In today society we have a huge problem with poverty. 1.4 Billion people of a 6 Billion world population are living in extreme poverty with less than 1.25 US-Dollar per day. (Definition of World Bank in 2008 extreme poverty: less than 1.25 US $ per day.) Especially India is effected by poverty, because India is the country with the most extremely poor people in the world. [1] 456 Million Indians are poor, so in India are living one third of all poor people in the world. The results are an extremely high death rate of young children[2] or the slums like we have seen them in the movie Slumdog Millionaire. Furthermore there are a lot of street children in the cities of India. We have already heard a presentation about street children. But how can the world solve these problems? Giving development aids to the poor countries could defeat poverty.
A possible solution could become micro-credits. Micro-credits are small credits which are lent to the poorest people who don’t even have a security. With the credits poor people are able to build their own business. In most cases poor people just need a small start capital to earn their money but they have to lend their money at a local extortioner. The problem is that this local extortioner demand extraordinary high interests. There is the example of a basketry woman in Bangladesh, who had a really hard job to food herself and her child. She had no money to buy herself the bamboo for the baskets. As a result she had to lend money from a local extortioner. The interests are so high that she is on the one side totally dependent on the extortioner and on the other side she isn’t able to buy something else then some food. This is a typical case in countries like India. A micro-credit could help the woman to get out of poverty. She would be able to buy bamboo by herself, without paying extraordinary high interests. As a result she could send her children to school and so on. Micro-credit-organizations like the Grameen Bank are trying to give this poor people a chance. But they don’t just give them the money to invest, moreover they teach the poor people to build their own business or to improve their living conditions. A typical credit user has her own brick-house, sanitary latrine, agriculture or her own business,3 regulary meals each day and the children reach high level of education. Moreover she is proud, that she managed it by her own power. The payback rate of the Grameen Bank is incredible high with 98 percent. Noticeable is the high percentage of women credit users. The Grameen Bank lends credits to nearly only women(97%). They fight harder to get out of poverty than a man would do it. Furthermore women first care for their family and than for themselves. Men in general first care for themselves and then for their family. The success especially of the Grameen Bank is high. In 10 years on third of the 8 Million credit users managed it to get out of poverty. Yet another third is shortly before leaving the poverty.
All in all I think micro-credits could be a very effective instrument against poverty. But it is important that the social aspect of fighting the poverty should be the most important aspect. Although the business should be cost covering and the money should be economical used. The goal of maximizing profit should never be front-ranking.
