micro credit

The recent (2006) announcement that the Nobel Peace prize has been won by Dr. Muhammad Yunus has caught my attention. Part of the prize is shared by a banking system called Grameen bank. The bank is supposedly working on the principles of community effort, mutual trust, accountability, and micro credit. It is designed to offer small loans to poor people in groups of 5, who are otherwise not credit worthy. The primary requirement for loan eligibility seems to be collective accountability of groups to repay. Because there is no requirement to back their loans with collateral, the poor have been able to invest in some trade for their livelihood. The conditions for loan have helped improve social and economic awareness. This system appears to have uplifted and improved the lives of many poor communities in Bangladesh, among whom a big percentage is said to be women. This indeed is a system of community, networking and collective effort that has not only made a success story but also has received a distinguished recognition. Follow the links for more of this story. …read more