Ending Poverty Together One Small Loan at a Time. www.rotarianmicrocredit.org. Thoughts for the day.
Elite – a small fraction of the population with an ever-increasing and disproportionate share of wealth
Wealthy nations – have poor populations but generally not extreme poor, this is described as Relative Poverty
Moderate economic development – now includes much of China and India. In general the standard of living is improving for these populations worldwide
Moderate Poverty – basic needs are met, but just barely - minimum means exist to achieve self-sufficiency
Extreme Poverty – all assets and energy go to daily struggle for survival; exists mostly in Africa, Asia, and parts of Latin America
For more on this subject, see The End of Poverty by Jeffrey Sachs
Decade for the eradication of poverty
2006 Nobel Peace Prize Winner
1998-99 Rotary International Award for World Understanding
Dr. Mohammad Yunus
The poor have:
Give a woman a fish, she eats for a day.
Teach a woman to fish, she eats for a lifetime.
Provide credit and training, she opens a seafood stand, feeds the village, and becomes a leader in the community.
A member is considered to have moved out of poverty if her family fulfills the following criteria:
1. The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor.
2. Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters.
3. All children in the family over six years of age are all going to school or finished primary school.
4. Minimum weekly loan installment of the borrower is Tk. 200 or more.
5. Family uses sanitary latrine.
6. Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.
7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money.
8. The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts.
9. Family experiences no difficulty in having three square meals a day throughout the year, i. e. no member of the family goes hungry any time of the year.
10. Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare.
“There is no conflict in having microcredit, education, health, empowerment, [and] training together; they support each other.
If you laid out the foundation of the financial system, it makes other interventions so much more powerful. If you come with education, health, and training, everything will make much more sense, and you get much more mileage out of your effort, provided you have the microcredit framework already built into the system.”
Dr. Muhammad Yunus, Founder of Grameen Bank
and Nobel Peace Prize Winner 2006
Since the early 1990s, through matching and 3H grants The Rotary Foundation (TRF) has funded microcredit projects worldwide.
Latin America: Mexico, Guatemala, Honduras, El Salvador, Costa Rica, Panama, Ecuador, Chile, Bolivia, Peru, and Dominican Republic
Asia and the Middle East: India, Philippines, Bangladesh, Sri Lanka, Egypt,People’s Republic of China, Indonesia, Afghanistan, Eastern Russia, Nepal
Africa: Kenya, Ghana, Niger, South Africa, Zambia, Nigeria, Uganda.
Note: this list does not include microcredit projects that were funded directly by Rotary clubs (working independently or with MFIs) that did not include TRF funds
There is no such thing as a “typical” Rotary microcredit project, since customs and business practices vary by region and country, but here are some generalities that apply:
NGO = non-government organization MFI = micro finance institution
A sophisticated Commercial Microfinance sector is emerging to serve the “poor”, providing banking, savings, insurance, and other integrated financial services to those on the “first rung of the ladder”
Those left behind, who cannot break the cycle of poverty with microcredit alone, also need assistance with basic nutrition, clean water, healthcare, and education – this remains the domain of strictly philanthropic efforts, hopefully leveraging the infrastructure developed by the commercial sector
Microcredit projects can be complicated and long-lived, and the details vary by culture and government. Effective projects often involve partnering with MFI’s (Microfinance Institutions) that have developed best practices and field resources in the target country. Since the early 1990’s, RI and TRF have modified their approach to revolving loan grants as a result of many lessons learned. However at this time there is limited practical information readily available for those wishing to start new banks.
Information sharing is just one reason why we have formed the Rotarian Action Group for Microcredit (RAGM) – we’re here to help Rotarians and their Rotary clubs around the world launch more microcredit projects,easier and faster, with measurable results, and in a way that capitalizes on Rotary’s unique strengths!
A Rotarian Action Group is a voluntary association of Rotarians formed for the purpose of conducting international service projects that advance the object of Rotary.
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