Tuesday 07 April, 2020

Microcredit: panacea or a problem for poverty?

Fahad Galib Ani
Published: 05 March 2017 Sunday, 03:22  AM

Microcredit: panacea or a problem for poverty?

"Give a man a fish; he`ll eat for a day. Give a woman microcredit, she, her husband, her children and her extended family will eat for a lifetime."-Bono

Bangladesh is especially productive land for the exploration of microcredit; as the structure was designed in Bangladesh in the 1970s. Grameen Bank established by Dr. Muhammad Yunus. He got Nobel Peace Prize ten years back. Today, the nation is evaluated to associate with 13 million microcredit clients. Microcredit is often granted by organizations, and other supporters of the system involved in the customers to operate. The idea is that people, who are not creditworthy, can be used for short-term small loans to run their own small businesses.

Many of the clients are women, whose role in Bangladesh has traditionally been poor. Girls drop out of school early and marry early. Family’s quorum is often in the hands of men and women participate just inside the home life. However, the change is happening. Majority of women feel that their financial situation has been improved. Microcredit has a vast impact on women empowerment.

According to the different survey of microcredit; women not only to bring their own revenues, while also increasing their decision making power in the family in many cases. Husbands usually do not see the wife`s income as a threat. One of the main positive effects of microcredit is that men have realized that women make their own choices, and they can be trusted.

Microcredit has been studied in the academic world in the past a lot from many different angles. The results are often contradictory to each other. According to some studies, the importance of microcredits in reducing poverty has been exaggerated and women do not necessarily empowered. In particular, loans to high interest rates have been criticized, as well as the fact that they do not reach the poorest of the poor.

Microcredit cannot be regarded as only remedy. The status of women is also affected by many other factors, and the change is slow. In addition, microcredit might have some of the negative effects. They may even indirectly cause domestic violence. Taking a loan can also lead to a spiral of debt.

However, microcredit can be customized, to develop social norms and values ​​of women in a more positive direction. People required more training. The eradication of poverty depends on many things, not just for microcredit. This could be one of the ways to help women and get them out of their homes.


Fahad Galib Ani, M.A International Business, HTW- Berlin