The 2006 Noble Laureate Mohammed Yunus, after
considerable research, came to the conclusion that the
eradication of poverty need not necessarily depend upon
donations. The poor, he found, were equally gifted with
potential and enterprise and therefore completely capable of
lifting themselves out of poverty, provided they were given
the proper tool – money. He has dedicated the last 30 odd
years of his life in doing just that: the extension of
interest free, collateral free, small loans or micro-credit.
The establishment of Grameen Bank (co-Noble
Laureate) has been a landmark in micro-credit for it has
facilitated the development of rural Bangladesh. Grameen Bank
operates as a self-sustaining bank, with the poor as both its
owners and borrowers. The money repaid by one group is
recycled and given to others - thus continuously generating
income. Its principles of extending these micro loans to only
the poor ensure that the benefits of the bank go to the needy
alone. Further, its repayment rate is higher than that of any
nationalised banks. Another novel feature of Grameen was that
its target customers have almost always been women. The
Grameen Bank did not merely seek to bridge the economic
barrier, but also sought to transcend gender barriers. Yunus
believed that that women were more tuned to the needs of both
the children and the family and therefore better at handling
finances in the proper manner. At present there are ‘Grameen
replications’ in over 45 countries.
The provision of interest-free rural credit
is an important tool to empower the poor. Poverty alleviation
has been one of India’s policy priorities since Independence.
Despite several initiatives, India’s rural poor seem to be
stuck in a cycle of poverty. In this, the second edition of
Rights First, the team looks at the problems faced by the
rural poor in availing institutional credit and asks whether
legal solutions are possible.
- Rights First Editorial
Team
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The
National Rural Employment Guarantee Act, 2005: Content and
Implementation