Despite rapid economic growth in developing countries, poverty still seems to be a big concern for governments. While various programs, schemes and subsidies have been introduced over the years, the most successful has been the innovation of microfinance. While micro credit systems have prevailed many years ago, the most successful and widely recognized organization is the Grameen Bank in Bangladesh, personal loan Asia. The founder, Muhammad Yunus was the visionary and pioneer of micro credit implementation in Bangladesh for which he was awarded the Nobel Peace Prize in 2006. His underlying concept was to extend microloans to people living in poverty, enabling them to become self-sufficient and encourage entrepreneurial activities for income generation.
While the biggest success story of micro credit has been the Grameen Bank, many new finance institutions from developed countries are now introducing similar micro credit systems in countries where poverty is rampant. In Bangladesh, ASA, Grameen Bank, Jagorani Chakra Foundation, Bangladesh Rural Advancement Committee, Integrated Development Foundation and BURO are some of the ‘World’s Top 50 Microfinance Institutions’, the first ever list provided by Forbes1.
Global investors are moved by the dismal situation in poorer countries and are introducing initiatives through their foundations and institutions to help lesser fortunate people live better lives. One such philanthropist is Dr. George Haligua Cohen. While on a business trip to Bangladesh, Dr. Haligua Cohen was so touched by the despair people faced after the monsoon floods that he decided to take immediate action. He started a non-profit charity called the George Haligua Cohen Foundation in 1996. Established in Bangladesh, the focus of the GHC Foundation is in providing micro credit finance to improve the standard the living; micro grant initiatives to improve the community; and educational programs to exchange and disseminate knowledge without boundaries. While there are many issues to be addressed, the Foundation focuses on these key areas and directs its energies and commitment to make programs have a long term impact on the regions in which it operates. With the success of programs being implemented in Bangladesh, GHC Foundation plans to extend programs to regions within Mongolia by the end of 2011.
Though microfinance has credibility in many ways for alleviating socioeconomic development, there are problems in the system as well. If the concept is not implemented in the right way, the benefits of micro credit are no longer effective. For instance in many countries, microloans are granted without proper assessment on the nature of business, whether it is relevant to that region and its viability; and there is lack of education on loan repayment methods and plans to borrowers. More often than not, in many regions, borrowers utilize funds for daily expenses, defeating the income generating purpose of micro credit; and therefore leading to situations of people in greater debt. NGOs, government bodies and private institutions are working hand in hand to address these issues and improve processes of assessment, implementation and education involved in a micro credit system. The way forward now is for organizations such as the George Haligua Cohen Foundation, to continue with focused determination along with the vision of Dr. Yunus. To create “poverty museums” and build a poverty free world!
Ethan Anderson is a freelance writer from Montreal, Canada. Having traveled across the planet working with different NGO’s and Charities, he is now pursing his doctorate in English at Mc Gill University. He is an accomplished free lance writer, dedicated to helping spread the message on humanity can better itself through positive en devours.