Following the reference to microfinance on this site in January, we received news of a Scottish initiative, in which the Glasgow Caledonian University (GCU) is drawing on the Grameen Bank model devised and overseen for many years by Professor Mohammed Yunus.
In an article in the Scotsman, Professor Yunus, an economist, says:
“The size of the challenge is great. In Scotland, and in the rest of the UK, there are pockets of poverty and welfare dependency which have not changed in the last 40 years. In the West of Scotland, around 300,000 people live in the poorest category of household income. Too many families are blighted by third or even fourth generation unemployment. More than half of the poorest households do not make savings of £10 a month or more. Predatory lenders sometimes target these communities and families, charging huge rates of interest.
He will travel to Glasgow to meet a group of women from communities across Glasgow such as Provanmill, Pollokshaws and Maryhill, who were inspired by a Church of Scotland sponsored trip to India to learn more about how ideas of self-reliance work in other countries. Some now run a community lunch club, saving the small amount of profit for future investment. Others have decided to set up a laundry repair business.
The Grameen Scotland Foundation is raising money to support the process of bringing this lending model to the UK for the first time. With more than £100,000 raised so far, the charity is well on its way to reaching its initial £1m target. With a central administration office hosted by GCU, the project will serve the local authority areas of Glasgow, North Ayrshire, West Dunbartonshire and Inverclyde.
The President of the GCU Foundation, Colin McCallum, and Professor Yunus are well aware of the problem posed by the ‘poverty trap’, “with people locked on welfare for several generations”, some of whom are “looking for a way out”.
Mr McCallum adds, cryptically, that “there is some evidence that welfare reliance may not present the scale of barrier that we might assume.”
We look forward to hearing more about this project and hope that it will succeed and be replicated in other areas
* To pre-empt comments, we note here that since Nobel Laureate Yunus was cleared of certain allegations, his accuser, the prime minister of Bangladesh, proposed him as a candidate for the chairmanship of the World Bank.