Contribution of Micro Credit Program for Poverty Alleviation

Contribution of Micro Credit Program for Poverty Alleviation

Contribution of Micro Credit Program for Poverty Alleviation in Bangladesh

Poverty exists through the world as a curse and big trouble in the way of development. Grameen Bank has opened a new horizon in alleviating our poverty and has set a new example. Microcredit programs extend small loans to the very poor people for self-employment projects that generate income, allowing them to care for themselves and their families. When people deprived of their basic needs such as food, cloth, shelter, education, treatment, and so on is termed as poverty. It is playing a significant role in alleviating our poverty and improving the financial crises of our people, especially of the womenfolk.

The regular growth of the microfinance concerned parties has been promoted not only by market forces but also by conscious actions of national governments, Non-Governmental Organizations (NGOs), and the donors who view microfinance as an effective tool for eradicating poverty. In our traditional banking system, the rich people are offered with the opportunities of credit in exchange for security. Poor people do not have any access to the traditional banking system. The poor women of rural areas are never allowed to receive any credit without any security. But it is only Dr. Muhammad Yunus who first initiated the micro-credit program for the poor women of the rural areas and began to provide loans to the womenfolk without any security. The result was tremendous and incredible. He proved that the loans provided to the women are used properly for their self-reliance and the recovery of loans is 100%.

Poverty is a problem for all the countries irrespective of their level of development. It may be a lack of income or resources, a lack of coping capacity, a lack of basic human capabilities, a lack of institutional defenses, or in extreme cases a lack of all these. The rich people especially the males do not show any interest to repay loans whereas poor people especially poor women are very serious to repay the loans. Dr. Yunus started his microcredit program with a small amount of money which he provided to a few poor women living in the surrounding villages of Chittagong University where he was serving as a teacher. He wanted to prove that the poor people are very serious to repay the loans when they are provided with loans without any security. Thus he proved his success from the locality of the Chittagong area, where he provided loans to only 17 women. The amount granted to each woman was only one pound. All the women recovered the loan and the recovery rate was 100%. All the 17 women became self-reliant with the minimum credit provided to them. This success from Zobra village near Chittagong University inspired Dr. Yunus to vary tremendously and he gradually expanded his microcredit program throughout the whole country.

Now, this microcredit program is going on in more than 60 countries of the world. Many other countries are also going to undertake the microcredit program like Grameen Bank. Dr. Yunus and his Grameen Bank have been awarded the Nobel Prize in 2006 for peace. We really feel proud of Dr. Yunus who initiated the microcredit program for poverty alleviation in Bangladesh.  The universal objective of microfinance is to make it possible for large numbers of low-income people to access institutional financial services, hence the potential benefits of microfinance have accounted for its widespread adoption as economic development, job creation, and poverty reduction strategy.

In conclusion, the alleviation of poverty is an ongoing and gradual process for a country. Both theoretically and practically microcredit indicates a way out to get rid of poverty scientifically.