MICROFINANCE AND POOREST COUNTRIES

ABE, Kiyoshi

The world is divided into developing and developed countries. There are two kinds of banks: conventional ones and unconventional. Commercial banks are usually based on mutual distrust, while new unconventional banks, microfinances, are based on mutual trust. The origin of micro finance is deeply rooted in Asia. In 1976, Grameen Bank in Bangladesh was founded by Dr. Muhammad Yunus. It reverses conventional banking practice by removing the need for collateral. It creates a banking system based on accountability, participation, creativity and mutual trust. It revolves around an unshakable personal commitment to fighting poverty and an equally strong sense that the established order has little to offer those it has left behind. The success of the Grameen Bank is attributable to innovation and flexibility, group responsibility, return of its earnings to participating poor people, etc. Peer pressure and equal participation unquestionably lead to success. Micro finance institutions claim a high rate of repayment, due to the participatory structure in which debtors respect their obligations. The administrative structure is generally light, and the profit is kept at a minimum just enough to bear total cost. Grameen Bank as a whole works quite well. No wonder, there are many replications throughout the poor world. Micro finances have been shattering myth after myth. The myth used to be that women are not bankable. Bagladeshi women have turned out to be productive members of the society, which is potentially true of other women in other countries. The incredible successes of microfinance programs in Bangladesh and other Asian countries will certainly give hope, courage and optimism to other poor people on earth. Micro finance networking will help alleviate poverty in many countries, developing or developed. More stability in such poor countries will certainly benefit advanced economies and the world.

https://opac.ll.chiba-u.jp/da/curator/900024804/

https://opac.ll.chiba-u.jp/da/curator/900024804/KJ00003964067.pdf

紀要論文

0912-7216

AN10005358

千葉大学経済研究 = Economic journal of Chiba University

19

3

65

92

2004-12-15

publisher

経済研究 (ONLINE ISSN 2436-8873)