Microfinancing Eases Bangladesh Poverty

From Forbes

Small-loan programs are slowly but surely helping reduce Bangladesh's severe rural poverty, officials from an international aid agency said Sunday.

"Our evaluation says once poor people are given a chance, they can fight," said Luciano Lavizzari, director of evaluation for the Rome-based International Fund for Agricultural Development, or IFAD.

IFAD's program in this country of 140 million is a successful example of how aid programs like small loans to farmers and rural-based entrepreneurs can help raise a country's living standards, Lavizzari said on the sidelines of a poverty alleviation workshop for government agencies and independent groups that offer "microfinancing" loans.

IFAD is now helping about 3.7 million of the country's 54 million rural poor, Lavizzari said. Roughly half of Bangladesh's people live on less than US$1 (euro0.82) a day.

"Bangladesh is successfully progressing to reduce rural poverty," Lavizzari said, adding that his group's microloans have helped rural entrepreneurs start businesses that employ others, and made it possible for others to buy land for farms.

IFAD has allocated about US$393 million (euro324 million) to programs in Bangladesh since it started working here in 1979, Lavizzari said.

He said most of the people IFAD helps are women entrepreneurs and farmers who can't afford to buy their own land, he said.

"It's nice to see that almost half of our beneficiaries are women. It's encouraging," he said.

IFAD Assistant President Jim Carruthers said Bangladesh was becoming a showcase for the group's microfinancing strategy.

"In the future Bangladesh will be our leading program, and we want to take co-financing opportunities for our future programs involving bigger agencies."

A typical microloan in Bangladesh is usually about 5,000 takas (US$84; euro69).