Magazine article New Internationalist

Capital and Kindness: Micro-Credit Is No Miracle [Problems]

Magazine article New Internationalist

Capital and Kindness: Micro-Credit Is No Miracle [Problems]

Article excerpt

THE Grameen Bank in Bangladesh, which pioneered the concept of micro-credit, has come under attack. Hailed as a development success story, the Grameen Bank allowed the poor to obtain small loans without collateral. About eight million families obtained micro-credit to launch tiny but profitable ventures. Muhammad Yunus, the Bank's founder, has shown that the poorest of the poor will repay their debts 98 per cent of the time-a rate far superior to the record of commercial banks. The World Bank and corporate gurus from George Soros to Ted Turner have flocked to Yunus' side. 'They see him as the proof that a kinder, gentler capitalism can work for the poor,' says Pat Mooney from the Rural Advancement Foundation International (RAFI).

Then the Grameen Bank began planning a relationship with the exploitative agricultural transnational, Monsanto Corporation. The planned collaboration was cancelled due to public pressure. The arrangement would have given the Bank $250,000 to provide loans to poor farmers to buy Monsanto's agrochemical and biotechnology products.

The furore rekindled a range of much wider concerns regarding the role of micro-credit in community empowerment. Many people are concerned that the hype stirred by the World Bank, in its call last year to extend micro-credit to more than 100 million poor families by the year 2000, suggests that micro-credit is seen as a panacea for poverty alleviation. …

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