Bangladesh bank offers loans to US poor

[mawilson 2,133]

Bangladesh’s Grameen Bank has made its first loans in New York in an attempt to bring

its pioneering microfinance techniques to the tens of millions of people in the world’s

richest country who have no bank account.

The bank’s entry into the US, its first in a developed market, comes as mainstream banks’

credibility has been hit by the mortgage meltdown and many people are turning to fringe

financial institutions offering loans at exorbitant interest rates.

“Now is a good time because of . . . the subprime crisis and that highlights the issue that

the financial system is not perfect,” Muhammad Yunus, the bank’s Nobel Prize-winning

founder, told the Financial Times.

Grameen has lent $50,000 in the past month to groups of immigrant women in Jackson

Heights in New York’s borough of Queens. During the next five years, it plans to offer

$176m in loans within New York city, and then expand to the rest of the US.

In Bangladesh, Grameen lends to poor women seeking to start small enterprises who

cannot borrow from banks because they do not have accounts or a high enough credit

rating. The bank, which started with $27 in loans Mr Yunus made to 42 women in

Bangladesh in 1976, has now made more than $6.5bn in loans to 7m people in the country.

In the US, about 28m people have no bank accounts and 44.7m have only limited access

to financial institutions. People often do not hold bank accounts because they have had

credit problems, have no access to a local branch or they distrust the mainstream

financial system, said Jonathan Morduch, a microfinance expert at New York University.

Some microfinance experts doubt that Grameen could make an impact in the US where

credit is widely available, and businesses and tax systems are much trickier to navigate

than in developing countries.

After beginning with small loans to micro-entrepreneurs, Grameen plans to expand into

other businesses such as remittances and mortgages.

Source

[simple_male 1]

Hey Mawilson, Thanks for the thread. One thing: Bangladesh's Central Bank is called Bangladesh Bank and Dr. Yunus' Bank is Grameen Bank. When I saw the title, I thought Bangladesh Bank, not Grameen Bank is offering loans to US poor. I appreciate your post.

Bangladesh’s Grameen Bank has made its first loans in New York in an attempt to bring

its pioneering microfinance techniques to the tens of millions of people in the world’s

richest country who have no bank account.

The bank’s entry into the US, its first in a developed market, comes as mainstream banks’

credibility has been hit by the mortgage meltdown and many people are turning to fringe

financial institutions offering loans at exorbitant interest rates.

“Now is a good time because of . . . the subprime crisis and that highlights the issue that

the financial system is not perfect,” Muhammad Yunus, the bank’s Nobel Prize-winning

founder, told the Financial Times.

Grameen has lent $50,000 in the past month to groups of immigrant women in Jackson

Heights in New York’s borough of Queens. During the next five years, it plans to offer

$176m in loans within New York city, and then expand to the rest of the US.

In Bangladesh, Grameen lends to poor women seeking to start small enterprises who

cannot borrow from banks because they do not have accounts or a high enough credit

rating. The bank, which started with $27 in loans Mr Yunus made to 42 women in

Bangladesh in 1976, has now made more than $6.5bn in loans to 7m people in the country.

In the US, about 28m people have no bank accounts and 44.7m have only limited access

to financial institutions. People often do not hold bank accounts because they have had

credit problems, have no access to a local branch or they distrust the mainstream

financial system, said Jonathan Morduch, a microfinance expert at New York University.

Some microfinance experts doubt that Grameen could make an impact in the US where

credit is widely available, and businesses and tax systems are much trickier to navigate

than in developing countries.

After beginning with small loans to micro-entrepreneurs, Grameen plans to expand into

other businesses such as remittances and mortgages.

Source

[junglee069 0]

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