Micro Credit

There are some institutions that believe the poor are good credit risks since they are more likely to be more responsible , when they are loaned money due to scarcity in providers. Micro credit is based on the old Chinese proverb, "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for life."

There is a growing number of customers of micro credit who moved from shacks to concrete-block homes; are now living with families who are well fed, well clothed and going to school.


Microcredit: Trickle-up Economics

"The concept is to provide seed capital, in most cases less than $200, to entrepreneurs too poor to qualify for traditional bank loans. The expected result for the businessperson's family is a self-sustaining income."

One extremely successful bank is the Grameen Bank which started giving out tiny loans under a system which later evolved to becoming a full fledged Bank. Today they reach five million, borrowers. They provide credit to the poorest of the poor in rural Bangladesh without any collateral. Credit is a cost effective weapon to fight poverty and it serves as a catalyst in the overall development of socio-economic

Sam Daley–Harris, Director, Microcredit Summit Campaignsays in the summit to be held in 2006 has two clear goals.

1. Working to ensure that 175 million of the world’s poorest families, especially the women of those families, are receiving credit for self-employment and other financial and business services by the end of 2015. (With an average of five in a family this would affect 875 million family members. )

2. Working to ensure that 100 million of the world’s poorest families move from below US$1 a day adjusted for purchasing power parity (PPP) to above US $1 a day adjusted for PPP, by the end of 2015. (With an average of five per family this would mean that 500 million people would have risen above $1 a day nearly completing the Millennium Development Goal on halving absolute poverty.)