Without wishing to be rude, sometimes you have to be in order to correct the wrong-headed, selfish nonsense some people have written on this subject.

Try reading this a first-hand account of growing up in a village in Bangladesh...let him tell the story.

Subject: Dallas Morning News op-ed "Microlending making a dent in poverty"
http://www.dallasnews.com/sharedcontent/dws/dn/opinion/viewpoints/stories/DN-rahman_29edi.ART.State.Ed...
Fazlur Rahman: Microlending making a dent in poverty
Microloans are making a dent in poverty
08:57 AM CDT on Monday, October 29, 2007
Growing up in a village of Bangladesh, I knew firsthand the suffering of poor women. Though the villagers did their best to help one another in times of need, in the years of drought or flood – which seemed to come regularly – there wasn't a whole lot they could do.
I remember one particular woman in our village, before the advent of microcredit. She and her husband had five children. When her family ran out of food during the hard times, she came to our house to ask for work. My aunt would let her sweep our yard and then give her rice and lentils to take home. One time she became more and more emaciated despite the help. It turned out that after cooking the food, she was feeding her husband and children but not herself.
When my aunt learned of the problem, she made the woman sit in her bedroom – the most private place in her house – and made her eat each time before she left. There was reason for the secrecy: The woman was having a meal without first feeding her hungry loved ones, and that, in the eyes of people, would be unbecoming of a mother and wife.
It took me awhile as a young boy to catch on to the significance of these surreptitious acts. My aunt did not want to hurt the dignity of this woman – she was not a beggar. Her husband just did not earn enough in the wanting seasons. She was desperate, but she would rather work than ask for charity. Still, there was only so much work.
Unfortunately, she represents a vast number of impoverished yet dignified souls around the globe.
Decades have gone by since my boyhood experience, and poverty is still a part of rural life. What has changed, however, is the beginning of hope for the underprivileged and the awareness of the value of their labor.
Many poor families in our area have improved their lives with microloans. Among other endeavors, they have bought and raised chickens, ducks, goats and cows. Then they have sold them or their products and with the income have built livable houses. They are also feeding and clothing their children better than before.
You know that microfinance is working when you hear complaints about the shortage of cheap labor. Even my older brother, a novelist, who always extends a helping hand to the unfortunate when he has the means, complained to me recently. "You can't get domestic help anymore," he said, "so housekeeping is getting harder for us. Village women prefer to do this and that nowadays rather than work as maids."
What he means is that these poor women are making a living as small entrepreneurs. Without the microloans, they would have as meager an existence as they had in the past. The programs have lifted the needy without curtailing their self-respect and have given them a measure of independence.
Microcredit is used now all over the world, including in America and Europe. A developing world idea from Muhammad Yunus of Bangladesh and his Grameen Bank has been accepted in the first world. (Mr. Yunus received the 2006 Nobel Peace Prize for his pioneering work.) That's the way it should be: sharing ideas and skills to benefit humanity. The West, too, should understand that it has things to learn from the developing world.
Most heartening is that Mr. Yunus and others have inspired young torchbearers to make the world a better place. For example, Will Radke, an Austin College senior, with the help of the Austin College community, has launched a microloan entity, Global Outreach Change. GO Change helps West African villagers through Tostan, a Senegal-based community empowerment organization.
Microfinance is not a panacea for all the social ills, but it surely gives the impoverished a start for a better life.
Fazlur Rahman is an oncologist and an education advocate from San Angelo, Texas. He is also a trustee of Austin College and a member of its Leadership Award Advisory Committee. His e-mail address is frahman@wtmedical.com.

Micro-credit shouldn't be discounted as an option. We do need to have that type of program. On the other hand, we shouldn't stop with only that option. One of the biggest problems with poverty is that if corrupt leadership in the developing world (and in the developed world, for that matter) isn't tackled, the problem will persist. All of the predatory leaders out there make the best efforts to combat poverty look a shambles. Whether its Robert Mugabe in Zimbabwe watching his people starve while he (likely) salts money away in Swiss bank accounts or the junta in Burma profiting from the various offshore oil projects while they violently suppress dissent and let their people live in pretty miserable conditions, they're the biggest obstacle to altering the lamentable state of the world. The problem is how one deals with these people without repeating the mistakes of colonialism and re-establishing "the white man's burden".

It amazes me that with our sick uber-capitalism that a productive tool for people to live more decently that isn't a be-all, cure-all is denigrated. Please.

Microloan programs and credit unions at their best are cooperative in nature. Cooperatives give people a real-world example and opportunity to show "another world is possible".

How many of you belong to a credit union, have worked in a leadership position? Huh? I have. Youth credit unions have been educating youth about finances and the problems in the economy vs. the let's make a bunch of young entreprenuers not connected to the community.

As misinformed, undereducated as so many people are about real economics, it still amazes me that people think that when the shit hits the fan, people who haven't learned how to work cooperatively will presto-whamo do so.

Diverse cooperative efforts may not be The Answer, but they sure are part of the solution. And yes, in addition to letting a thousand flowers bloom, we do have to wrest power from the greedheads.

Paul-- You would agree with Shakespeare: "neither a borrower nor a lender be." And Proverbs 22:7 "the borrower is servant to the lender." Okay,so what if it were interest free? Islam considers it a sin to charge interest for a loan. Or perhaps someone could just give them the money.
Is it cultural arrogance to want people to have enough to see to their basic needs and aspirations, or is it cultural arrogance to suppose them to be happy for not having a pot to piss in?
A lot of the trouble in the developing world is political, as it is everywhere, but they have a special burden placed on them by the developed world; economic colonialism in the form of exploitation of resources, burdensome loan repayment plans, and strict privatization requirements. All these violate their sovereignty. Microloans are based in communities, not major banking institutions, which would certainly ruin the program for the sake of their own profitability.
endCapitalism--socialism is the best tool to fight egregious wealth; capitalism still works fastest on poverty, but strong democratic regulation is necessary to distribute the wealth equitably; hence, socialism ultimately matches up best with democracy, not capitalism, in order to create the most just society.

The countries that have actually taken major steps away from poverty--most in East Asia--didn't do so through micro-credit. They did so by states cultivating major industries. This is the form of poverty eradication that works. It is unthinkable in the halls of the world bank--one more reason to just get rid of that institution.
For an alternative perspective on microcredit, see http://feministreview.blogspot.com/2007/10/whats-wrong-with-microfinance.html

Best tool to fight poverty is socialism.

Per capita income is practically a meaningless statistic. You need to convert the currency, and adjust for cost of real estate.

Throughout much of the US, many professions pay an annual salary only 1/6th the cost of a median home. These professions may require advanced education, skills, etc.

The bottom line is something like the happiness index (Google on Bhutan). Labelling traditional people, who may own their land and enjoy more self-determination than we do in the west is a form of cultural arrogance.

As for lacking potable water, that is probably a political problem more than an economic problem. Societies ordinarily reach carrying capacities relative to resources in a given region (barring natural disaster, drought, etc.). More likely the case in the 20th century, though, they've been pushed into marginal land as refugees from some conflict. They need money less than they need title free and clear to productive land.

No the world bank only wants to do big projects that pave the way for multinationals to exploit resources. The microloans, if done right, as Mr. Yunus spelled out in the article above, can create a merchant class in impoverished areas. I like Tim Wright's post and Maxhemust's post at the beginning. For these areas of the world, where the per capita income is $1/day or less and potable water is a luxury, we need to do the basics first. I also endorse Heifer International, have donated in the past and will continue to do so in the future. My only reservation about them is whether it is wise to offer rabbits, which could escape into the wild and cause real harm to areas where farming is marginal.

It would be nice if the World Bank was really committed to ending poverty. My sense is that it is not. For another approach to a finance model for village women that does NOT depend upon the largesse of those who are already wealthy, watch You Tube - Marcia Odell's Presentation at Paris Uplift Academy Workshop. Literacy education, learning simple banking to which all members of the group regularly contribute their own funds, leading to increased self-esteem and much more.

After many years working in international development, I do support micro-credit programs for the poor. However, as usually implemented, they often do not impact the poorest, who need relief before being able to enter into even a very small economic venture. Many staff of agencies implementing micro-credit are frustrated with the requirement of first being a bank with low financial risk and being a development agency second.

In contrast, the approach of Heifer International, Sauti Moja, and several other agencies is to 'give' livestock, and sometimes start up supplies, to the poorest households, who make payment by 'passing on' female offspring to the next most-needy household in the community. Other agencies facilitate the organization of community members into accumulated savings and credit associations, and still others have supported community-wide production and consumer cooperatives, which can transform communities without dependence on external, for profit institutions. Unfortunately, too many agencies are opting for a "micro-credit only" approach, and in so doing, are withdrawing support for alternative, and I think better, approaches to poverty alleviation.

Think about this algorithim carefully.

1) Four people are living subsistence lifestyles. In our arrogance we call it "poverty" -- but they are traditional, may even own their own land.

2) Two of them decide to take out loans to increase their business. It may actually help them out. But it puts the other two at a relative disadvantage in that local marketplace. So they're basically forced to borrow as well.

3) Soon lots of people are borrowing. Things might look good, but prices begin to go up relative to higher income. Consumption goes up too, as do expectations. Gone is the subsistence economy, enter the consumption economy.

4) Now they all owe something to "distant economics." Read up on the absentee landlord problem that faced Europe a century ago. Today in the US we face absentee-owned Big Boxes moving in everywhere, displacing local economics.

A microloan is basically how we got into this mess ourselves, not much more than a century ago. The size and interest rate of the loan keeps creeping up, real ownership of equity keeps going down.

I remain unconvinced that it's not a form of creeping economic servitude and further displacement of traditional living for those who'd like to remain so.

Microcredit is a great idea. There are always assholes who will pervert anything, but overall, microloans helps the poor.

For a great way that we can each (yup, you too!) provide microloans, check out http://kiva.org/. You can make a difference.

Anyone see that special on micro-credit (was like 60 Minutes or something) in Mexico where the young men that started the (now largest) micro-credit firm in that country was handing out small loans at 100% interest rates?

Sounds like a wonderful idea.

Not!

And now those two young entrepreneurs are now millionaires. Wonder who they made their millions from? :(

There are different sorts of poverty. Being displaced from title to real estate apparently predicates most all of them. The best way to solve poverty is to give title to arable/fertile or otherwise productive land outright to the world's poor. Not to further render them in debt to the northern hemisphere and its banker class.

It seems at face value that microloans aren't a bad thing, and my wife has funded a few of them. But I believe they're just a foot in the door so to speak for full-up usury, dependency, subservience to distant economics, put undue speculative pressure on people, the whole dynamic that all but ruined the middle-class in North America. Furthermore, our consumption patterns aren't something we need to export either.

We already own trillions in public assets but we aren't getting any dividends from their exploitation because we haven't been issued stock in them.

Lending creates a subservient culture. When everyone around you has no problem going in way, way over his heads -- then you have inflated cost of living, 2-3 incomes required per household, the whole works.

We have a lot more material things than the developing world. But do we have more autonomy? More time with our families? More equity on the property we "own"? I don't think so. The whole concept of lending, especially to non-local entities, is a form of economic subservience.

I always thought that micro-credit was a good idea.

I'm slowly becoming quite disenchanted with the idea of loans of any type, including this sort. It's a form of indentured servitude to distant economies, a sort of market-driven subservience that wrecked the concept of a US middle-class.

Here's a simple example. You've got 10 small business people (vegetable growers who are street vendors) in a developing world town. They're living close to subsistence (enough to live on, they are not trying to work more hours, accumulate more than they need, etc.) Let's say that some of them get a microloan. They're able to increase their business. Those who do not likewise take on a loan, to get the same advantage, are at a disadvantage. Indeed, whoever borrows least (submitting himself to the distant economy) faces a disadvantage in relation to whoever wishes to go in the furthest over his head.

To hell with indebtedness of any sort. It's demeaning. And it has only driven the cost of housing into the stratosphere in the US.

We the People Incorporated would give each American stock in and dividends from our public resources. Every man a king!

Add time dollars and time banks to the mix. Then we will, or can, recycle our skills and knowledge with minimum waste.

Microcredit is fine in theory, but if the for profit lenders get involved, it's just another tool to exploit the poor.

The answer in the industrialized world is credit unions that are in reality non profit banks. If you do business with a bank, change to a credit union as soon as possible

Microcredit is a great tool for fighting poverty - but not necessarily "the best". Interest should never be charged on micro loans. That just perpetuates the sickening trend of the rich making money off the labours of the poor.

Lots of the poorest nations have been exploited and robbed for centuries by richer nations. There should be some major reparations and payback. We who have plenty should want to help those who have nothing get set up and comfortable, out of the love in our hearts and the universal desire to be useful and to see peace on earth.

Another great way of fighting poverty is the approach taken by the people at heifer.org where for 20 or 30 dollars donors can give a flock of chicks or a hive of bees to people in 3rd world countries.

http://www.heifer.org

We will end poverty in this generation. With all the money that was poured into the demonic military industrial complex pork barrels in the last few years huge strides in that direction could have been made.

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"The developed nations of the world cannot remain secure islands of prosperity in a seething sea of poverty. The storm is rising against the privileged minority of the earth, from which there is no shelter in isolation and armament. The storm will not abate until a just distribution of the fruits of the earth enables men everywhere to live in dignity and human decency."
Martin Luther King, Jr

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"Without sharing there can be no justice;
without justice there can be no peace;
without peace there can be no future."
The World Teacher

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"Only a few, here and there, really grasp the vision of the future and realise what is going on, seeing truly the beauty of the emerging Plan...
"...mankind [will advance] into a civilization and a state of consciousness in which right human relations and worldwide cooperation for the good of all will be the
universal keynote." The Tibetan

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Don't miss:

The War On Democracy by John Pilger 1 hr 34 min
http://video.google.com/videoplay?docid=-3739500579629840148

It's John Pilger's first film for cinema