Microfinance - Grameen Bank under Threat

VSL meeting in a suburb of Accra, Ghana/Fjona Hill

Writing about development and humanitarian issues, I am well aware of the importance of microloans and how non-profit lenders and savings and loans associations can help change lives (see my recent post and article in the Economist on Village Savings and Loans Associations. Also, if you want a clear explanation of how microcredit works, see the excellent graphic at the end of this post).

So, I was alarmed reading this recent appeal from the global campaigning group Avaaz that the Grameen Bank is under threat.

The Grameen Bank is very different from traditional banks. They loan money to 8.4 million people, mostly women from the poorest villages in Bangladesh, so they can buy assets like cows or sewing machines and start earning money. These women borrowers also run the bank -- they are not only the majority shareholders, 9 out of 12 seats on the board are held by village women in saris.

I haven’t had time to verify Avaaz’s claims and I know that the Grameen Bank has come under criticism over the past few years for tax evasion. There were also accusations that microcredit can bring communities into debt from which they cannot escape and that the Grameen Bank was linked to exploitation and pressures on poor families to sell their belongings.  (That’s why I prefer the Village Savings and Loans model in which the money comes from the community itself.)

I don’t know what is behind the Bangladeshi government’s decision regarding the bank, but here is what Avaaz says:   “Prime Minister, Sheikh Hasina wants to end Grameen Bank as we know it.  She first stripped Dr. Yunus’ position as the bank’s managing director, and now just passed a law that would allow the government to bypass the people-elected board and handpick his successor. We fear that the government may use its newfound power to manipulate millions of members for votes in next year’s election.

“Grameen's downfall would be a disaster for Bangladesh and the larger microcredit movement that is working to improve lives across the globe.”  Avaaz is asking people to sign their urgent petition to PM Hasina.

Here is a very good graphic, which explains clearly the process of microloans and how microlending, if done correctly, can help millions of people around the world. The graphic is produced by CreditScore.net, a personal finance blog by a team of experts focusing on all things credit and debt related.

 

Child Marriages Blight Bangladesh

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Nargis who was forced to marry at 12

Bangladesh has one of the highest rates of child marriage in the world, with 20% of girls becoming wives before their 15th birthday, even though 18 is the minimum age allowed by law for a girl to marry and 21 for a boy.

Many young girls are made to give up their education to marry and raise families when they reach puberty because they are seen as a financial burden with less potential to contribute to the household income than a son. Arranging for a daughter to marry an older man can seem like a good way to secure her future and a younger bride can mean lower dowry payments for her parents.

Child brides drop out of school and are rarely allowed to work.  Often they become victims of domestic violence.  They lose their childhood completely. And with their bodies too young for child bearing, pregnancy results in serous health risks for both mother and child.

“I was 12 when child marriage shattered all my dreams,” says Nargis who is now 19.  “On the day itself I was frightened: again and again I felt fear, fear, fear. Once my grandmother and sister had gone, I had to go and live with my husband. I didn’t know him. That night I felt strange, and very scared.

“I feel very bad, because instead of going to school I live at my father-in-law's house and do all the household work. When I was at home I could share my feelings and emotions. Now that I’m married I don’t have any say and I have to abide by what my husband and my father and mother-in-law decide.

“Two years after my marriage, when I was 14, I gave birth to a baby boy, but there were complications after the birth. He survived for 16 days but then he died," Nargis says.

"It is the new kind of slavery," says Mirna Ming Ming Evora, country director for the NGO Plan International, a global children’s charity, focusing among other issues on early and forced marriages. "Here girls are a burden, they don't earn income in this culture,”  she says.

“Behind our parents’ decisions to marry girls young is poverty – extreme poverty. If our parents get a good offer, sometimes it is very difficult to change their minds,” explains Oli.

Oli is an amazing 12-year old boy, who is a member of a Plan’s children’s group in northern Dhaka, raising awareness of the impact of early and forced marriages on girls and society in general. 

They perform street dramas and step in directly when they hear a marriage is planned. “We go to see the parents and try to get them to stop the marriage,” Oli says. “We have tried this on many occasions - sometimes with success and sometimes we are not able to stop the marriage.” Plan staff in Bangladesh know of four child marriages that Oli’s club has directly prevented in his small district of the Bashentak slum alone.

In this short video of Oli explaining how boys can make a difference.
 

There are 25 children in Oli’s organisation and Plan has 60 similar clubs across the country. Plan has reached an estimated one million people with its anti-child marriage work while Oli himself has reached about 50,000.

Oli is one of  three children affected by child marriage - Oli, Poppy and Jemi - whose experiences is featured on Angus Crawford's Crossing Continents on Radio 4 today, Thursday 26 April, at 11:00 BST and again on Monday 30 April at 20:30 BST. You can listen online, download the podcast and browse the archive.

A TV documentary on child marriage will also be featured on BBC World News GMT: Fri 27th April 13:30 and Sat 28th April 11:30 and 23:30; and on BBC News Channel BST:  Sat 28th April 05:30, 14:30, 21:30 and Sun 29th April 03:30, 10:30, 22:30.

BBC team filming with Plan's children's group in Bashantek slum, Dhaka

 Sign Plan's petition to stop child marriage here.

Measuring women's empowerment

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Rina Begum, who participated in one of the SHOUHARDO women's empowerment programs in Bangladesh. Once prohibited from leaving her home without a male escort, Rina blossomed into a member of three school committees and the leader of an EKATA group that, among other things, stopped four child marriages.  EKATA groups are women's self-help groups formed as part of the SHOUHARDO project/ Credit: Akram Ali/CARE)

 I’ve read many inspiring stories about mothers’ achievements around Mother’s Day (celebrated last Sunday in the UK), but one particularly caught my attention. It is a story about the measurable impact of empowering women.

Many NGOs have shown the transformative ripple effects of women’s empowerment, but a recent report by the Institute of Development Studies actually measured it. 

In the poorest villages of Bangladesh, economists and nutrition experts were shocked at the results of a program designed to fight malnutrition and poverty among more than 2 million of the country’s poorest people.

Funded by USAID and implemented by CARE, the $126 million SHOUHARDO ("friendship" in Bangla) project included a wide array of interventions, from child feeding and sustainable agriculture to sanitation and climate change adaptation. But researchers discovered that another force had actually produced the greatest independent impact. The game-changer? Women’s empowerment.

Efforts to combat deeply entrenched disparities between women and men had reduced stunting (a measure of child malnutrition) even more than giving women and their children regular rations of wheat, vegetable oil and yellow split peas. 

These gender-equality efforts included promoting female entrepreneurship and supporting self-help groups where women could address taboo topics like early marriage, dowry and violence against women. Once reluctant to leave their homes, the women of SHOUHARDO started travelling to markets to buy and sell goods. Detailed surveys revealed that their influence over household decisions — from the use of savings to what foods to buy — increased too. At the same time, their children were growing healthier — and taller. This was empowerment you could measure with a yard stick.

This is a poster hanging in the room where Rina's EKATA group meets. It describes key elements of an empowered woman. The phrases, translated roughly from Bangla, include "able to speak anywhere with courage" and "participates in the general election process."/Credit: Akram Ali/CARE

“Women who participated in the empowerment interventions were getting better antenatal care, eating more nutritious food and getting more rest during pregnancy. They and their children also had better diets,” says Lisa Smith, a senior economist at TANGO International, the firm hired to evaluate the project.

The report’s results underscore why CARE and other NGOs believe that “greater gender equality is the key to fighting poverty, hunger and injustice around the world,” says Dr. Helene Gayle, CARE president and CEO.