Micro-credit is one of the latest "feel-good" projects to "solve" the problem of world poverty. The idea is that some do-good "first-worlder" organization lends a few bucks to each of a bunch of third-worlders in some pest-hole villages so they can buy some basket-weaving material and make baskets which they can sell to each other -- and maybe -- whoopdedoo -- even export!
Baskets is just an example.
The problem is their CULTURE. Their cultures discourage innovation and capital building. Their cultures encourage overpopulation outstripping EASILY available resources of arable land, clean water, and energy.
Can micro-credit solve world poverty? Dare I say no?
A problem is a lack of entrepreneurial culture, and I see this in many places in the West also, so it's not just "them."
Another problem is lack of money for infrastructure. An American entrepreneur does not worry that his child could die of measles, pneumonia, or simply from the water he drank this morning. An American entrepreneur does not have to pay for his child's education (elementary or high school). An American does not have to walk three hours every day to fetch worm-infested water. An American does not have to see the things he "eliminates" from his body ever again, because there is a sewer system.
If we want poor people to have a new, entrepreneurial culture, we should train them to have one. But if these people cannot read or write, have no access to phones or electricity or CREDIT, are not even legally registered, and cannot afford 12 cent malaria shots to protect their kids, then "culture" is an issue secondary to BASIC FINANCIAL NEED.
the concept is successful through SHGs. in India.
the poor individual first form a self help group and start working within the group . the peer pressure maintains the repayment in time.
after this group attains a track record of work and generates working habit with a bank , the credit is availed.
i think the micro credit can resolve the poverty to a large extent.
every culture changes by the needs . the need of the poor and the results will make this successful.
but there is another issue the working environment . the government has to make the working environment more positive., small investment dies easily. the collective effort of political , social , economical change perpetrators have to generate positive environment for these small entrepreneurs besides simply pumping in the money.
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