The crushing burden of microcredit
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In Bangladesh, FRANCE 24 reporters find that far from alleviating poverty, microcredit has been plunging people deeper into debt.
Microcredit changed Shobi Rani’s life. An impoverished yoghurt seller, Rani travels across her region in northern
Three months ago, Rani received a loan for 500 euros from the Grameen Bank to start her little dairy enterprise. Every week, a bank official carefully checks how her business is going.
The brainchild of Rani’s fellow countryman Mohammed Yunus, who won the 2006 Nobel Peace Prize, the Grameen Bank has been hailed for executing the microcredit mantra: giving the poor a helping hand, not a handout.
Called “the banker of the poor,” Grameen has been attracting big businesses such as Danone, the French food giant, who supplies the yoghurt to Rani and thousands of other women in the area involved in similar projects.
But the situation is far from rosy in Kalihati, one of the first Bangladeshi villages to benefit from Grameen’s low interest credit scheme. The villagers here who have taken a loan are unable to reimburse their credit, and claim to be harassed by Grameen Bank representatives. Korshed Alom, a former debt collector, was put into early retirement for having questioned the Grameen Bank’s methods: “Their technique is to scare borrowers and insult them. We tell them to sell their clothes, that they have no other choice. I’m not proud of myself, but several times, I had even been obliged to say ‘sell your children.’”
The Bank’s representatives choose not to respond to these accusations. It is impossible to obtain an interview with Mohammed Yunus, and the Grameen Bank headquarters are off-limits for journalists who are too curious.
The Grameen Bank counts more than 100 million clients in the world’s poorest countries. It targets 500 million clients in 2020.