Grameen Bank, the microcredit financier that was initially set up to help the poorest in Bangladesh, has recently opened its first branch in the United States.
Nobel Prize Laureate and Grameen Bank founder, Muhammad Yunus, originally introduced microcredit financing in 1976. He made his very first loan of 27 dollars from his own pocket, to 42 craftsmen in a village in Bangladesh, saying they could pay it back when they could afford to. Usually, the poor are unable to obtain credit but when they can, they are then charged exorbitant rates of interest. Grameen charges borrowers about 15 per cent a year and requires no collateral. It does not make its recipients sign a legally enforceable contract but rather models its business on trust.
Now, Grameen Bank plans to hand out loans to the less well-off in one of the most ethnically diverse neighbourhoods in America. The new branch has opened in Queens, New York and aims to cater to the thousands of non-native residents without access to banking services. Over the next five years, it will be offering 176 million dollars in loans, before expanding its services to other parts of the country. The fact that this microcredit system is now operating in the world’s richest of countries, is highly significant because it exposes the extreme inequality between America’s rich and poor.
As thousands struggle with the ‘credit crunch’, microcredit may become a solid workable solution where more traditional models have failed. With a proven track record, Grameen’s pioneering microlending concept offers new hope and a way forward for America’s underprivileged.
Nobel Peace Prize Laureate Muhammad Yunus, founder of Grameen Bank
Photo: courtesy of Muhammad Yunus
Originally posted at Positive News.org
by Charty Durrant