I pulled this book from the Etsy book club reading list - I usually can’t participate in their online meetings, but I make time to read the books. This particular book grabbed my attention because of what it means to me as a female microbusiness owner.
Perhaps calling it a book review is a misnomer - it’s more of a concept review. As a microbusiness running on no loans whatsoever - not even credit cards - I’m particularly interested in the project from a debt avoidance/debt recovery point of view. After economist Mohammed Yunus encountered a woman in Bangladesh/former western Pakistan whose life could be transformed from abject poverty to reasonable comfort for the price of $27, he created a microfinancing project that eventually became known as the Grameen Project. In this project women - and only women - were approached and offered loans frequently totaling less than $50, so long as they could form an appropriate coalition of five women to put each other through the banking process.
It has turned out that Grameen (a variation of the word “village” in Bengali) has been extremely effective in raising families above the poverty line, worldwide.
The concept on which the Grameen Foundation operates - microlending - runs converse to what banks and economists practice. Banks demand literacy and collateral from their customers, but the system that Yunus established demands neither, and does not charge interest. It also rethinks the mindset of banking: the practice of microlending to end poverty is not about having “more” or about increasing luxury. It is simply defined as having a reasonably clean place to live, with a roof, regular access to food for the entire family, and necessary health care.
The mainstream practice of lending is, especially in comparison, by and for the already affluent: you must already have affluence to have collateral required for the loans requested, and the loans may only be of a significant size. The microlending of Yunus is not the stuff of credit card usury: people aren’t enslaved by these debts, they are interest free - and he reports a continuing repayment rate of 98% of borrowers, even in the face of natural disasters.
This particular program doesn’t apply to me, personally, but I am fascinated by what it might imply if more lenders began exploring these practices. I run on a bootstrap - and a shoestring. Often my end of month decisions involve making choices between packaging and raw materials, between customer service and legal/ethical obligation. It makes me curious, even though I most certainly am not experiencing poverty.
I’m well aware I have my feet planted in the ground of the seismically shifting US economy, and I fully expect to see microcredit and microlending become increasingly more common as we move progressively back towards cottage industries.
