We're not exactly sure why we didn't get the invitation to this party Steve Clemons details at the Huffington Post:
Last night, Washington's political stars turned out to pay homage to the banker who started in 1976 lending $27 to 42 people in one village in Bangladesh.Muhammad Yunus and many of his colleagues from the Grameen Bank were feted at an extraordinary reception and dinner gathering -- on a Sunday night -- at the Willard Hotel in Washington and hosted by the United Nations Foundation.
Among the guests were former President Bill Clinton and Senator Hillary Rodham Clinton, Congressman and Mrs. Tom Udall, Senator and Mrs. Paul Sarbanes, Pew Research executive and former Washington Post "Outlook" Editor Jodie Allen, Ted Turner and his companion Kathy Leach, Bruce and Hattie Babbitt, former Senator and UN Foundation President Timothy & Wren Wirth, former State Department Legal Adviser William Howard Taft IV, former Senator Donald Riegle, Ashoka founder William Dreyton, Kathy Bushkin, Kenneth Adelman, John Cochran, Diane Rehm, John Henry and Ann Crittendon, and many others.
A Grameen Gala and Ted Turner's Birthday [Huffington Post]
Posted by call me crazy , Nov 21, 2006 11:45AM
Can anyone explain to me the difference between microlending and those check cashing places? They are both short term loans for small amounts at exhorbitant rates. One gets a nobel peace prize and the other is considered usury.
Posted by John Carney , Nov 21, 2006 12:08PM
Glad to see someone is catching on.
Posted by , Nov 21, 2006 1:29PM
Citizens of the US have other options besides check cashing places. US citizens can walk in and get a $5,000 loan at any streetcorner neighborhood bank in about 20 minutes just because we want the cash. Microlending is for those who have zero access to banking or credit, who can't afford to purchase $20 US in farm equipment to feed their family. The high rates are due to the lack of any liquid retail banking organization who will take the risk to back those loans. Of course, in the absence of microfinance loans the black market always prevails... the equivalent of the check cashing place in Bangladesh is the local village money lender - whose rates are in fact exorbitant, and who will resort to violence to collect on the loan.
Posted by Daniel , Nov 21, 2006 3:01PM
You just cited some differences between the US and a third world country--not between micro-lending and one of the check-cashing places.
I don't really think there's anything that wrong with high rates as they do in fact reflect the risk taken in most cases. That said, I agree with the first person who commented here: it seems kind of odd that two different organizations doing pretty much the same thing will have widely different moral judgements made about them.
The praise for micro-lending and the type of people who support it most fervently seem to be able to see the difference between the US and a third world country--but only in one respect.
Micro-lending is seen as somehow being able to bridge that gap they always cite by some means and in some way without the need to change the things that actually have the most bearing--things like a proper constitution with checks and balances, a workable political structure, private property rights and a rule of law (not of whims, either or one dictator or a million corrupt policemen) and so on.
Until many of the above things change in the third world, and the vast majority of people respect abstract concepts like rights, the rule of law, the validity of contracts and so on, real change in the developing countries will not change.
Micro-lending is the panacea of the day just like democracy is all the third world needed for the past 20 years. Somehow these poor people can rise up without a broader philosophical and then political change taking place. At least that's the hope (as far as I can tell).
My forecast: even if micro-lending does work on a micro-basis (still up in the air) there is zero chance of macro-changes in a nation taking place as a result of its practice. The hype is just that: hype.
I'm very much for helping the poor in these undeveloped nations, but I think the hype around micro-lending actually does more harm than good. It makes the hard choices and long-term struggle easier to put off or forget about.
No wonder the UN and politicians and most of the media loves it.
Posted by H. Raines , Nov 21, 2006 7:35PM
Monkey see, monkey do.
Posted by Anonymo Jones , Nov 21, 2006 8:39PM
For God's sake, go read about microcredit before you start spouting off. www.grameen-info.com is a good place to start.
Posted by , Nov 22, 2006 12:11AM
why is dealbreaker so adamant about this issue above all others? is john carney positioning himself as "contrarian" for the f of it?
Posted by Carney Fan , Nov 22, 2006 10:49AM
The anticipation is killing me. Mr. Carney, please hurry with your alternative proposal on financing enterprises in developing countries. I am sure you have a great idea that will provide access to financing for small scale entrepreneurs. Of course you have seen firsthand the impact this can have on rural economies, and I am sure you are well read in the results of trade financing for coffee co-ops in central america and africa. Please stop holding out on us.
Posted by John Carney , Nov 22, 2006 11:08AM
Sorry, my fan, I have no solutions to anything. In fact, I'm skeptical about the idea that people should have solutions.
Posted by Carney Fan , Nov 22, 2006 11:44AM
I’m skeptical that people without ideas should throw garbage at those who actually have a solution. But then again, maybe you are right. Let the coffee co-ops get screwed by 30-40% financing by middleman without the chance to make capital improvements. Our Starbucks will still cost the same, right? Forget Accion and Grameen Bank. At least we will have something inflammatory to write about so we can generate more clicks to the CEO of the Year contest or invite people to invest in completely legitimate indie film ventures.
Posted by Eff the Left , Nov 26, 2006 4:31PM
Looks as if Yunus and his liberal advocates in the West are at least somewhat responsible for this disturbing story:
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Baby auctioned for $351 to pay debts (11/22/06)
POOR parents of a newborn child in southern Bangladesh auctioned off their baby to repay a loan from a local micro-credit bank.
The auction took place in the impoverished hamlet of Farhadabad in Fatikchari sub-district, 290km south of the capital, Dhaka, over the weekend, said the daily, Ittefaq.
The announcement of the sale attracted more than a dozen bidders, many coming from outside the district.
The newspaper, quoting local reporters, said the baby was sold at a price of 20,000 taka ($351).
Chikon Mia and Humaira Khatoon, parents of the baby, said they already had two children who they were barely able to feed.
“We do not have enough money to feed the two children. How can I possibly feed a third one?” Ms Khatoon asked.
The landless family fell into hard times and took out a small loan last year to tide them over an economic crisis. But the farming couple failed to repay the loan in time and plunged into deeper financial problems.
After the couple's request to the bank to reschedule the unpaid loan was turned down, they put the baby up for auction.
Nearly 40 per cent of Bangladesh's 130 million people live under the United Nation's designated poverty line.
http://www.news.com.au/dailytelegraph/story/0,22049,20800717-5001028,00.html
Maybe the parents should approach Angelina Jolie, Brad Pitt, Madonna, and other Hollywood celebrities, who love to be seen adopting poor brown babies from the third world.