Grameen bank, public financial institutions, believe women
The world turned to microcredit as a poverty reduction efforts since Muhammad Yunus, founder of Grameen Bank, received the nobel peace prize in 2006. programs of financial institutions that channel in bangladesh microcredit is considered successful, after the bank’s internal survey stated that about 68% of creditors have crossed the poverty line.
Grameen Bank’s credit pattern is very different from the principles of commercial banks, there is no requirement of collateral or legal instrument signature, because banks do not want to debtors was brought to court in case of default.
The Grameen Bank requires prospective borrowers in a group, consisting of 5 people. first time credit is given to two members of the poorest in the group. if installment smoothly, in two weeks and then the next two receive credit. if it still continues smoothly, ten weeks later the head of the group a loan.
payment responsibility remains on the individual borrower. Other members watch for every member to pay serious trouble and no payment. if there are not able to pay, the other members is not obligated to pay off debts her friend.
This system proved to work well. repayment rate of 97.93%. factors that women considered “key” family empowerment seems to take decisive. because credit Grameen Bank is more directed to women who reach 97% of the total borrowers.
however, the pattern of micro credit by financial institutions can not be separated from the criticism that the high interest rates. These high interest rates caused by policies other than withdrawal of credit without collateral and bank operational costs.
although considered effective to alleviate poverty. financial institutions are still considered failing to overcome the causes of poverty. but financial institutions are trying to self-sufficient community by selling its shares as it did in mexico (mexico banco compartamos) actually led to protests, because it is considered, commercialize public financial institutions. considering profit community financial institutions from interest rate close to 100% a year
