Micro Credit Project in Bihar, India

 In Bihar we will be working with Shan Ali, co-founder of Grameen Foundation Australia, (the Australian arm of micro-credit pioneers Grameen Bank). The State of Bihar has been identified as a suitable region to further develop the concept of “micro credit” in India.. Bihar is one of the largest states in India and third largest by population where close to 85 percent of the population live in villages. It lags well behind the other Indian states in human and economic development terms. Gautama Buddha attained Enlightenment at Bodh Gaya, a town located in the modern day district of Gaya in Bihar. So it perhaps seems fitting for us to be able to bring this enlightened concept to Bihar.

 “My friend Shan has had the honour and privilege of working with Dr Muhammad Yunus, founder and chief of the Grameen Bank during his many visits to Bangladesh and during his three visits (so far) to Australia” says Ron. He has seen first hand how Professors Yunus humble leadership and path breaking ideas have changed lives and motivated people at all levels of society to envision and work towards a poverty free world. In August 09’ President Barack Obama at a special White House ceremony awarded Professor Yunus the USA’s highest civilian honour, the Presidential Medal of Freedom handed to those who have made significant contributions to the United States, world peace and culture. When Dr Yunus received his award he joined a distinguished group of individuals that include Nelson Mandela, Mother Theresa and Martin Luther King, Jr. The Nobel Prize Committee has also recognized the work of Dr Yunus awarding the Nobel peace prize to the Bank and its founder in Dec 2006. They are fitting recognition to an individual and an organization that have made a unique and outstanding contribution to the cause of peace and humanity. On receiving this award Yunus declared the Grameen bank to be “a testimony to the potential of the poor”

 Our work in Bihar will focus on Villages, (mind you the majority of the population live in villages), so initially it will be identifying a suitable village and a community. (Grameen comes from the Bangladeshi word “gram” meaning village). We look for communities where there is a demand and where the local people can generate some sort of an income, then repayment of the micro loans become a viability.. In keeping with the Grameen model we will be lending only to women in small amounts for short periods of time. As historically they have proven to be the best clients. No collateral is needed from the clients but they would need to be part of a group (it is the group that will evaluate the loan prospects (defaulters can spoil it for everyone). Although we know with micro credit that on time loan repayments exceed 98%, bad debts are only 0.5 %. (thus they are out performing all other banks).

 We will be working with the local Rotary Club who incidentally have developed a proud association with Grameen over the years. The idea is to create an environment that will support the local people in changing their lives through their efforts.( In Bangladesh for ex Micro credit and Grameen have turned beggars into vendors and given the disabled the self respect of a business. This has happened against the backdrop of decades of wasted international aid. Bangladesh was not so long ago dubbed as 5^th world, today it is a far different story and we are looking at a situation where poverty can actually be totally wiped out  and the prospect of this happening in our lifetime is a real possibility.

 In Bihar our task will be initially to identify twenty people we can work with. The clients would be picked by the community themselves. The twenty would be interdependent and that means a reliance on everyone complying. The idea of not defaulting would be stressed. (We may look into the possibility of working with volunteers in Bihar who could set up a web-based “info” on clients), so our donors in Australia can actually see how progress is been made. It must be remembered that this concept is about empowerment not charity. The idea been to create opportunities for socially conscious people (in the donor country) to invest in the power of micro finance to reduce poverty. Today there are over four hundred replications of the micro credit model operating in over sixty countries. The general idea is rather than moving the villagers to the capitalists we are moving the capital to the villagers. So the resources are placed directly into the hands of the poor getting them involved in a myriad of business opportunities. In time the micro entrepreneurs would upgrade their skills and will see greater opportunities for themselves and their children. The recipients of the loans are seen as clients. The micro credit model provides opportunities for advancement not on religion, class or race but on hard work, ability, talent and imagination. The Grammen model is based on reinvented capitalism or socially conscious entrepreneurship. The mandate is really to end poverty, then everyone benefits. It is a concept that has been called a development miracle and in this case the miracle can keep repeating itself.

 I urge you all to get involved at the grass roots on our first “Bihar project”. There are three ways . One is to make a direct tax deductible donation to Grammen (pls mark payments Bihar project). Second is to have a chat directly to Ron to know more about the project, and how to get involved. Third gather together twenty people and Ron and Shan will present a documentary and a Q and A session after on Grameen.

Last year in Jan 2008 Bill Gates in remarks delivered at the World Economic Forum in Davos Switzerland asked everyone – whether in business, government or the non-profit world – to take on a project of creative capitalism in the coming year.” It doesn’t have to be new project” he said “you could take an existing project, and see where you might stretch the reach of market forces to help push things forward. When you award foreign aid, when you make charitable gifts, when you try to change the world – can you also find ways to put the power of market forces behind the effort to help the poor”? “We are living in a phenomenal age. If we can spend the early decades of the twenty first century finding approaches that meet the needs of the poor in ways that generate profits and recognition for business we will have found a sustainable way to reduce poverty in the world”

Mohammed Yunus, founder of the Grameen Bank

 Micro credit is such an opportunity, I urge you all to give it a thought and act. Our next project when we get Bihar off the ground is Sri Lanka.

 Remember amounts given don’t have to be big it goes a long way in countries like India and Sri Lanka.

For more information, go to http://www.grameen-info.org