My Thoughts on Micro-Credit

“Have you looked into micro-credit?” is the question I get asked most frequently. I actually got to meet Professor Yunus – a Bangladeshi and Nobel Peace Prize winner for his work in micro-credit. Micro-credits are basically small loans to those poor who wish to use that small loan for entrepreneurial purposes with the goal of pulling themselves out of poverty. Grameen Bank (founded by Professor Yunus) has had incredible results and amazing success stories. The reason I have somewhat shyed away from focusing on micro-credit in my work here in Bangladesh is because I believe there is an overemphasis on micro-credit back in the developed world. Micro-credit is part of the solution to ending poverty. It is not the solution to ending poverty in and of itself.

In terms of borrowing money, the poor in the developing world are very much like people in the developed world: what makes sense for us also make sense for them. It makes perfect sense, for example, to take a loan so you can attend a college. But does it make sense for you (or your parents) to take a loan so you can go to grade school? It also makes perfect sense to take a loan to buy a car. If you took a loan to buy a car, for example, you could start a delivery/transport business. But, would it make sense to constantly have to take subsequent loans because your car keeps breaking down because of the lack of proper roads? It’s also understandable that people sometimes need to to take loans to pay for medical expenses. But imagine if you could avoid getting sick in the first place simply by having a community with basic sanitation and the simplest of protection against diseases.

There is nothing wrong with micro-credit. It’s the developed world’s attitude toward micro-credit which is the problem. Aid and micro-credit isn’t an either/or proposition. They can work together. Many of the Millennium Development Goals advocated by Dr. Sachs and the United Nations are really a good basic support. Completing the MDGs will put people in a position of 1) being able to take full advantage of any micro-credit loans they ask for as well 2) helping people avoid unnecessary loans. Why take a loan for malaria treatments in a hospital when you can avoid getting infected by sleeping in an insecticide treated mosquito net? Imagine how far someone can go with a micro-credit loan if they have had the opportunity to gain even the basic of literacy skills to tap their full potential and ingenuity.

If there was a one sure fire solution to ending extreme global poverty – we’d already have this problem solved. Reaching a real solution means having to break our romantic belief that there is a holy grail to ending poverty.

10 Responses to “My Thoughts on Micro-Credit”


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  3. 3 kadijah photiades

    I have learned rescently of a problem with micro credit..especially when it comes to women in business.
    I was supporting an organisation who provided micro credit education etc. to women.
    I found out later that for instance one woman in Sri Lanka left her home to work in a micro credit programme and her sister in law threw acid in her face for not mourning her husband properly by leaving the home and going to work.
    I also heard of another woman who could not pay back her micro credit because basically many many of these woman are NOT going to leave their homes and go to work because it goes aganst their culture.. So they get stuck with a loan they have to pay back ..and as I said one women was selling her body to pay back that loan, because she felt she had to.
    There is a woman who I met who has a programme called work for widows in Sri lanka which allows women to work FROM HOME and care for their children..through beading and sewing and not disrespect their culture but still provide income.
    This canadian woman believes that we are not going to change this generation of women but that we can affect the next generation. Let this generation stay home as culturally expected…work from home…and raise their children.. educate the children and perhaps make some change in the next generation…
    and realise that giving women micro credit…could put them in a precarious situation where they may have to do things compromising to pay back that loan!!!! Its all an education. we mean to help but we cause such harm
    thanks for the dialogue

  4. 4 kadijah photiades

    I have learned rescently of a problem with micro credit..especially when it comes to women in business.
    I was supporting an organisation who provided micro credit education etc. to women.
    I found out later that for instance one woman in Sri Lanka left her home to work in a micro credit programme and her sister in law threw acid in her face for not mourning her husband properly by leaving the home and going to work.
    I also heard of another woman who could not pay back her micro credit because basically many many of these woman are NOT going to leave their homes and go to work because it goes aganst their culture.. So they get stuck with a loan they have to pay back ..and as I said one women was selling her body to pay back that loan, because she felt she had to.
    There is a woman who I met who has a programme called work for widows in Sri lanka which allows women to work FROM HOME and care for their children..through beading and sewing and not disrespect their culture but still provide income.
    This canadian woman believes that we are not going to change this generation of women but that we can affect the next generation. Let this generation stay home as culturally expected…work from home…and raise their children.. educate the children and perhaps make some change in the next generation…
    and realise that giving women micro credit…could put them in a precarious situation where they may have to do things compromising to pay back that loan!!!! Its all an education. we mean to help but we cause such harm
    thanks for the dialogue

  5. 5 kadijah photiades

    I have learned rescently of a problem with micro credit..especially when it comes to women in business.
    I was supporting an organisation who provided micro credit education etc. to women.
    I found out later that for instance one woman in Sri Lanka left her home to work in a micro credit programme and her sister in law threw acid in her face for not mourning her husband properly by leaving the home and going to work.
    I also heard of another woman who could not pay back her micro credit because basically many many of these woman are NOT going to leave their homes and go to work because it goes aganst their culture.. So they get stuck with a loan they have to pay back ..and as I said one women was selling her body to pay back that loan, because she felt she had to.
    There is a woman who I met who has a programme called work for widows in Sri lanka which allows women to work FROM HOME and care for their children..through beading and sewing and not disrespect their culture but still provide income.
    This canadian woman believes that we are not going to change this generation of women but that we can affect the next generation. Let this generation stay home as culturally expected…work from home…and raise their children.. educate the children and perhaps make some change in the next generation…
    and realise that giving women micro credit…could put them in a precarious situation where they may have to do things compromising to pay back that loan!!!! Its all an education. we mean to help but we cause such harm
    thanks for the dialogue

  6. 6 Amanda

    You have some interesting theories. The eradication of poverty is not an easy task by any means. As the previous comment states, it means that many would have to change their cultures completely, and this will not happen from one day to the next. The western work revels in a life of leasure and electronic toys, whilst others suffer in unimaginable poverty and despare.

  7. 7 Amanda

    You have some interesting theories. The eradication of poverty is not an easy task by any means. As the previous comment states, it means that many would have to change their cultures completely, and this will not happen from one day to the next. The western work revels in a life of leasure and electronic toys, whilst others suffer in unimaginable poverty and despare.

  8. 8 Amanda

    You have some interesting theories. The eradication of poverty is not an easy task by any means. As the previous comment states, it means that many would have to change their cultures completely, and this will not happen from one day to the next. The western work revels in a life of leasure and electronic toys, whilst others suffer in unimaginable poverty and despare.

  9. 9 refinancing fee

    You have some great articles here. Thanks for all the work posting them. I’ll be back for sure!

  10. 10 refinancing fee

    You have some great articles here. Thanks for all the work posting them. I’ll be back for sure!

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