Does Micor-finance Really help the Poor? (case in Bangladesh)

A comment written by me in Prothom-alo (1) Bangladesh News paper,13th march 2011) I don't want to go the politics conflict ( who can eliminate the poverty from Bangladesh?? and who cannot) I would like to mention some points about Micro-finance which are  following the methodology invented by Dr.younus (vision of Micor-finance,Md.waliul Baten,Copenhagen Business School (CBS)21.10.2009):

1. Micro-finance is update from micro-credit which involves insurance, savings and other facilities.

2. Only 7% of micro-finance able to rise above the poverty line (Dr.Quazi kholiquzzaman Ahamad,2006-2007)BBC News,27.01.11

3. More than 1,200 Micro-finance institutions whose interest rates vary from 20 percent to 51 percent, according to the MRA.(Bangladesh caps, 10.11.2010)

4. Apart from prostitution, Arms and Drugs is there any legal Business in this country (Bangladesh) that will give you profit at the rate of 21% (20.4)?(Award for trading dead- body, www.ali-mahmed.com,23.04.10)

5. Finance Minister AMA Muhit alleged that micro-finance institution could not help poverty alleviation. (Muhit unhappy over hight Micro-credit rates,BDnews 24.com,15.10.2.10)

6.Micro-credit 'death trap' for Bangladesh's poor.(BBC NEWS,03.11.2010)

7.Nobel -winning Micro-credit bank comes under scrutiny.(CNN.com,01.14.2011)

In my opinion Micro-finance could be helpful for the poor if we can reconstruct the Methodology of credit lending and repay the loan system(which means,consider the flexible time to borrowers, effective use of borrowed money) .High interest rate vary from  different borrowers  to borrowers. I feel this high interest rates has significant effect on the proper use of borrowed money. Before giving loan find it out, how they are going to use that money?give them(Borrower) time to use the money, not just give them money and take it back with interest.

Before writing this comment, i talked with 20 members of micro-credit borrowers who are taking loan from different Micro-finance institution. i asked them did they change their living standard? They couldn't give me a positive answer. Even they are taking loan from one MF institution to pay other MF institution (as they unable to pay the loan of previous MF institution)

Find it out from http://palash-schooloffinance.blogspot.com/

Link:

1.Prothom- alo

2.Vision of micor-finance
3. Award for trading dead