Grameen Bank

Synopsis:

This essay looks at some of the many concerns in regards to microfinance. It focuses on how high interest rates and no business knowledge, results in that borrowers in Bangladesh may become even poorer by embracing microloans. Further it indicates that implementation of the repayment methods results in assaults, sexual harassments and repelling of women in local communities and villages. It also looks in to see how Grameen Bank has misused financial aid to support other very profitable companies, resulting a dispute with the Royal Norwegian Embassy in Bangladesh. The essay reports evidence of incidents that are clearly oppositional with the main goals of financial aid and global development. Therefore the essay concludes that microfinance are not a blessing for developing economies.

Title: Microfinance

Introduction

Muhammad Yunus and Grameen Bank introduced Bangladesh to the concept microcredits in 1983, which they received the Nobel Peace Price for in 2006 (The Nobel Price, 2006). While the purpose was to give small microloans to poor women, there are now rising concerns that high interests and unbearable repayment plans, may lead to harming poverty instead of solving it. Microfinance also assumes a strong entrepreneurial side from its borrowers, but since most individuals are not entrepreneurs, the loans are often used to finance other activities. This has caused suppression and harassments against women, which results in a reasonable questioning of microfinance as a tool against poverty. Grameen Bank has also received millions in financial aid for the work against poverty, but evidence shows that Grameen Bank has taken money out of the bank to start other profitable companies like Grameen Phone, which reason a questioning of what Grameen Banks true ambitions are.

Microloan can increase poverty

Muhammad Yunus has by many occasions stated that the access to capital is a human right and that Grameen Bank provides that service. While the true...