Are Grameen Banks the only sources of elimination of poverty?

Question

The Grameen Bank was founded by the recent Nobel Peace Prize winner, Sir Muhammad Yunis (Bangladesh). This bank issues low scale loans (less than $200) with no collateral, towards those seeking to develop a small scale manufacturing unit or business. These banks observe an astonishingly high rate of return (more than 90%). The basic objective of the Grameen bank is to help the poor stand on their own feet.

Obviously, there have not been more significant ideas to help solve the problem of poverty. Are there any other ways to end poverty? If your solution targets a specific region (Somalia, for example), please specify the region. ....Looking forward to your response.....Thank you.... - Praveen

Answer 1

Unfortunately, Grameen is a manifestation of the problem, not a solution. Grameen is lending to the poor only because it has nowhere else to lend; commercial borrowers are assigned to the nationalised commercial banks that dominate Bangladeshi banking landscape...

Lifting out of poverty is possible (and has been done repeatedly in places as different as Sweden and Japan), but it invariably involves large-scale export-oriented enterprise. And large-scale export-oriented enterprise can only develop in a proper institutional setting, which, sadly, Bangladesh does not have. High tariffs, corruption in the customs, capital controls, dominance of nationalised commercial banks (in 2004, there were measly 28 private banks in a country of 135 million), corruption in lower courts, inconsistent or selectively enforced regulation, widespread abuse of power by law enforcement and military -- these are harsh realities of life in Bangladesh... Until they change, poverty is not going anywhere...

Answer 2

There are a number of microfinance institutions located throughout the world, the World Bank estimates that the number could be as high as 7,000. Some examples of international microfinance institutions are Accion International, FINCA International, and the SEEP Network. There are also local institutions in many poor countries throughout the world.
As you point out, microfinance institutions rates vary widely, and some of them are astonishingly high. In addition, some of their repayment rates may be inflated as borrowers "roll over" loans by borrowing additional funds to repay previous loans. There are a wide variety of poverty alleviation solutions that do not include microfinance. Some of these involve training and education programs. Some involve grant aid of agricultural or industrial resources to start villages off toward finding a sustainable livelihood. Some organizations donate livestock such as cows, which can provide milk for long periods of time.

Answer 3

His idea was not bad, but he is charging very high interest rate,
The solution I fined it in the Islamic economy, every body at the end of the year is paying 2.5% of his money to the poor, and really when it was applied in the past, during the Islamic nation, it succeed to eliminate the poverty.