Grameen Bank Touches Ground in New York

Submitted by Francisco Noguera on March 11, 2008 - 11:49.
Published in:
March 11, 2008 - 11:00, The Washington Post
Small Loans, Significant Impact

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/09/AR2008030901617.html?sub=AR

NEW YORK -- "Señoras!" calls the banker, summoning her borrowers to attention at their first loan-repayment meeting.

The small-business borrowers -- day-care providers, clothing sellers, jewelry makers -- crowd into the living room where their children are napping, eating cereal and watching TV.

They are part of a nascent lending program created by Muhammad Yunus, a Bangladeshi economist who won the 2006 Nobel Peace Prize for developing the Grameen Bank, which uses micro-loans to help eradicate poverty in developing nations.

But these women are not in Bangladesh, they are in Queens. They are among the first 100 borrowers of Grameen America, which began disbursing loans in January. This is the first time Grameen has run its program in a developed country.

"I just want to live a little better, and one day own a little house or something," said Socorro Diaz, 54, a borrower who sells women's lingerie and jewelry. "I'm trying to change my life. Bit by bit."

Grameen America, which offers loans from $500 to $3,000, hopes to reach people like her, part of the large segment of poor Americans without access to credit, said Ritu Chattree, the vice president for finance and development.

They are bakers who can only buy enough eggs and milk for a day's work because they cannot afford a restaurant refrigerator to store ingredients. They are vendors who borrow money daily to rent a cart. They are hair salon owners who take out loans every time they need to buy shampoo.

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I only recently learned
Submitted by Christine on March 12, 2008 - 18:28.
I only recently learned about micro finance in a course I am taking, but I am becoming increasingly more interested in the topic. I could not figure out why we have not been as successful in the United States as developing countries have been with micro finance loans. The welfare argument provides a real reason for our lack of success. Not only does the financial system require adjustment, but the welfare system needs an overhaul as well. The welfare system was designed to help struggling families survive. Wouldn't micro finance be an excellent addition to the welfare program? At the very least, the government should not discourage these loans. I am very encouraged to hear that citizens in our country are benefiting from micro loans and am happy to see such a great article in the Washington Post.
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Thanks for your comment,
Submitted by Francisco Noguera on March 13, 2008 - 11:57.
Thanks for your comment, Christine. I agree with you. Micro loans would indeed be a great addition to a welfare system in the U.S., or even an alternative to such a system in countries like mine, where the Government cannot afford direct disbursements to poor citizens but can choose to encourage microfinance activity through initiatives like one in Medellin, Colombia that I recently wrote about in NB. Back to the U.S., you might be interested in checking out http://www.accionnewyork.org/. I recently visited their headquarters in Manhattan and was very impressed by the work they are doing!
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