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Showing posts with the label micro-banking

Is Lending the Solution?

The Grameen Scotland Foundation will oversee the running of a microfinance-style lending in Scotland. Tesco Bank will provide £500,000 of the loan capital for what will be Grameen’s first venture in the UK. The Scottish Government have donated £100,000, and supporters such as businesswoman Ann Gloag, who has also given £100,000. The original Grameen bank, founded more than 20 years ago in Bangladesh to offer small loans to those excluded by the traditional banking system. The borrowers are almost exclusively women. They are required to organise themselves into groups of five, which creates a support system for repaying the loan. The average loan is around £1,000 and repayment rates are high, often close to 100%. Grameen now has around 8 million borrowers and has issued more than £3.5bn in small loans in the past two decades. Grameen Glasgow will be based in a community-run centre in the Sighthill area of the city, where more than 59% of children live in workless households with up to …

We don't micro-credit it

Glasgow and surrounding parts of western Scotland have some of the worst pockets of poverty in Britain. Life expectancy is below the national average and some families have been on welfare for three or four generations.

Mohamed Yunus, the Nobel Peace Prize winning economist, hopes to raise £1m ($1.56m) in coming months to open the first European branch of his Grameen Bank in Glasgow by the end of the summer. Under its business plan for Glasgow, which will be overseen by experienced managers from Bangladesh, Grameen expects to raise £3m over three years and lend an average of £1,000 to 1,500 borrowers at an interest rate of 19.8% a year.

Rushanara Ali, the Labour Party’s spokeswoman for international development, welcomed the symbolism of experts coming from a developing country to share their knowledge “If they’ve got solutions that work somewhere else, it doesn’t do us any harm to look at how we adapt them,”

Unfortunately Yunis mico-credit schemes are NOT the panacea for poverty. Thoma…