Ali Hamid Khan
Providing credit and organizational support for the poor have been key elements of many NGOís approach to poverty reduction and improving livelihood. It is an accepted fact that resource-poor rural households need affordable credit to enhance household incomes. It is essential to incorporate the poor who constitute more than 60 percent of the population in the national drive to eradicate poverty, which is solely responsible for the slow development of the populationís potential, and efficacy.
Micro Credit Program
The Grameen Bank has developed a successful model of extending credit to poor households and has mostly the female members. The model is now being replicated in a large number of countries all over the world. The fundamental features of the model are: firstly, an organizational structure than ensures that clients belong to the economically and socially disadvantaged groups; secondly, a credit delivery system that is simple and adaptable to cater to the needs of the poor; thirdly, a built-in savings mobilization component that enhances self-reliance and provides cover against business risks and vulnerability from natural calamities; and a self-empowerment mechanism that provides women an opportunity to assert themselves in the household and the society.
The experience of the micro credit programs in
Some borrowers turn into successful entrepreneurs generating employment for other poor people.
The NGOs operating the micro-credit program have also generated substantial employment for the educated workforce for servicing the program, which is a tremendous benefit for countries like
The micro credit program in
The Grameen Foundation uses micro finance and innovative technology to fight poverty and bring opportunities to the worldís poorest people. With tiny loans and financial services, the poor, mostly women, start businesses and escape poverty.
Ninety percent of micro-credit borrowers are women. Micro-credit borrowers have used the funds to start small grocery shops, set up trading activities, rear cattle and poultry, farm fish and start up businesses such as tailoring, rickshaw pulling and paddy husking, among other activities. Micro-credit has significantly helped improve their lives.
Limelight of Micro Credit
Recently micro credit has come into the limelight with Prof Muhammad Yunus receiving a Nobel Peace Prize. The concept of micro credit to the poor without any collateral is avant-garde and with this the banking sector has received a big jolt revolutionizing the concept of banking. The idea is to provide loans to the poorest of the poor who have no collateral and therefore no access to loan facilities.
This is an effort to bring them out of their abject poverty and help them to lead a normal life and to better the living conditions of the family by providing nutrition, education and developing their skills and potentialities to lead a developed life. Now it has been accepted that economic emancipation and peace are interlinked.
To bring the majority of the people mired in abject poverty out of their deprivation and help them lead a developed and healthy life by being a partner in national development activities is the underlying idea of this method. Poverty leads to social malaise and malediction jeopardizing peace and stability whereby the economy in general suffers and the country plunges into disorder leading to deterioration of the overall conditions of the people. So, it is imperative to address this issue and there can be nothing better than reaching out to the people through micro credit and giving them access to knowledge and information to improve their conditions. Knowledge conflated with finance and information is the key to development. If we jettison this idea we are inviting more discontent and restiveness, which can lead to failure and uncertainty. Grameen Bank has today more than 6,500,000 subscribers who play a pivotal role in the mobility of finance and the movement of markets contributing to the growth in the socio-economic conditions and the improvement of family life. This will impact education positively and raise awareness regarding trade and other important dynamics, which are the integral parts of a developed society.
There are different NGOs working on this line. By providing financial support, they are not only improving their economic conditions but also contributing to bolstering their confidence, developing their personalities and changing their psyche and mindsets. These are no mean achievements.
In our country, the role of NGOs has been laudable and ground breaking.
They have helped the women to break out of their socio-cultural backwardness and male dominance to assert themselves and play a positive role in different strata of society.
They have succeeded in coming out of their narrow mindsets, confinements and walk shoulder to shoulder with the male members empowered by information, knowledge and finance provided by different organizations.
It has been seen that the borrowers make timely and fantastic repayments which amount to 97 percent that has belied the banking guideline that only people with collateral can be trusted and given loans.
They have proved to be better and more trustworthy with the loans.
The country is striving hard to eradicate hunger and chronic food insecurity, bringing down by half the number of people below the poverty line.
They are attaining primary education for all boys and girls and eliminating gender disparity in enrolment; reducing by 65 percent infant and under-five mortality rates; reducing malnourished children under five by 50 percent; reducing maternal mortality by 75 percent; ensuring reproductive health services to all; reducing social violence, especially against women and children and ensuring comprehensive risk management and environmental sustainability.
The country has good performance in the area of sustained economic growth, reduction of income poverty, maintaining and increasing food security, enhanced disaster management capacity, admirable achievement in human development and promotion of key social sector and health outcomes.
The World Bank is satisfied with the progress and called it silent revolution.