Read an interesting post on micro loan that linked to Grameen Bank, a bank that provides tiny loans to “the poorest of the poor” in rural Bangladesh without any collateral. Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women.
“It began with a simple $27 loan. After witnessing the cycle of poverty that kept many poor women enslaved to high-interest loan sharks in Bangladesh, Dr. Muhammad Yunus lent money to 42 women so they could purchase bamboo to make and sell stools. In a short time, the women were able to repay the loans while continuing to support themselves and their families. With that initial eye-opening success, the seeds of the Grameen Bank, and the concept of microcredit, were planted.”
The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. Banker to the Poor: Micro-Lending and the Battle Against World Poverty
is an inspiring memoir of the birth of microcredit, written in a conversational tone that makes it both moving and enjoyable to read.
Living in a world where the poor has no means to borrow money other than from the loan sharks, what strikes me most is that the loan recovery rate is 98.40%, with zero collateral !!! I guess these economically poor people has better integrity than many of those who caused the sub-prime woes.