Ask people in the development sector what they associate with Bangladesh and they'll likely answer 'natural disasters and micro-credit'. Particularly since Mohammad Yunus was awarded the 2006 Nobel Peace Prize for his Grameen Bank. Bangladesh has a remarkable development sector. I have never seen or heard of so many micro-credit institutions. There are literally hundreds and hundreds.
Nor have I ever seen or heard of such enormous institutions. Two of the biggest are Grameen and BRAC. The are now not merely NGOs running development projects and dependent on foreign funding. These institutions run multiple businesses to generate their income. You would be hard pressed not to notice the advertising hoardings everywhere. To change money I visited BRAC's own commercial bank. To use my mobile I connected to Grameen's mobile network. To shop for souvenirs I visited BRAC's 4 storey shopping emporium of handcrafted goods. And this is just the tip of the iceberg. These two institutions alone have many more businesses. Its a bizarre situation compared to many countries where local organisations struggle to survive simply because they are donor dependent and struggle to raise income to cover the costs donors won't.
But the much lauded micro-credit sector has recently come under more intense scrutiny and criticism. Cyclone Sidr which hit Bangladesh in December 2007, has had a significant impact on micro-credit institutions. In the initial weeks, micro-credit institutions continued to collect payments and seize property and liquidate it if payments were overdue. Understandably, this sparked public outrage. The caretaker government responded by barring any micro-credit institution collecting payments for 3 months. This has panicked the micro-credit institutions. They have so much capital invested in the cyclone affected region that they risk going under and so many have gone into a hibernated state.
Some people also remarked that there are so many micro-credit providers, people are using them like credit cards and personal loans – taking one out to pay off another. Others questioned why, if micro-credit and rural development initiatives are effective, was rural to urban migration still so prolific - why are there still so many children and people coming to the live desitute on the streets of the country's cities. UNHABITAT estimate that 500,000 people come to the Dhaka city every year.
Nor have I ever seen or heard of such enormous institutions. Two of the biggest are Grameen and BRAC. The are now not merely NGOs running development projects and dependent on foreign funding. These institutions run multiple businesses to generate their income. You would be hard pressed not to notice the advertising hoardings everywhere. To change money I visited BRAC's own commercial bank. To use my mobile I connected to Grameen's mobile network. To shop for souvenirs I visited BRAC's 4 storey shopping emporium of handcrafted goods. And this is just the tip of the iceberg. These two institutions alone have many more businesses. Its a bizarre situation compared to many countries where local organisations struggle to survive simply because they are donor dependent and struggle to raise income to cover the costs donors won't.
But the much lauded micro-credit sector has recently come under more intense scrutiny and criticism. Cyclone Sidr which hit Bangladesh in December 2007, has had a significant impact on micro-credit institutions. In the initial weeks, micro-credit institutions continued to collect payments and seize property and liquidate it if payments were overdue. Understandably, this sparked public outrage. The caretaker government responded by barring any micro-credit institution collecting payments for 3 months. This has panicked the micro-credit institutions. They have so much capital invested in the cyclone affected region that they risk going under and so many have gone into a hibernated state.
Some people also remarked that there are so many micro-credit providers, people are using them like credit cards and personal loans – taking one out to pay off another. Others questioned why, if micro-credit and rural development initiatives are effective, was rural to urban migration still so prolific - why are there still so many children and people coming to the live desitute on the streets of the country's cities. UNHABITAT estimate that 500,000 people come to the Dhaka city every year.
No comments:
Post a Comment