Free Banker to the Poor Essay Sample
The Yunus project mainly targets women. Having witnessed the kind of struggles that women went through in the neighborhood, Professor Yunus sought to start his project with women. As a matter of fact, the project was faced with a myriad of problems. For instance, the customs, banking institutions and religious zealots stood as obstacles towards the realization of the project. The Grameen Project has been operational since 1976 to date. At the moment, the project operates in more than 36 nations worldwide. The bank is owned by the poor borrowers who cannot secure credit with the banks. Women who join the project mainly operate small enterprises that provide their daily needs. They secure credit from the bank and repay at no interest on selling their products. The story of Sufia Begum touched Professor Yunus. She made bamboo stools. The bamboo had to be bought for $22 cents borrowed from a moneylender at 10% per week. The profit of $2 cents per stool could not feed her let alone cloth and house her family. The fact that if she got better credit could transform her life formed the foundation for starting the Grameen bank.
Comparison between the Grameen Project and IMF reveal a horde of contrasts and ironic similarities. The fact that IMF is concerned with issuing credit to the developing world may be seen as a similarity between it and the Grameen Project. The focus of the two projects is to alleviate poverty. However, the differences are great. The Grameen Project is based on the concept of micro-credit issue. The contrast lies in the manner in which the two banks operate. The IMF can only issue credit after ascertaining the projects to be covered. This is done after lengthy consultations by professionals who have no real encounter of the situation on the ground besides the book knowledge. Some advantages of IMF include the provision of funds for development projects in developing nations as well as the spread of expertise from knowledgeable and experienced world scholars in the developing nations. However, disadvantages are immense. For instance, the projects initiated through such are funds are virtually controlled by the IMF without involving the local people.
Professor Yunus gave criticisms of the multinational donors with the experience in the Island of Negros Occidental in Philippines. One time when hunger was terribly bad, a project was started in 1988 to alter the situation. Dr Cecile del Catillo had contacted IFAD which sent four missions to study the island. There was never a quick response until 1996 when an agreement was signed for $37 million to be released. Bureaucracy set in any it took many more years before the money got to the poor people. Another criticism of the donor organizations given is the manner in which a lender officer works hard to obtain huge money disbursement. Yunus gives an account of an officer who went to the level of bribing the government officials for the approval of a $5 million project. Yunus also gives a criticism of the manner in which the donor funds were spent in Bangladesh. A research showed that of the $30 billion released within six years, only 25 percent was obtained in Bangladesh in cash form. The rest was used in purchase of equipment that never benefited the poor as well as in paying the experts and consultants. Worse still, the money that reached Bangladesh ended in the hands of the elite rich; the poor never got a glimpse of it.
From the foregoing, the Grameen model seems much more likely to help in the war against poverty in the developing world. The working of the Grameen Project is purely based on the conditions of the poor people who need urgent assistance. It is suited for the poor as they can easily access credit without struggle. The Bank also knows their plight just too well. On the other hand, the IMF project can fit the developed world. Majority of the people in these nations are not poor and they are elite. Similarly, they can access credit from the banks which issue these funds. When the issue of bureaucracy sets in people can still survive as they have other means of livelihood. From the foregoing, it is evident that the Grameen project is of such great relevance for the poor people.