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New York : 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 loaned $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 $176 million 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 Yunus made to 42 women in Bangladesh in 1976, has now made more than $6.5 billion in loans to seven million people in the country.
In the US, about 28 million people have no bank accounts and 44.7 million have only limited access to financial institutions.
Your comments
It is an excellent micro credit programme which is helping people in rural areas.
Habib
Dubai,UAE
Posted: February 18, 2008, 15:57
This is excellent news. At the moment the current financial system is run BY rich people FOR the benefit of rich people, and unless you are one of those rich people you/we have no chance. As they say "money goes to money" and that is what is wrong with our current corrupt financial system.
Sergei
London,UK
Posted: February 18, 2008, 14:19
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