Microfinance saves many poor people from money lender
Thursday, 7 October 2010
Shapan Kumar Roy
Hakkar Ali of Baithair village in Katiadi Thana under Kishoregonj once had vast property and a nice house. He did not work and used to lead lavish life by selling his property. He borrowed a huge amount of loan from village money lender at the high interest rate. He had to sell all his property even the house to repay the loan. After losing everything he became day labourer and his wife turned maid servant. They took shelter in one of her relative houses. Luckily, one day his wife Amena enrolled into an MFI and got a small loan. By this loan Hakkar Ali bought a bicycle and some paddy. His wife Amena involved herself in rice husking and Hakkar Ali started selling rice in the market. Now, he is better off and has bought a piece of land for building his own house. This is one example of microfinance beneficiary in Bangladesh. There are many examples like Hakkar Ali all over the country who are trying to change their life with the help of microfinance.
Microfinance has been introduced for using it as a poverty alleviation tool and from its initial stage it has been using to meet this purpose. Microfinance is actually playing a vital role in the society. It has saved lot of poor people from the hand of money lenders and helped them change their life style.
Now-a-days, many question the effectiveness of microfinance in reducing poverty in Bangladesh. But it is proven that in Bangladesh at first microfinance brings the poor people under banking facilities. In Bangladesh, there is no scope for the poor people to have an access to formal banking because they don't have any money to open a savings account, they don't have any collateral to secure a loan, they don't have a credit record as they have never been formally employed and they've never taken a loan before, they might even be unable to complete the necessary paperwork as they are illiterate. In this stage microfinance has started it journey in Bangladesh for providing financial services to the people those who live under poverty line. Formal financial institutions are not designed to help those who don't already have financial assets.
Microfinance has been playing an important role to reduce poverty in Bangladesh as well as other developing country in the world. Considering the importance of microfinance in reducing poverty the United Nations has announced that Microfinance is a weapon to fight poverty and hunger.
On the other hand, microfinance is playing an important role in woman empowerment. Now, in poor families women have got the right to participate in decision making.
For better understanding the importance of microfinance in Bangladesh we can cite the following statement of Banker to the Poor and Nobel Laureate Muhammad Yunus : "Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen's experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives."
The writer can be reached at Email- shapan_r@yahoo.com
Hakkar Ali of Baithair village in Katiadi Thana under Kishoregonj once had vast property and a nice house. He did not work and used to lead lavish life by selling his property. He borrowed a huge amount of loan from village money lender at the high interest rate. He had to sell all his property even the house to repay the loan. After losing everything he became day labourer and his wife turned maid servant. They took shelter in one of her relative houses. Luckily, one day his wife Amena enrolled into an MFI and got a small loan. By this loan Hakkar Ali bought a bicycle and some paddy. His wife Amena involved herself in rice husking and Hakkar Ali started selling rice in the market. Now, he is better off and has bought a piece of land for building his own house. This is one example of microfinance beneficiary in Bangladesh. There are many examples like Hakkar Ali all over the country who are trying to change their life with the help of microfinance.
Microfinance has been introduced for using it as a poverty alleviation tool and from its initial stage it has been using to meet this purpose. Microfinance is actually playing a vital role in the society. It has saved lot of poor people from the hand of money lenders and helped them change their life style.
Now-a-days, many question the effectiveness of microfinance in reducing poverty in Bangladesh. But it is proven that in Bangladesh at first microfinance brings the poor people under banking facilities. In Bangladesh, there is no scope for the poor people to have an access to formal banking because they don't have any money to open a savings account, they don't have any collateral to secure a loan, they don't have a credit record as they have never been formally employed and they've never taken a loan before, they might even be unable to complete the necessary paperwork as they are illiterate. In this stage microfinance has started it journey in Bangladesh for providing financial services to the people those who live under poverty line. Formal financial institutions are not designed to help those who don't already have financial assets.
Microfinance has been playing an important role to reduce poverty in Bangladesh as well as other developing country in the world. Considering the importance of microfinance in reducing poverty the United Nations has announced that Microfinance is a weapon to fight poverty and hunger.
On the other hand, microfinance is playing an important role in woman empowerment. Now, in poor families women have got the right to participate in decision making.
For better understanding the importance of microfinance in Bangladesh we can cite the following statement of Banker to the Poor and Nobel Laureate Muhammad Yunus : "Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen's experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives."
The writer can be reached at Email- shapan_r@yahoo.com