Comment on the success of microcredit

A couple of members of Results Canada, wrote an op-ed piece for the Calgary Herald. Bob Dickson And Blaise Salmon remind us of the success of microcredit.

It is high time for some good financial news in the midst of the economic turmoil, fear and uncertainty that swirls around us.

Recently in New York City, the Microcredit Summit Campaign announced it has officially reached its goal of providing small loans to 100 million of our planet's very poorest families living on less than $1 per day! And not to rest on their laurels, new goals were set to reach an additional 175 million poor families by 2015, and bring 100 million of those families above the official poverty line.

Among those participating in this historic announcement were leaders who have been dubbed the three wise men of microcredit--Dr. Muhammad Yunus, founder of the Grameen Bank in Bangladesh and winner, along with six million of the poorest women in his country, of the prestigious Nobel Peace Prize; Sam Daley-Harris, founder of RESULTS, one of the world's leading advocacy and educational institutions for ending poverty; and John Hatch, founder of FINCA, the largest microcredit organization in the Americas.

These visionaries put together the World Microcredit Summit, hosted by Hillary Clinton in Washington, D. C., in 1997, and set the now historic goal of reaching 100 million families by 2006.

Microcredit programs around the world have helped millions of the poorest families to care for themselves and their children. The official announcement stated that more than 106 million of the world's people living on less than $1 per day received micro-loans, and that this goal was reached in late 2007. It took most of 2008 to count and verify these numbers. This is a remarkable achievement. When the campaign was launched in 1997, there were only seven million very poor borrowers worldwide.

Microcredit funds a huge variety of small, self-employed businesses for people who wouldn't normally have access to credit. Interest is charged to sustain programs and organizations, and repayment rates are higher than 95 per cent. Microcredit provides hope and opportunity for the poorest who are often left out of the global economy.

The most famous example of microfinance, the Grameen Bank, now employs more than 16,000 people, has more than seven million clients--mostly women--and has lent more than $7 billion, stated its founder Muhammad Yunus.

Nineteen years ago, Yunus was asked, "What is the first thing a woman does with the proceeds from her micro-loan?" He was expected to say that she feeds her family or puts her children in school.

"The first thing she usually does," Yunus replied, "is bring her children home."He went on to explain that during hard times in Bangladesh, families were often unable to feed their children. So they would send them out to work for other families, even when they were as young as five or six years old, for a pittance of money or the promise of food.