[opiniojuris] Kristen Boon: Microcredit & Economic Recovery

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Posted by Kristen Boon:
Microcredit & Economic Recovery
http://www.opiniojuris.org/posts/1188880141.shtml


   Microcredit - providing small loans to individuals who would not
   normally qualify - is becoming tool of some consequence in economic
   reconstruction and disaster relief programs. The UN declared 2005 the
   year of micro-credit, and in 2006 Bangladeshi economist Muhammad Yunus
   and the Grameen micro-credit Bank he created won the Nobel Peace
   Prize. Recent reports such as this one on [1]Gaza and the West Bank in
   2007, demonstrate its growing appeal within multilateral institutions.
   Nonetheless, some are skeptical. The Economist for example expressed
   concern about lenders who dabble in disaster relief:
   "Not many microfinance institutions offer the services that people
   need most after a catastrophe: insurance, and access to their savings
   and to remittances from their families and friends. However, there is
   also a demand for income-generating assetsâfishing-nets, tools,
   bicycles, stocks for a small shop, and so onâand hence for microcredit
   to finance them."
   Nonetheless, microcredit is becoming a more common tool and is now
   being made available to populations such as women, returning refugees
   and internally displaced people. It may give traditional banks a run
   for their money. As the Economist summed up: "One lesson of the year
   of disaster relief is about the limits to what microfinance can
   achieve. But a more important one is the need for more of it."

References

   1. http://www.un.org/apps/news/story.asp?NewsID=23642&Cr=Palestin&Cr1=