Banker to the Poor: Micro-Lending and the Battle against World Poverty: Advantages of Microcredit

The main features of the Grameen project are the availability to the poor people who have no credit history and are not able to borrow a loan from a bank because of the lack of stable job to give the loan back. In this respect, the Professor Muhammad Yunus who was concerned about the poverty level in Bangladesh invented a strategy and labeled it a ‘microloan’ which enabled the poor population of rural areas to borrow loans and pay them back in a period of time agreed upon by the parties.

Women were not willing to join the project at the beginning of its implementation because they were threatened by religious and political leaders of their villages that the Grameen Bank workers would convert them into Christians or give into prostitution. However, the idea of involving women into this project was beneficial as they were considered the most right-lacking category of population.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

They could not find jobs or have certain financial opportunities; so, arranged marriage was the only way out of poverty, if any. Besides, women could persuade inhabitants of villages to take loans because of their soothing features.

Pramila Rani Ghosh was one of the female members of the Grameen project and was able to operate her own grocery store and have a cow to receive milk. However, different events in her life such as enteritis and operation, unknown disease that killed her cow, flood of 1988 that destroyed her crops and her house, a fire that burnt her house, food, crops, and everything she had. Nevertheless, this woman found strength to take another loan and pay it back as well as all successive loans she pays back with the help of her sons.

The advantage of the Grameen project is that it is based on the workforce of the native population and their education, training, and development. The concept of microcredit can be adapted in any country with different economies.

However, it is easier to introduce the project when employees are aware of the situation with the poverty and are willing to solve the problem. The disadvantage of this project is that it is based on hardworking features of the employees and does not presuppose adequate wages for bank employees who spend a lot of time for training others and education the population concerning financial issues.

The advantage of the IMF’s project is that it offers adequate wages to employees and is targeted at educated/trained population that knows about benefits and drawbacks of loans. However, this project also rejects explaining the population benefits of the loans which may cause the situation when people take loans without being aware of the percentage to pay off and other tricky issues.

In order to relieve the poverty in developing countries with emerging economies, it is preferable to use the Grameen project because it enables the bank workers to give microcredit to people without extensive credit history and stable job to encourage them to start their self-employment. The IMF’s project would better work for the developed countries with another way of labeling wages.

Yunus was against the World Bank as it did not understand the approach applied to Bangladesh, he insisted that the World Bank applied the microcredit on a completely different basis than it was beneficial for the rural population of Bangladesh to relieve the poverty (143).

Moreover, the way the microcredit system worked in the IMF’s vision was inappropriate for Yunus, and he claimed that employees of the World Bank were trying to choose the projects that could bring the bank more money which accelerated their chances for promotion (145); the banking system was not used for relieving the poverty but for moving forward up the promotional ladder.

Works Cited

Yunus, Muhammad. Banker to the Poor: Micro-Lending and the Battle against World Poverty. PublicAffairs, 2003.


I'm Morris!

Would you like to get a custom essay? How about receiving a customized one?

Check it out