Microcredit is the extension of small loans to people too poor to qualify for traditional bank loans. These very small loans allow the poor to develop their various businesses and trades. As a result people have the chance to bring themselves out of poverty.
Microcredit goes directly to the people who need it and instills a sense of pride that can sometimes be lost with traditional charity handouts. When money is used for microcredit, it is not used once but over and over again. When a loan is repaid with interest, the money generated is given to a new borrower. In time this creates a sustainable institution, which is not reliant on continuous donations.
The majority of microcredit borrowers are women because they have proven to be excellent at managing their businesses. Also, when a lady controls the finances the money she earns tends to go back into the home and to her children’s education.
Professor Muhammad Yunus was the first person to lend money to poor people in Bangladesh. He saw that a very small amount of money could dramatically change the direction of someone’s life. He went on to establish The Grameen Bank, which currently serves over 7 million families.
In order to bring vulnerable people above the poverty line it is very important to address their health issues. Experience has shown that a significant number of people remain under the poverty line, despite their continuous efforts. After having succeeded to cross the poverty line, in many cases, a health problem for the incumbent or a family member pushes them back to poverty. Grameen Bank realized that without improvements in the health care facilities serving the rural poor, a difficulty would remain in ensuring people kept permanently above the poverty line.
In 2005, Prof. Muhammad Yunus went to visit the Aravind Eye Hospital in Madurai, India. He was so impressed by the Aravind model and their contribution in eradicating blindness. On his visit to Aravind, Prof. Yunus became fully convinced that it was possible to provide affordable eye care services to the most vulnerable segment of the population in Bangladesh.
When we traveled to Bangladesh to learn more about microcredit, Professor Yunus spoke to us about the incredible problem of cataracts in Bangladesh and we thought it would be a great cause to support. With 1.6 million people having been forced into premature blindness, we believed it was about time that a facility was available to help tackle the colossal problem. Much to our surprise, Prof. Yunus and Grameen Bank won the Nobel Peace Prize in 2006 and as part of the celebrations we decided to sell a CD/DVD package to help raise funds.
Cataracts can be cured with a simple operation which costs as little as $25. This operation changes the direction of someone’s life, allowing them to continue using microcredit, support their families and keep their children in education.