Grameen Bank; Queens Branch May 7, 2008 Thomas The most diverse county of the United States will have the first US branch of the world’s best known microcredit lender.
Sunni Sister had a post a few days ago linking to a video that was very critical of Grameen bank. The video is transcribed in the comments and someone also posted a link to this article. I’m very skeptical about micro-credit in general and the Grameen bank in particular because historically these kind of anti-poverty programs have been disasters for the poor and are only popular because they bring wealth to the already wealth. The briefly trendy scheme to help slum dwellers in the developing world gain title to their land holdings would be an example of that. But I was not very informed about the effects of Grameen bank before reading these articles. I’m especially interested in what the article says about Grameen bank and other development groups perpetuating gender discrimination by relying on sexist stereotypes about women’s greater compentence with money and community involvement. I see this rhetoric about women used a lot in the development organization I work for and while it’s true and valid in a lot of ways I don’t think many of us in the NGO world have really thought about the causes behind this and the sexism that is enabled by using these techniques.
innteresting, i wonder if they’ll be forced to lend to men. in bangledesh, the men tend to drink the loans away, so they don’t bother.
Yay, the microfinance I have encountered has been spectacular for those involved (receiving the loans).
my sense is that they’re working for the borrower but whether or not the lender is really making money is questionable. one socially-conscious vc firm told me they have a double bottom line. they’re eeking out a profit from the loans, but clearly underperformed their index. nonetheless, they went back to their investors and explained that even though the returns stunk, a lot of people where making their way out of poverty, ie..the 2nd bottom line. most investors stuck with them. obviously socialism and communism are still very powerful ideologies in s.asia and those in power fear losing their base to the free-marketers, and this breeds a lot of resentment.
With Bangladesh being a Muslim country alcohol is not permitted, so the comment about men “drinking the loans away” is not true in this case. Alcohol is not available in Bangladesh, except for in a few international hotels, and never to Bengali nationals, it is punishable under Shari’a law. However, the point behind this rationale of loaning to women is due to the fact that Grameen Bank has found that if a woman earns $10 then all $10 will go to “development” purposes; ie. children’s education, healthcare, improving the home, buying supplies for income generating purposes, and feeding the family. In contrast, it was found that men tended to spend the money on less development focused expenditures. Another strong reason for lending to women is that women have been marginalized all over the world, and particularly in Muslim countries, therefore they didn’t have access to money and often never handled money before. This is important because one of the necessary conditions for successful microfinance is the lack of opportunity and competition from other sources (also one of the reasons MF is less successful in the US) making the high need and limitted options a strong motivator for repayment. To comment on the questionability of who is making money off this venture I must say that, in spite of my own tendencies towards cynicism, throughout my extensive experience with Grameen Bank I found their work to be some of the most altruistic of all humanitarian efforts. I spent last summer in Bangladesh doing an internship with GB, spending time at both the Head Office and in the villages, and I spent all my time learning about the organization and how it influenced the borrowers and the bank employees. Without giving away exact income information you should know that the wages employees are earning are very low, and from all my conversations I found that their motivation for working there was to help the poor not to make money. In addition, grassroots level projects have very high overhead costs. In fact, if you only consider one aspect of GB work, that they bring the bank to the poor, this means that there are thousands of branches serving difficult to reach villages, which is a very expensive element of the business and does not bring in much revenue due to the small loans they provide. GB is owned by the borrowers, they are the shareholders of over 90% of the company. Until now the revenues have been going into an emergecy relief fund that distributes interest free loans to those affected by natural disasters (unfortunately very common in Bangladesh) but soon they will be distributing revenue to the shareholders, which are the very same poor people to recieve the loans. Either way, and in whatever way revenues are disbursed, it is always with keeping the best interest of the poor in mind. Many are quick to criticize the Grameen Bank, and I have personally looked into most of the criticisms trying to find out what the truth is. I have found the criticisms to be unfounded and often times made without any solid informational foundation. I find it unfortunate that when an organization that truly deserves praise is established, and after 30 years of successfully operating and helping others is finally internationally recognized, that rather than joining the Nobel Committee in praise or assisting in the fight against poverty people choose to make snide and ignorant remarks about an organization we should all support and admire.