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[NAEEM MOHAIEMEN]

Another response to Taj Hashmi

http://www.drishtipat.org/blog/2006/10/16/should-yunus-be-in-politics/#comment-36070

I had said my piece earlier in this thread and I am
loathe to get pulled into arguments without substance,
but Taj Hashmi’s uninformed charges require rebutting.

Mr. Hashmi claims:
Most unfortunately, contrary to what Dr Yunus has been
telling us, the poorest of the poor simply do not /
cannot get Grameen loan as they simply cannot service
any loan at 30%, payable in 52 instalments in one
year.

He is wrong. Grameen Bank’s top
[http://www.grameen-info.org/bank/GBGlance.htm]
interest rate is 20% (for income generating loans), 8%
for housing loans, 5% for student loans, and interest
free loans for beggers. In addition, Grameen’s loans
are [ http://www.gdrc.org/icm/grameen-article4.html]
simple interest loans as opposed to compound interest
loans handed out by commercial
banks. That makes a HUGE difference. You pay off
principal first on a Grameen loan - try telling your
mortgage company in the US that you would like to pay
off principal before interest and see if they don’t
laugh at you. The effective interest rate of a Grameen
loan, because of simple interest calculation, is LOWER
than commercial banks in Bangladesh.

Grameen Bank is not a charity. It is a commercially
viable lending business that has as its aim the
alleviation of poverty. It has successfully married a
business model to an anti-poverty model - and that is
its major innovation. 

http://www.southasianmedia.net/cnn.cfm?id=332525&category=Economy&Country=BANGLADESH


Results have been very positive - 75% of Grameen
borrowers have improved their economic status while
48% have risen above the poverty line. Those are
impressive statistics.

I did not see anything in the comments from Mr. Hashmi
that offered a better alternative. Hyperbole is not a
valid means of criticism. His arguments about
microcredit being an old concept is a non-sequitor.
Dr. Yunus did not invent lending to poor people - he
commercialized it and made it viable. Its not that
Grameen Bank lends to the poor - its that it does it
on such a massive scale. I have given money to people
(gave my daugther 25 cents the other day) out of my
pocket, that does not make me a microcredit pioneer.
Not understanding the Grameen model and then trying to
criticize it is kind of naive.

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