‘Institutionalise microcredit’

NEW DELHI: Grameen Trust, a micro-credit programme which follows the Grameen Bank of Bangladesh’s approach to poverty alleviation, will be opening an office in Mumbai. This non-profit organisation will offer technical and financial support to various start-up programmes in India, Professor Muhammad Yunus, banker to the poor, Nobel laureate and chief architect of the Grameen Bank of Bangladesh said this to DNA on the sidelines of the Ficci-IMI special session.

“We are already working in states like Tamil Nadu, Karnataka, Uttar Pradesh and Andhra Pradesh and will soon begin work in Assam,” the chief architect of the Grameen Bank of Bangladesh said. Inspired by the Grameen model, in 1994, the Reserve Bank of India took an innovative step and allowed banks to open savings bank accounts for self-help groups followed by the programme of linkage of self-help groups with the commercial banks under the guidelines that NABARD had set.

The norms involved nurturing of groups and operating for about six to eight months before they really got linked to the bank.

While addressing the special session, Yunus said that there is a need for a separate stock market for socially-oriented companies. These exchanges should primarily list companies which would be doing social work.

Here investors can invest money in the company which is involved with the kind of social work the investor wants to do and put money into, the economist explained. Though it is a free market time, there is need for businesses to do good to people, Yunus stressed.

Another suggestion that the prize-winning economist came up with was that there should be a social MBA course for people who can be hired by companies which are not interested in making money but reaching social goals. Going a step further to promote the cause of social enterprises, he also said that authorities should try and set up the social business funds to help create more social business enterprise.

Underlining the importance of the micro-finance movement in addressing the issue of financial inclusion, Yunus said that he was in touch with policy makers to create a micro-credit bank law and to make microcredit mainstream financial institutions legalised, which is presently an NGO activity. “Legal framework is important to mobilise deposits for micro-credit,” Yunus said.

The economist reiterated that credit should be exercised as a human right. Though micro-credit has been slow to pick up in India, poverty should become a thing of the past and be kept in museums.

“We should be creating our own museums” by eradicating poverty wholly and completely, he said.