Low Hansiong / New York, United States
In the vein of my last article on public service, I would like to expand on one method of actually bringing about poverty reduction. Microcredit has been around for the past 10 to 15 years. it was first formally pioneered by the Grameen Bank (based in Bangladesh: whose founder received a Nobel peace prize for his work).
As the name suggests, microcredit, in a nutshell, revolves around lending money to the poor. Unlike the situation in Singapore, where you could not escape the chance of obtaining credit even if you don’t want to, the poor (defined by people living under $2 a day) can never dream of being able to take a loan. It boggles the mind that a simple $100 loan could go such a long way in changing a household’s future for the better.
Financial Services for the Underprivileged
Traditionally, the poor can only access capital through moneylenders (colloquially known as ‘ah long’) or informal savings club i.e. ROSCAs (Rotating Savings and Credit Association) for financial transactions. The poor are ostracized by the banks because they were deemed high risk and have no collateral to back the loan, this is where the ‘ah longs’ and ROSCAs come in; they provide this niche that is essential to the daily financial balances of the poor.