 Microcredit: Giving poor people a chance |
Issue 105 |
Microcredit: Giving poor people a chance
"All the poor anywhere need is a decent chance" Professor Yunus.
Professor Yunus began the Grameen bank, the first microcredit bank in the world.
Imagine that you are a talented sewer; you make excellent quality outfits that sell for a high price at a local fashion store. You are very proud of your sewing skills and enjoy seeing other people wearing your merchandise. However there is one huge problem, you are extremely poor. The money you make sewing clothes barely covers the money you have borrowed to buy your sewing machine.
You borrowed the money from the local loan shark who is charging you enormous interest. After paying him you are left with very little money to feed your family and often you go without so that they can have food. When this happens you get tired and are not able to make as many clothes. This means you don't get paid as much and the money you do make goes to paying off the loan.
You cannot see a way out of this problem. If you don't find another way to make money you don't know what you will do. Because of this you take your eldest two daughters out of primary school and teach them how to help you sew. Your daughters are angry as this means that they will not get an education and they have learnt at school that people with an education have better chances in the future because they will probably be able to find work that pays more money. You are sad as you know what your daughters say is true but you also know that if you don't make more money the loan shark will take the tiny shack your parents left you. You face the prospect of your family being forced to live on the streets. You know that you have no choice.
The story above is an imagination exercise, but for millions of people in the world it is the reality of poverty.
Poor people often live from day to day and have little or no savings for major expenses such as illness, house repairs or education. Imagine if the person in the story above got sick, the debt would be passed onto her family who would probably end up living on the streets. However there is hope.
Since the 1970s the idea of microcredit has developed. Microcredit is where poor people are given access to small loans at manageable interest rates. Often the loans are given to groups of people, generally women who pool their resources and skills together. As well as receiving a loan many microcredit institutions will teach the people skills in management and income generation at weekly loan meetings.
These meetings have also become important times to learn about health, hygiene and family planning. Because 95% of the people that are lent money in microcredit schemes are women the schemes are helping to address not only poverty but also the gender inequalities that exist in many areas of the world.
Microcredit is a groundbreaking way to help poor people to help themselves alleviate poverty. With less interest to repay, more profits in business as well as increased independence and decision-making, millions of poor people have been able to improve their lives. 2005 has been dedicated as the International Year of Microcredit.
The activities below will help you to explore the history of microcredit. They will also highlight many of Caritas' microcredit schemes which have positively changed the lives of hundreds of thousands of people living in communities. Microcredit gives poor people the opportunity they need to break the cycle of poverty.
Activities across the Curriculum
1) Na Rin is from a small village in Cambodia. As a consequence of her involvement in a Caritas Australia Microcredit or "Savings Group" scheme Na Rin and her family have been able to improve their lives. Go to the following site and read Na Rin's story and complete the activities on page 3: www.caritas.org.au/ourwork/pc05/materials/
materials/Caritas%20Australia_Project%20
Compassion%202005_Schools_
SecondaryStories_Web.pdf
You can also watch a DVD about Na Rin by clicking on the following site: www.caritas.org.au/ourwork/pc05/
materials/movies/cambodia_movie.htm Activities and further information associated with this story are found at www.ozspirit.info/2005/97b.html
2) 'Asia Our Neighbour: Bangladesh' is an excellent video and education package that deals with many issues related to Development, including Microcredit. It is suitable for students in Years 5-8. For your free copy of this resource go to the following site:
www.caritas.org.au/education/edu_order_form.pdf
The teaching resources can be found at:
www.caritas.org.au/education/Bangladesh.pdf
3) Microcredit schemes have been identified as a key tool to help fulfill the UN Millennium Development Goals. Find out more about the MDGs by reading the following OzSpirit issue and completing some of the activities: www.ozspirit.com/2004/78bg.html
HSIE/SOSE
1) The first Microcredit bank was founded in Bangladesh by Professor Yunus. Go to the following site and read about the history of The Grameen Bank and then complete the activities below: www.globaleducation.edna.edu.au/
globaled/page1540.html
- What does the word Grameen mean?
- Who was the first person Professor Yunus lent money to?
- Imagine you are this person. Write a 1 page recount about your experiences with Professor Yunan. Make sure you include information about before you met Professor Yunan and after. Write about the change that Microcredit has made to you.
- Find 5 statistics which indicate the importance of The Grameen Bank.
- The following quote was said by one of The Grameen Bank's directors, Manjira Khatum. She was destitute when she received her first loan but now she runs a tailoring shop: "We may be poor, but we are not poor in mind". Rewrite this quote in your own words. What do you think it means?
2) Answer the following questions related to your understanding of Microcredit schemes:
- In what ways do Microcredit schemes and The Grameen Bank differ from other lending institutions?
- Why do you think Microcredit is so important to people living in poverty?
Art
The designation of 2005 as the International Year of Microcredit shows that the global community recognises the importance of Microcredit for global development. Raise awareness about Microcredit in your school by creating a visual display of all the positive aspects of Microcredit. Include a catchy slogan. Use information from the official Year of Microcredit site in your poster;
www.yearofmicrocredit.org/
English
Read the message by Kofi Annan the UN Secretary General when he launched The Year of Microcredit at the following site: www.yearofmicrocredit.org/docs/
SGvideo_final.doc
pages/whyayear/whyayear_highlights.asp
1) The following quote is by Kofi Annan UN Secretary General: "Sustainable access to micro finance helps alleviate poverty by generating income, creating jobs, allowing children to go to school, enabling families to obtain health care, and empowering people to make the choices that best suit their needs."
- Discuss the importance of Microcredit in poor communities.
- Both Kofi Annan and Professor Yunan comment on the power of Microcredit to give people choice. What choices does money give you in your life? How does Microcredit give people choice?
- In what way do you agree or disagree with the following statement:
'Choice is important in alleviating poverty, it is also important for a person's spiritual well being.'
2) Visit the following site and read through a United Nations report on Microcredit: www.gdrc.org/icm/iym2005/
role-of-microcredit.html
- Write down all the positives that are stated in the report.
- Discuss any problems you see may be associated with Microcredit.
Other Useful Links
www.grameen-info.org is the official site of The Grameen Bank
www.ausaid.gov.au/publications/
focus/focuspdfs/0105/focus_jan05_23.pdf provides information about AusAid's involvement in the International Year of Microcredit
www.un.org/millenniumgoals/ has excellent information and other links on The Millennium Development Goals
www.tanzania-africa-development.com
/what/savings.asp is the website of Caritas DSM, the site outlines the Micro Credit schemes that have been so successful in Tanzania.