Microcredit
Microcredit is an instrument of economic development to support the small businesses, which usually are the fundamental economic income of millions of families that live in third world countries.
Usually no financial support or credits are granted by traditional banks to support such small rural or urban businesses, because they are unable to give guarantees or due to the fact that they are too small. This is why the program of microcredits is an alternative solution for these micro-industries (agriculture, production, farms and commerce/services). The planning of the disbursement of these loans to enterpreneurs or groups, enabeling them to develop projects leading to financial self-support. The increase of income that arrises does not only bring a improvement of living conditions in the single households but also has a significant impact on the whole community. The microcredit program is often combined with a support program such as technical trainig, managerial formation or the creation of a commercial net.
History of microcredit
Grameen Bank. In Bangladesh, Professor Muhammad Yunus addressed the banking problem faced by the poor through a programme of action-research. With his graduate students in Chittagong University in 1976, he designed an experimental credit programme to serve them. It spread rapidly to hundreds of villages. Through a special relationship with rural banks, he disbursed and recovered thousands of loans, but the bankers refused to take over the project at the end of the pilot phase. They feared it was too expensive and risky in spite of his success. Eventually, through the support of donors, the Grameen Bank was founded in 1983 and now serves more than 4 million borrowers.
Microcredit programs throughout the world improved upon the original methodologies and defied conventional wisdom about financing the poor. First, they showed that poor people, especially women, had excellent repayment rates among the better programs, rates that were better than the formal financial sectors of most developing countries. Second, the poor were willing and able to pay interest rates that allowed microfinance institutions (MFIs) to cover their costs..
Le Donne
The majority that benefits of the microcredit programs are women, often abandoned by their husbands, widows or have a numerous family. The intention is to improve their conditions by direct involvement in economical activities. Most of the time, as a matter of fact, women have evidenced better management of economics and education. They turned out to be more reliable than man .
Microcredit is an authentic revolution in how to devise humanitarian help, forasmuch it refers to a method that encourages busyness and dignity of the persons, that receives a chance of development. The idea of “donation”, that often has caused disservices by dictated aid programs and which created dependency, is left behind, in favour of personal commitment and responsibility through credits, which need to be paid back throughout work.
The credits usually do not exceed 100 Dollars, which normally are enough to create a small commercial or agrarian activity.
In the developing countries an “informal economy” is very important for the national growth. The small companies are the keystone of the communities development and represent up to 50% of some national economies. The micro-welfare as a result of these small businesses often lead to better sanitary and educational services for women and children and that way also human development is promoted.
Upgrading such activities means to refresh the more vital economical fields, which may help relaunching occupation, resources circulation and investment opportunities.
2005 was the international year of Microcredit
http://www.yearofmicrocredit.org/