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Small loans are helping Egyptian women earn more.
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Micro-credit helps Egyptian women (source: AFP, www.aljazeera.net) | ||
Thousands of poor Egyptian women are benefiting from a partnership between the bank founded by Nobel peace prize-winning Bangladeshi banker Muhammad Yunus and a local credit company. The Grameen Bank [Village Bank], which shared the Nobel peace prize this year with Yunus, has been helping to better lives even in distant Egypt. Hanem Shaban, an Egyptian working in Cairo's popular Imbaba market explained how it made a difference to her life. "I got my first loan of 250 Egyptian pounds ($43) six years ago, and it meant I could expand my vegetable stall and earn more money." She now earns enough to be able to afford schooling for her four sons. Sixteen thousand Egyptian women are currently receiving micro-credits totaling 10 million Egyptian pounds ($1.7 million) from the 'Solidarity Programme', which was launched in 1996. Maha Antar, a spokesperson for the programme said: "All of our credit go to women, because in Egypt it is generally women who work to put bread on the table. In very poor levels of society we couldn't guarantee that this money would go to the family if it was given to the man." Empowering women The solidarity programme is small, with just 100 employees staffing six offices in Cairo's poorer neighborhoods. It provides micro-credits to groups of women who are linked by friendship or because they are relatives or neighbors and can therefore help each other. "As the women repay their loans, they become eligible for even larger micro-credits," Antar said. To apply for micro-credit, the potential borrower has to be 18 years old, and prove that she is serious about what the loan entails. Hisham al-Said, who also represents the Solidarity Programme, said: "If a woman given a micro-credit doesn't demonstrate that her project has developed, then we stop helping her." The small businesses created by the women given micro-credits range from dressmaking and embroidery to small grocery shops. The Grameen Bank, which provides loans to the poor in Bangladesh - mostly to landless rural families - has been a partner with the Egyptian organization since 2003. Last year, Grameen advanced a credit of 2.3 million pounds ($400,000) to the solidarity programme. The Egyptian organization obtains the rest of its funding from wealthy private donors, as well as from the government's social security coffers.
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DECEMBER 26, 2005
(source: BusinessWeek) 
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Economics professor Muhammad Yunus wasn't afraid to turn the rules of banking upside down
Editor's Note: Bangladesh's Muhammad Yunus and the bank he founded, Grameen Bank, which created a new category of banking by granting millions of small loans to poor people with no collateral—helping to establish the microcredit movement across the developing world—won the Nobel Peace Prize on Friday. On its Web site, the Norwegian Nobel Committee said it awarded the prize to Yunus, 65, and the bank "for their efforts to create economic and social benefit from below."
As a young economics professor at Chittagong University in Bangladesh in 1976, Muhammad Yunus lent $27 out of his own pocket to a group of poor craftsmen in the nearby town of Jobra. To boost the impact of that small sum, Yunus volunteered to serve as guarantor on a larger loan from a traditional bank, kindling the idea for a village-based enterprise called the Grameen Project. It never occurred to the professor that his gesture would inspire a whole category of lending and propel him to the top of a powerful financial institution.
Today, Yunus runs Bangladesh's Grameen Bank, a leading advocate for the world's poor that has lent more than $5.1 billion to 5.3 million people. The bank is built on Yunus' conviction that poor people can be both reliable borrowers and avid entrepreneurs. It even includes a project called Struggling Members Program that serves 55,000 beggars. Under Yunus, Grameen has spread the idea of microcredit throughout Bangladesh, Southern Asia, and the rest of the developing world.
"At first I didn't think that what I did had any significance in a broader context," he explains. But the mission keeps expanding in scale, and in the meantime, Yunus has grown intimately familiar with the unbearable dimensions of global poverty. As many as 1.2 billion people around the planet lack access to basic necessities, he explains, and microfinance could be their pathway out of despair. "Yunus and Grameen have taken a first step, which has inspired others to take a look at [microfinance] as a business," says John Tucker, deputy director of the microfinance unit at the U.N. Capital Development Fund.
Yunus' innovation has broad appeal. In 1997 only about 7.6 million families had been served by microcredit worldwide, according to the 2005 State of the Microcredit Summit Campaign Report. As of Dec. 31, 2004, some 3,200 microcredit institutions reported reaching more than 92 million clients, according to the report. Almost 73% of them were living in dire poverty at the time of their first loan.
When Yunus started Grameen, he wanted to turn traditional banking on its head. One of his first moves was to focus on women because they are most likely to think of the family's needs. This was a radical step in a traditional Muslim society, and it took Yunus six years to reach his initial goal of a 50-50 gender distribution among borrowers. Today, 96% of Grameen's borrowers are women. "If banks made large loans, he made small loans. If banks required paperwork, his loans were for the illiterate. Whatever banks did, he did the opposite," marvels Sam Daley-Harris, director of the Microcredit Summit Campaign. "He's a genius."
Micro- Lending (Wikipedia)
Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor.
Microcredit is a financial innovation which originated in Bangladesh where it has successfully enabled extremely impoverished people to engage in self-employmentpoverty. projects that allow them to generate an income and, in many cases, begin to build wealth and exit
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