This year, the Grameen Bank and its Bangladeshi founder Muhammad Yunus were awarded the Nobel Peace Prize. Established in 1976, the Grameen Bank is one of the first experiments in microcredit lending–the concept of distributing group loans to disenfranchised populations, primarily women.
Because of its success, the Grameen Bank model has been replicated all over the world. By providing loans to populations once cut off from financial services, recipients can start a business, for example a small farm or sewing business. As opposed to a welfare model, microcredit offers the chance for emerging entrepreneurs to secure their incomes and livelihoods.
Grassroots and non-governmental organizations (NGOs) highlight how microcredit has the potential to empower the poor. Neoliberalism proponents celebrate microcredit and welcome a new population of income-earners to target products and services. Ultimately, these new income earners can build power and confidence within their families and communities.
However, microcredit has its critics. Three decades after the Grameen Bank models, millions have received loans. Yet Bangladesh continues to have high rates of poverty. Critics argue microcredit perpetuates the subservience of the poortransferring their reliance on the state tothe highly regulated Bank.
Does microcredit offer the chance for true economic or political transformation? Or, is it enough that microcredit offers the chance for small families to secure an extra meal, something that social movements cannot guarantee. By targeting microenterprise credit at women some economists argue that countries are sacrificing economic growth in favor of poverty reduction and the welfare of children. If this trade-off exists, is it worth it?
Join us this week as we learn more about microenterprise and explore its potential as a form of economic justice.
For more informaiton, please contact Kristin Millikan at 312.422.5580.