Byline: HAROON HABIB
Credit: SOUTH-NORTH NEWS SERVICE
SO Montreal Gazette (GAZ)
(Copyright The Gazette)
LP Bangladeshi bank gives poor a boost DHAKA - The abject poverty that afflicts nearly 50 per cent of Bangladesh's 110 million people has been the most intractable of the country's problems.
TX To bring these people into the economic mainstream, theUniversity of Chittagong's rural-development program has come up with two novel ideas using no-collateral loans: one to enable the poor to establish small businesses and the second to enable them to build homes. To put ideas to work, the Grameen Bank, a small experimental project, came into being in the early 1970s. Funded initially by the International Fund for Agricultural Development, it was started in the village of Jobra, near Chittagong, where the moneylenders' grip on the poor was a major obstacle to their search for self- reliance. Conditions for the bank's loans are a matter more of social engineering than of examination of balance sheets. Borrowers must agree to a 16-point code that is based on the recipients dignity and sense of self-worth. The loans are granted for income generating projects, services that a village needs: a pedal rickshaw, for example, or tools for repairing bicycles, or equipment for learning a trade. In return, borrowers agree to good village citizens by doing such things as planting trees and vegetables, educating their children and maintaining sanitary standards. When he takes out a loan, the borrower agrees to become a shareholder in the bank's savings plan. For example, a borrower who takes out a $100 loan gets a $95 and a share in the plan. He agrees to repay the full loan plus 16-per-cent interest in a 50 weekly installments. Since the premise is that the loans are made for some income- generating project, the borrower immediately has the means of repayment. The bank gets its money back and, with his $5 share, the borrower is also enrolled in a savings plan. The bank claims its repayment rate is better than 95 per cent. So successful has the Grameen Bank become over the years that it has expanded its lending operations to include home construction - * and recently won the Aga Khan Architectural Award-89 for its housing operations. * A far cry from the more typical Aga Khan Architectural Awards, which have been given for such institutional structures as the Haj Terminal in Saudi Arabia's Jiddah Airport, a Grameen Bank housing loan for the equivalent of about $420 pays for four concrete uprights, a prefabricated floor slab and 26 corrugated iron sheets. The result is basic shelter to which the borrower adds as he funds available. Some 4,400 of these flood-and water resistant houses have been built in the past few years. Since its inception, the Grameen Bank has lent $151.1 million to more than 600,000 beneficiaries in 13,000 villages; 88 per cent of its borrowers are women.
LOCAL KEYWORDS: POVERTY DEBT BANGLADESH
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