(This weekend I got into a conversation on Twitter with @sloane about microfinance. The Grameen Bank is a shining example of how giving women access to credit can lift families out of poverty. Here are a few photos I took when I visited the Grameen Bank in Bangladesh in 2007 . Below that is an excerpt from “Where Am I Wearing? about the experience. )
Nobel Peace Prize winner Mohammad Yunnus believes in Bangladesh, too. He formed the Grameen Bank, which gives microcredit loans to people who couldn’t get loans from a traditional bank.
I went with a representative of the Bank to see the program in action.
Thirty women sat shoulder-to-shoulder on wood benches in the bare building framed with bamboo and covered in corrugated metal sheeting. The Bank’s regional manager called out names from his ledger. One-by-one, the women approached his table at the front of the room and made their group’s loan payment.
To get a loan from the bank, a woman must find other women to form a small group. If she doesn’t pay back her loan, it hurts the chances of the other women in her group obtaining future loans. The group provides support and a sort of peer pressure to pay back the loans. If a borrower cannot pay back the loan, she reflects poorly on her group. The Bank doesn’t take their home or their livestock. There is no collateral.
Amazingly, 98 percent of the loans are paid back, and the Bank has lent to over seven million borrowers.
Lovli is only 55, but she looks 75. That’s what life as a beggar will do to you. She used her loan to buy bags of gummy candy to sell. Now she makes twice as much money as she did begging.
Shokinan bought a cow with her first loan. After she paid the loan back, she bought a home. After she paid that one back, she built rooms near her home to rent out. Now, she owns more than 60 rooms. Her first loan was for $57 and her last for $4,200. She has come a long way from owning one cow.
Shilpi works at a garment factory, earning $25 per month, but she has started her own business on the side making pants and shirts. She used her loans from the Grameen Bank to buy her sewing machine and materials. She’s 26, has two sons (nine and eleven) and only attended three years of school. When I asked her where she saw herself in 10 years, she got really excited. She smiled, pointing this way and that. I didn’t have a clue as to what she was saying, but I could tell she had big plans.
A first time loan might be only $5. That’s all it takes to empower these women to see beyond the needs of today, to imagine a better life for their children, to give them hope.