The Grameen Project is a plan to empower people by loaning them small amounts of money so they can start their own business. The plan works in exactly the opposite way from traditional banks. Yunus explains that loan repayment is much easier for borrowers in small amounts. Instead of requiring a repayment of the full loan at a certain date in the future, the Grameen plan requires weekly repayments for one year. In order to encourage women to get involved and stay involved women who have similar goals form groups to give each other support. The groups are self-managed teams with a “peer pressure” dynamic to succeed; when everyone in the group succeeds the group succeeds (62). There are cultural problems starting a group in Bangladesh because many women are afraid or not willing to take over the man’s role of taking care of the family money.
Mufia was a beggar before she was able to start her own business with a Grameen loan. She was married when she was thirteen years old. She lived with her husband’s family because that is the custom in Bangladesh. Her mother-in-law and husband beat her and did not let her eat enough to stay healthy. She was starving all the time from malnutrition and she had anemia. Finally she was able to get a divorce but then spent fifteen years, most of them begging. For short periods she was given personal loans from a basket maker. With the loans Mufia would buy bamboo at wholesale prices and then sell it to make a little profit. With the help of the Grameen loans she was able to start selling bamboo. Then after repaying the first loan she was confident enough to take larger loans. This way she and her children were able to eat regularly, buy clothes and some cooking utensils. (Yunus & Jolis, 2003, 67-68)
The International Monetary Fund gives loans from the ‘top down’ so it is the opposite of the Grameen Project. A ‘top down’ loan is made to a country or an organization but most of the financial aid is spent to on the employees of the organization. Yunus points out research that concluded that reducing poverty is not the priority for IMF type organizations. In fact, the small percentage of aid that reaches a target country does not reach the poverty stricken people.
The micro-credit loans are good idea for both the developing and the developed world because there are very poor, starving, homeless people in both types of countries. The Sixteen Decisions are designed for the Bangladeshi culture but each country could make their own list of commitments for borrowers. In the US it would help a lot of homeless people get back to work because most of them have a trade and/or work experience. Zoning laws would have to change so vegetable gardens could be grown in yards. Also people would need to be given land taken over by corporations in order to grow crops during the year. Classes in business management are not what the poor in the US need either.
The strategy IMF uses to solve problems is to study the problem by sending experts; which can use up all the money without any aid going to the people who really need help. The micro-credit strategy is a direct method of lifting individuals out of poverty. Yunus does not support the rise of the “consultancy business” (144). Financial aid used for general purposes can build infrastructure that only helps people who already have money. Yunus also pointed out that the priority of IMF is not to help poor people but instead to raise the gross national product (GNP). He argues that living in poverty is a human rights issue not an economic issue.
Works Cited
Yunus, Muhammad and Jolis, A. “A Pilot Project is born” Chapter 5, Banker to the Poor: Micro-Lending and the Battle against World Poverty. New York: Public Affairs, 2003. Print pp. 59-84.
Yunus, Muhammad and Jolis, A. "Growth and Challenges for the Bank for the Poor, 1984-1990” Chapter 8, Banker to the Poor: Micro-Lending and the Battle against World Poverty. New York: Public Affairs, 2003. Print pp. 131-152.
