Microfinance, the big dilemma
By Mattia Michielan

Nobel Peace prize Muhammad Yunus is recently on the news for a $100 million scam and this is only the latest attack to microfinance institutions. How to forget the article published on October 2010 by Outlook that renamed this economical strategy microusury.

Does microfinance really works with poor?

Like Yunus claims in his bestsellers book 'Banker of the poor' the idea of microfinance came to him when one day, after having taught economy to his students and discussing about billion of dollars economical strategy, he discover that a woman in the local village was getting $0.5 lawns from money lenders to buy bamboo to work and prepare some handcraft. In the night the same woman was selling his product to the same moneylender for finally have a total income of the equivalent of two pens of dollar. That woman was getting only the 4 percent of the total sum.

I wanted to introduction to start a reflection because the article on Outlook claims that sometime the microfinance institution ask an average of 26 percent of interest, sometime happened also the 40 percent. This is an astonishing percentage, almost the half of what poor people earn after struggling have to go back to the institution.
Coming back to the touchy moment when Yunus got enlightened the moneylenders were asking an interest of 96 percent then microfinance is still giving a bigger income to the poor.

In Venice we said that money are good slave but bad owners. Many of the poor that usually ask for money lawn are not educated or are not able to manage the money they get. Multinational like Monsanto deceives farmers asking them to buy its most expensive and sterile seeds because the farmers will use less chemicals and have a biggest yield. Many farmer asked to microfinance institutions lawns for this reason and when their entire crops was eaten by pests and the few seed were infertile they discover to have felt into the net of debt. A lot of farmers and other poor people sometime needs a financial guide more than financial support.    

Better concept of microfinance cames from website like myc4 or kiva where investors from western country can invest little sum of money. This money is used to help young entrepreneurs from poor country to start a business related with sustainable development. For the investors the same interest tax that banks offer is given, for young entrepreneurs is the manna from heaven. This is not only a way to fight poverty but also to fight the advent of multinationals investments by favoring a local economy. 

Yunus clams also that through microfinance is possible to fight and to put an end to poverty in the world. Microfinance is a good tampon to fight the spreading of poverty and to raise a lot of families from the poverty line but it is definitely not its solution. To solve poverty is necessary a planned development, better education that do not regards only schools but also civic education, and the abolition of all caste (in India), classes, political and religious belonging.

In one thing Yunus is totally right, everyone of us human being have the inner power to make a big change in ourselves, into our society, in our nation or in the all world.


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