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About Microcredit

  • Özgür Arslan
  • Apr 23, 2017
  • 2 min read

Microcredit helps poor people to decrease poverty. This terminology was gained new meaning by Muhammed Yunus. He would like to eliminate the poverty and his first initiative is to develop agricultural irrigation productively. Despite his effort, he could not achieve his desired goal in this program. To put it another way, he failed. He came up with the new and unique idea for poor people. He noticed that bank generally gives middle or upper-class people a loan, so they can enrich themselves. However, poor people are becoming more and more impoverished. He transformed microcredit for whole poor people. In other words, he made microcredit usable for people who are below the poverty line. He created Grameen bank with the bank. Although a lot of people were biased. Grameen bank broke down the prejudices. This system can both decrease or stop the economic recession in long term. However, it is not enough. To put it another way, this system should be supported for great economic development. For instance, Steve Beck and Tim Ogden’s article shows that Bangladesh’s economy has not even developed with microcredit system. Even it has fallen one ranking in the world due to the fact that given whole microcredit should be supported by training how to use this system or how to make money. At that time, this system will become more productive and effective. In addition, according to beware of bad microcredit text, there is a good suggestion to solve the microcredit’s problem. Back and Ogden argues that small and medium size companies can be invested for their growth. Developing local economies can increase the welfare of local people. Taking everything into account, microcredit is beneficial for the development of underprivileged people if governments or non-profit organizations compensate for the economic problems with best solutions such as an investment for the small business owner. In other words, economic reforms should be maintained with microcredit.

References:

1. image by www.BillionPhotos.com

2. Beware of Bad Microcredit by http://hbr.org/2007/09/beware-of-bad-microcredit/ar/1


 
 
 

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