Microfinance and its possible contribution to the developing communities
Our today’s market is more industrialized, globalized and communicated than it was ever in the past. It has been easier to travel, trade and create opportunities. Globally, hundreds of thousands of new businesses are established. Corporations are using new techniques to advertise their product. The system that we are living today has created lots of opportunities for people to grow, but it has also created a hindrance for people from less affluent communities to succeed because communities that have opportunities and means to grab those opportunities are moving too fast. Likewise, corporations also target their products to those people who have means to buy their products and banks give loans to those people who have means to pay back. In this race, people from less affluent communities are left behind just because they are perceived by the world that they don’t have much to contribute to this industrialized world other than poverty and unemployment.
Banks don’t go to the remote villages because they don’t see profit in those areas. The Grameen Bank initiated by the Nobel Peace prize winner Muhammad Yunus was one of the first few groups who targeted their products to remote villages in developing countries. The Grameen Bank gave microloans to people who couldn’t get loans before and in doing so it opened up a new world to these villagers who had no concept of banking and savings. Even though loans provided by the Grameen Bank were minimal according to the Wester standard, they were a huge bust in family income in the low-income family. Getting a loan meant being able to buy a cow (these villages are mostly agricultural) so that the family could sell milk and make earnings. Getting a loan also meant being able to find a job and preventing that family from being homeless. And in some families, it meant being able to send their children to school and pay for stationery.
The Grameen Bank is criticized for being another establishment adding to the globalization. It’s there to make a profit and it doesn’t care about uplifting people from poverty instead it pushes people to a deeper level because there is a higher probability that these people won’t be able to pay their loan back. I don’t disagree that the Grameen Bank had added to the globalization. But is there a way for us to keep ourselves away from globalization? I don’t think so. Everything we have today is directly or indirectly part of this system. I also agree that the Grameen Bank is for profit but I don’t agree that it has pushed people to the deeper poverty level. In remote villages of Bangladesh, India, and Nepal, people don’t know about banking because they have never seen one. Despite being for profit, the Grameen Banks have given opportunities for these villagers to start over again. It has given them a hope. It has reached in the corners and the nooks of society forgotten by the majority of well-off people.