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Loans For The Poor

Poverty is found in every country around the world. Some are the so-called working poor, those with jobs but struggling to make ends meet. The working poor rarely get out of poverty. Others are homeless, forced to beg on the streets for food. Children are often the ones who suffer most. Poor nutrition and lack of education only perpetuate this cycle of poverty. Many of us feel there is nothing to be done to alleviate this suffering and bring an end to poverty.

One man began with a novel idea about thirty years ago. That man, Muhammad Yunus, an economist from Bangladesh established the Grameen Bank in Bangladesh with the intent to issue small loans for poor people with no collateral. Mr. Yunus's premise was that in the burgeoning globalization policies, the gap between the rich and the poor exacerbates the plight of the poor, promoting conflict across the globe.

One of his initial efforts involved issuing $27 loans for poor people, women in particular, who were to use the money to purchase straw to make and sell stools.

The project was an exhilarating success, with these women being lifted out of poverty affording their families a better life and more nutritious food.

Out of this pilot project, Mr. Yunus expanded his programs, flying in the face of conventional bank loan policies. Conventional banks never made loans for poor people because they had no property to seize in the case of default. Mr. Yunus courageously crossed the line of cultural taboos in extending his loans for poor people to women, previously not allowed to have money or work for profit outside their homes.

Just a few years ago, the Grameen Bank launched one of their most innovative and controversial programs, issuing loans for poor people who previously had no way out of poverty. These were the poorest members of society – street beggars. The beggars were given loans of just $9, to purchase small items like candy, bread and toys to resell in gainful self-employment.

Today, the Grameen Bank supports almost seven million of these loans for poor people, and boasts over 2,000 branches in locations in the most dire need. The Grameen Bank has lent almost $6 billion dollars over the past thirty years, reporting an overall repayment rate of 98%.

Mr. Yunus and the Grameen Bank were awarded the Nobel Peace Prize for 2006 in recognition of his decades of work resulting in significant social changes for impoverished people around the world.

This revolutionary economist plans to use his share of the prize to form a company to make nutritious and inexpensive food for the poor and to build an eye hospital for the poor in Bangladesh.

Mr.Yunus hopes that other banks will embrace this micro-credit concept, encouraging peace through the empowerment of the poor. So next time you think of a problem that seems insurmountable, remember the difference this one man has made in the lives of millions of impoverished people.

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