges on micro credit loans. This is related to the story about Muhammad Yunus saying there is no place for profits in microcredit - Kaleby Don CayoAnnual interest of 25, 50 or maybe 100-plus per cent: What's fair? Where, exactly, should the line be drawn between loan-sharks and worthy micro-credit programs? Between enterprises that exploit poor people who can't get conventional loans and those that help them?There's no short answer.Rates that sound to Westerners like gouging -- 25, 35 or even 45 per cent a year -- may, in fact, be the least a responsible lender can charge and stay afloat. Factor in the inflation that plagues many developing economies,...
from All Africa Leaders of the Integrated Microfinance Bank Limited reached a milestone and took the occasion to promote their company. - Kale The management of Integrated Microfinance Bank Limited (IMFB), last week announced that it has grown its customer base to over 102,000 just as it restates commitment to poverty alleviation in the country.Mrs Titilayo Osinubi, head, legal counsel, IMFB, who disclosed this development noted that the bank is committed to poverty alleviation in the country through economic empowerment of the masses by ensuring easy and accessible banking transaction for the poor. The bank does this through its concept of 'banking at your doorstep', capacity building for the people and adequate financial, technical and moral support for the community.The bank, which...
from the International Herald Tribune A debate has begun in microcredit circles about how much should the lender profit. Muhammad Yunus gives his side in this story. - KaleWhen Nobel Peace Prize winner Muhammad Yunus began making US$27 loans to women in Bangladesh three decades ago, he wasn't thinking of initial public offerings and return on equity.Now that the field of microfinance is become increasingly commercialized, though, such terms weigh heavily on his mind."Poor people should not be considered an opportunity to make yourself rich," Yunus said by phone from Bali, Indonesia, where he is attending a meeting on microcredit that opened Monday.This week at the Microcredit Summit Campaign conference, privatization advocates will be pitted against those who believe you can save the...
from Banking Wire This explores the new concept thatMuhammad Ynuns has for giving cell phones to the poor. - Kaleby Karen Krebsbach,Cellphone banking is emerging as an important link that could bring the most basic financial services to the globes billions of unbanked cellphone users. Bringing the unbanked into the formal economy is a key initiative of various playerspayments processors, financial-services firms, telecommunications firmsbut it, like the developing countries most affected, is a work in progress.The obligation for financial institutions is to serve as the foundation on which such socio-economic progress can rest.In battling poverty in the developing world with affordable financial services, there is nothing quite as democratizing as the ubiquitous cellphone. Few proponents...
This is part of a Voice of America series on entrepreneurs throught the world. This part of the series profiles how micro credit helps. - Kale By Barry WoodThe Grameen Bank in Bangladesh is a ground breaker. It lends almost exclusively to women. And its small business loans are almost always paid back. Nobel Prize-winning StandardMuhammad Yunus is the bank's founder and a hero in his country. Grameen was the first to lend on a grand scale to poor, aspiring entrepreneurs in the developing world. The venture into microcredit won Yunus and his bank the Nobel Peace Prize in 2006. "It's fantastic news. We are all very excited about the good news. It excites everybody in Bangladesh and also the people who are involved in micro-credit around the world," Yunus said.Melissa Carrier, at the...
from the Daily Star, Bangladesh CA hopes Nobel Committee to raise the issue in world forumsUnb, DhakaChief Adviser (CA) Fakhruddin Ahmed yesterday said poverty alleviation is a must for lasting peace and sustainable development, but climate change is a major factor in Bangladesh that casts adverse impacts on poverty.The head of the caretaker government made the remark when visiting Chairman of the Norwegian Nobel Committee Ole Danbolt Mjos made a courtesy call on him at his office in the afternoon.The CA said developing countries, particularly Bangladesh, are least responsible for climate change but worst sufferers from adversities stemming from climate change. He mentioned the back- to-back floods and cyclone 'Sidr' that wrought havoc on the country last year.He cited a prediction...
from Eurasia Erica Marat: 7/08/08Though much maligned of late for backsliding on democratization, Kyrgyzstan has developed into an economic innovator in Central Asia. The country is presently a leader in extending microcredits to would-be entrepreneurs.With about 40 percent of Kyrgyzstan’s roughly 5 million people living either under or near the poverty line, the country is considered a prime area for microcredits, in which loans of usually no more than several hundred dollars are extended to small groups, many of which seek to launch small businesses.International financial organizations and non-profit groups, such as USAID, the European Bank for Reconstruction and Development and MercyCorps, instituted microcredit lending practices in Kyrgyzstan in the mid-1990s, shortly after it...
from Network World By Kanika Goswami Kanakapura is a township of about 50,000 on the fringes of Bangalore. It's known more for the road that leads to it: Kanakapura Road, on which an Art of Living Center is located.But it's also the hometown of Razya. For three years, the 28-year-old could not find work in the small town and her husband barely made ends meet with his job in the sericulture business.That all changed when Grameen Koota, a microfinance institution, lent her enough money to start a scrap business. In its first year, the business earned the family a profit and Razya was able to send her kids to school and purchase some furniture.Razya is one of many. Although most others are not as fortunate. It sounds unbelievable but Bangalore, arguably the world's IT capital, is the 13th...
from The Daily Star, Bangladesh Adviser Rasheda K Chowdhury and Prof Muzaffer Ahmad were scathing about the country's non-government organisations' (NGOs) activities yesterday while urging them to become transparent, accountable and well governed.Primary and Mass Education, Women and Children, and Cultural Affairs Adviser Rasheda K Chowdhury, and Transparency International Bangladesh (TIB) Chairman Prof Muzaffer Ahmad were addressing a convention of NGOs titled 'Institutional Good Governance of NGOs'.The convention was organised by Sushasoner Jonny Procharavizan (SUPRO -- Campaign for Good Governance) and was held in the LGED auditorium in the capital. Representatives from about 400 NGOs across the country attended the convention.The convention adopted a 10-point 'accountability charter'...
from the Chicago Tribune Fulbright Scholar turned beer vendor takes personal approach to foreign aidBy Ted GregoryHis fellow beer vendors sometimes tease Adam Carter for wearing knee and back braces and an ergonomically designed strap to schlep the Old Style and Budweiser he hawks at Wrigley and U.S. Cellular Fields.They call him the most accessorized beer vendor, and they notice he is less likely to join them for late-night carousing than he used to be.But those who know Carter well know his mettle. A Fulbright Scholar with degrees in cultural anthropology and international development, Carter, 33, works as a vendor half the year.The other half he is an international microphilanthropist trying to save forgotten, impoverished nooks of the world one modest donation at a time.Carter of...
from the Toronto Star Marc and Craig KielburgerWalking through the slums of Mumbai is never easy. Rows on rows of corrugated tin shacks line the narrow streets, most of them rusted and seemingly on the verge of collapse.Outside, upwards of a million other people too poor even for a shack live on the street among piles of garbage. There are so many of them that the sidewalks are nearly impassable.They exist in the shadows of the Mumbai's apartment buildings, some glitzy enough to rival the famous addresses of Manhattan both in luxury and price. Others are more run-of-the-mill but still cost thousands of dollars a month just to rent.Such is life in India's financial capital, where skyrocketing real estate prices have created two worlds in this city of 14 million people. Space now goes for...
from the Inquirer Rita FestinPhilippine Daily InquirerTOBOSO, Negros Occidental--"Isn't this the worst road that you have ever traveled on?" Mayor Evelio Valencia told officials of the Asian Development Bank (ADB) and the Japanese embassy when they arrived in far-flung Sitio Vergara in Bug-ang, his town's most neglected barangay (village) because of its inaccessibility.The isolation of the barangay is understandable. No well-meaning vehicle owner would want to subject his vehicle to the kind of roads that Toboso is known for, made worse by the regular afternoon downpours. Its rocky terrain and clay-like soil will either pierce or sink tires easily. Six inches of grass grows in the middle of the road for pedestrians to step on to avoid mud and puddles. It takes half a day for farmers to...
from the Jamaica GleanerFounder of Grameen Bank and Nobel laureate, Prof Muhammad Yunus of Bangladesh, was in Jamaica as a guest of Scotia Group Jamaica to deliver the fifth Annual Scotiabank Lecture. Chairman and managing director of the The Gleaner Company, Oliver Clarke, interviewed the 2006 Nobel peace prize winner on Wednesday.Q: What do you define as micro lending, and how extensive is it now?Micro lending is lending money to the poor, particularly women, without collateral, guarantee, lawyers; trust-based lending for income generating activity, at reasonable interest rates.Since you started, is the concept now extensively practised throughout the world?Yes, it started 27 years ago in a small village and we lent a total of $27 to two people, and it worked. Gradually, we extended it...
from the Guardian By Peter AppsLONDON - Rapid growth in the booming microfinance sector is exposing it to greater risks, ratings agency Fitch warned on Thursday, saying this raised new management issues as access to banking for the world's poorest expands.The microfinance sector had a total asset size of more than $34 billion at the end of 2006, Fitch said, and continued to grow fast. With the world's poorest showing good repayment rates on tiny loans, it has been seen as largely diversified from global or even national economic and market trends.It has also been much less affected by the global credit crunch, which has hit access to loans in developed economies.Rapid growth was putting pressure on internal control systems, management quality and corporate governance, Fitch said. Its...
from the Toronto Star Need can happen here, Nobel Prize-winning microcredit messiah tells business peopleJun 10, 2008 04:30 AMRita TrichurBusiness ReporterMuhammad Yunus doesn't talk like a typical banker. He believes that access to credit is a fundamental human right.Nicknamed Bangladesh's "banker to the poor" for motivating a global microfinance movement, the Nobel Prize-winning economist told a Toronto business audience yesterday the financial system shuts out nearly two-thirds of the world's population, denying the poor both opportunity and dignity.Poverty is often perceived as a dilemma of the developing world, Yunus said, but the problem is alive and well in North America."You'll be surprised how many people in Toronto do not qualify to do business with the banks," he said in a...
from ReutersBy Aasa Christine StoltzOSLO - The Norwegian government, companies and a private investor have formed a $117 million microcredit fund aiming to help people in poor countries out of poverty, although critics have said its interest rates will be too high.It will be one of the world's biggest funds in the field of microfinance which involves lending small sums of cash to poor entrepreneurs who would otherwise not have access to traditional banking or credit facilities.Privately owned financial group and initiator Ferd has joined with banking group DnB NOR, insurance company Storebrand, life insurer KLP and the government to set up the 600 million Norwegian crowns ($117.1 million) fund.The state will contribute 50 percent of the fund, and the other partners the rest, the foreign...
from Surrey NowTed ColleySurrey NowTuesday, May 20, 2008Surrey's Kamila Romanowski has made a major commitment to microcredit.On May 31, the third-year SFU student will join 26 others on a 3,000-kilometre bike ride from Vancouver to Tijuana, Mexico to raise money for micro-loans to poverty-stricken people in other lands.Thirty seconds into a phone interview, it became very evident Romanowski is at the very least, a bubbly personality. Or as she put it, "an eternal optimist.""When you look at a map, Canada is on the top and Mexico is on the bottom, so technically, it's all downhill," she said with a laugh.Romanowski said she was planning a bike trip to Mexico anyway when she came across the website of Global Agents For Change, a Vancouver-based non-profit dedicated to using microcredit to...
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