Saturday, March 28, 2009

Microfinance, micro-credit and micro-entrepreneurs

Right to credit should be a fundamental right, says Nobel Peace Prize Winner, the founder of Grameen, Prof. Muhammad Yunus.

Poverty, a major barrier to the growth of the world, is no longer a problem without a solution. Poverty doesn't belong here anymore. The puzzle is over. All the pieces fit.

Every human has an instinct to survive, be one poor or rich. No human is born with money. But money is essential to survive on this planet. To attain this basic essential, to enable one's survival, every human should have access to credit which would provide an equal platform for the test of survival. This credit, to serve its very purpose of being a tool for income generation, shouldn't be a part of any charity as charity is quite contrary to what the concept of credit is meant for. Credit shows a path towards empowerment unlike charity which is but a temporary solution or no solution at all. When credit is made available to all, no one needs to teach anyone how to survive nor help anyone survive.

In this context, today, we have examples of this successful credit phenomenon in the poorest localities of the world where growth would've seemed impossible a few decades back if not for some brains who understood how credit could be used to deal with poverty. We have Grameen (Bangladesh) and its replications across the world, Casas Bahia (Brazil), Cemex (Mexico) and many more.

Micro-finance refers to the wide range of financial services provided to the low-income(or no income or inconsistent income) groups on social collateral, through which the risk of the finance extended to these low-income groups is transferred from the financier to a group of people, bound together by mutual trust and need, who then work for themselves. Micro-credit is one such service under micro-finance, which enables loans to the poor in order to help them help themselves through self-employment. This has led to the conversion of the so called poor helpless people into a force of micro-entrepreneurs who can now fend for themselves.

If democracy is the end product of the evolution of ideologies for the states, if that's what we are talking about, then the evolution of the ways in which it needs to be implemented leads us to a path called empowerment of individuals. And credit is an essential tool to empower those who have no money. It is no charity.

The credit offered is not lost on anyone. It is converted into a force of growth and employment with returns. Micro-finance has been adopted in many places across the world today and is seen as a profitable business.

For further details, refer to
-> Banker to the Poor, an Autobiography of Prof. Muhammad Yunus
-> Fortune at the Bottom of the Pyramid by Dr. C.K. Prahlad


Or just ask me :)


  1. first time to ur blog...ur pics are so marvelous...they rock and ur writing is also good..keep it up ..


  2. hey what you've written is right.. helps a lot of the masses, and gives them a feeling of independence and dignity. but dont you think its better for the persons growth if he sees the hardships does smalltime jobs and then comes to the stage of having his own business? the sweat i feel is important to relish the fan.. anyways i am not much aware of this scheme.. just heard of it last year when this man got the nobel.. will check in detail..