Poor can still bank on micro-credit

Microfinance is an industry that has fallen on hard times itself, since the controversial sacking of the Grameen Bank founder, Muhammad Yunus. However, microfinance has proven to be a powerful tool to help the world's poorest people to lift themselves out of poverty, and improve their entire family's nutrition, education and housing.

The State of the Microcredit Summit Campaign 2011 report indicates that 128 million of the world's poorest families had current loans at the end of 2009, demonstrating good progress towards reaching 175 million of the poorest families by 2015. This target is still very much achievable if micro-credit is properly managed, and not hijacked by the likes of loan sharks and profiteers.

Below Maree Nutt advocates for a more sensible and reasonable approach in utilising microfinance as a proven tool in the fight against poverty: 

But Maree Nutt, the Australian national manager of the anti-poverty group Results, said micro-credit, carefully managed, benefited families, particularly as almost all borrowers are women.

''It's been proven more effective when that money goes to women, because women spend it more directly on benefiting the family, on what the family eat, on whether the kids go to school.'' 

Results has called for AusAid to more than double its micro-credit aid to $45 million a year by 2013.

('Poor can no longer bank on micro-credit',  The Sydney Morning Herald, Ben Doherty, 9/4/2011) 

Read some of the letters by some of our RESULTS members, backing microfinance, that have recently been published in the newspapers HERE.

Microcredit at the Crossroads

Noble Peace Prize laureate Muhammad Yunus, the grandfather of microcredit, has had his appeal, over his controversial sacking from the Grameen Bank, dismissed by Bangladesh's Supreme Court on Tuesday.

The man who pioneered microcredit in Third World countries with tiny loans to poor Bangladeshi villagers says the industry has lost its way. 

Forced to step down from the grassroots bank he founded nearly three decades ago, Muhammad Yunus says the industry has been corrupted by racketeers.

''Unfortunately, not everyone who uses the word 'microcredit' is dedicated to serving the needs of the poor,'' the Nobel Peace Laureate said after his dismissal.

These are just some of the headlines that have appeared in today's newspapers across Australia:

Court ruling ends microcredit pioneer's career

Microcredit has lost its way, says creator

RESULTS needs you to send a letter-to-the-editor of either newspaper (or your local newspaper) commenting on the situation.

You can send your letters to either letters@smh.com.au OR letters@theage.com.au 

You can also use our most recent Fact & Action Sheet - Maintaining Growth in Microfinance and Ensuring Benefits for the Poor - to call for a greater role for aid programs in the light of the controversy surrounding the commercialisation of microcredit.

WRITE TODAY!

Also watch out for another article in Saturday's newspapers: "Microcredit at the Crossroads"

To catch up on the situation as it as been happening read our other blog Microfinance Under Fire