Small Loans, Significant Impact
The Washington Post — www.washingtonpost.com
Published on March 11, 2008
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.
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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Comments
Christine
Mar 12, 2008
I only recently learned
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.
Francisco Noguera
Mar 13, 2008
Thanks for your comment,
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!
Cynthia Lopez
Dec 3, 2008
Micro Financings is a great idea
Micro financings I will have to agree, that it would make a great more benefit to people with small business. I will agree that it is sad for those who own jewelry stores and hair salons and do have to take out a loan for each times they need shampoo.I think that this would be even great for brining our econommy back to reality. I do enjoy the idea of micro financing. This could be the diamond in the rough that will help. Thank you for such a great post
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