SocialDevelopmentinJapanFinalPaper

CristianSantibanez

TheGrameenBank,microcreditin BangladeshandSocialDevelopment
Introduction
Banksneedcollateral.Thepoorcannotoffercollateral.Moreover,thepoorarenot tobetrusted.Theyarenotcreditworthy.Bankingisabusiness.Itcannotindulgein charityforthepoor().Ifwearelookingforonesingleactionwhichwillenable thepoortoovercometheirpoverty,Iwouldgoforcredit.Moneyispower.
MuhammadYunus,GrameenBank.Doesthecapitalistsystemhavetobethehandmaidenoftherich?(1994)

MicrocreditwasborninBangladeshasananswertothisidea.MuhammadYunus stronglybelievedthatcreditandeconomicpowerbelongedtothefundamental humanrights,asechoedinthefirstpartofarticle25oftheUnitedNations UniversalDeclarationofHumanRights1.Withouteconomicresources,allother humanrightscannotbeachieved. Amicrocredit,initssimplestexpression,isaloanofaverysmallamount.Inthe GrameenBanksystemandideology,themicrocredithastobecollateralfree,and musttargetonlythosewhoaredeprivedoftheirfundamentalrightsi.e.the poorest.Inotherwords,microcreditchallengescapitalismbyinputtingasocial developmentdimensioninoneofitsfundamentalmechanismsthroughahuman rightsperspective.
1Everyonehastherighttoastandardoflivingadequateforthehealthandwellbeingofhimself

andofhisfamily,includingfood,clothing,housingandmedicalcareandnecessarysocialservices, andtherighttosecurityintheeventofunemployment,sickness,disability,widowhood,oldage orotherlackoflivelihoodincircumstancesbeyondhiscontrol.

SocialDevelopmentinJapanFinalPaper

CristianSantibanez

Whentalkingaboutsocialdevelopment,bothModernisationtheoryand Dependencytheorytendtoenvisionsocialdevelopmentfromaglobalpointof view,andtheeconomicresponsestothatare,accordingly,designedona macroeconomiclevel.Itisonlyrecently,sincemicroeconomicsocial developmentactionssuchastheGrameenBanksmicrocreditprogramsproved theirefficiencythatWorldBanksparadigmofsocialdevelopmentisshifting, thoughlittlebylittle. Ontheotherhand,socialdevelopmenttriedtobroadenitstheoreticalbaseby implementingtheculturalfactorinitsmethodology.Towhatextentcanculture fosterorpreventsocialdevelopment?TheGrameenBanksmicrocreditsystem inBangladeshoffersaveryinterestingcasestudybytacklingbothaclearly identifiedsocialissueandtherelevancyofthecultureparadigmwhendealing withsocialissues.

I.

TheGrameenBanksmicrocreditsystem

Inthemiddleofthe1970s,Bangladeshwasdevastated.Acivilwarandamajor floodcausedeconomiccollapsefollowedbyseverefamine,increasingto hundredsofthousandsthenumberofpeopledead.Peopleborrowedmoney fromlocalmoneylenderswhowouldchargethemwithexcessiveinterestrates. MuhammadYunusidentifiedthisastheviciouscircleofpoverty:peopleproduce goods,butdonthaveenoughmoneytobuytherawmaterials.Hence,they borrowthenecessarymoneytobuytherawmaterials,butthemtheyneedto payback.Themoneylenderstakealmostalltheaddedvalue,leavingthepeople

SocialDevelopmentinJapanFinalPaper

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withjustenoughtosurvive,andtheimpossibilitytobecomefinancially independent. However,bylendingasmallamountofmoneytothosepeoplewithanormal interestrate,thecirclecouldbebrokenandextremepovertychallenged.With thisideatheGrameenBankbegunasanaction/researchprogramthat eventuallybecameanindependentfinancialinstitution.AsofOctober2007,the bankhadabout24703employees,2468branches,andcoveredmorethan80 257villages.Sinceitscreation,thebankissaidtohavedistributedtheequivalent ofUSD6.55billioninloans,withUSD5.87billionrepaid. TheGrameenBanksmicrocreditsystemstartsfromcreditconceivedasahuman right,afundamentalneed.Thelendingsystemcharacteristicsare,accordingto Golieg.JansenandJamesL.Pippard,thefollowing:nontraditionaltargetgroup; peerlendingthroughsolidaritygroups;bankgoestothepoor;pyramid organisationalstructure;socialdevelopmentcombinedwitheconomic development;intensivetrainingofbankworkersandborrowers;savings requirements.Toputitsimply,theGrameenBankslendsmoneytopeople excludedfromtheclassicfinancialsystem,replacingcollateralbygroup solidarityandcollectiveresponsibility:oncethetwoloanershaverepaid,the nexttwobecomeeligibleforaloan.Itsgeneralstructureisnotcentralisedbut ratherpyramidal,stronglybenttowardslocalimplementationandlocal development.AsGolieG.JansenandJamesL.Pippardputit,theGrameenBanks approachisagrassrootsorganizingapproach,facilitatingparticipationandthe developmentofleadershipskills.

SocialDevelopmentinJapanFinalPaper

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II.

Theculturalissue:womenandapatriarchalsociety

TheGrameenBankloansaregivenmainlytowomen.FromYunusperspective, givingthemoneytowomenisessentiallyaneasierwayforensuringthe prosperityofhouseholds:whiletheytrytospendtheirmoneyinfamilyneeds menputpersonalneedsfirst.HoweverBangladeshisapatriarchalsocietyin whichwomenareverylittleifcompletelynotrecognised.AsMahaswetaM. Banerjeeputsit,microentreprisescreateaculturethathasripplingeffectson thecommunity.Byfosteringconfidence,dignity,family,stabilityand empowerment,theytendtobeaviableantipovertystrategy.Inthecaseof Bangladesh,thecentralrolegiventowomenintheGrameenBanksmicrocredit systemhaddeepimpactsonthepowerandstatusofwomen;GolieG.Jansenand JamesL.Pipparddescribeitintermsofarevolutionintheruralworld. WomeninBangladeshdontownland,theyarenotallowedtobeeducated,and aresocialisedtothinkofthemselvesasbeinginferiortomen.Moreover, accordingtoAminurRahman,intheruralsocietyofBangladesh,womenare identifiedwithmodestyandpurity.Thiscreatesapsychologicalpressurethat mendontexperiencetothesamelevel.Awomenshonourhasaname:izzat.If herizzatiscompromised,herwholehouseholdandlineagegetabadreputation. Insimpleterms,womenwhodecidetoexposethemselvesareculturallyalot morevulnerablethanmen.FollowingAminurRahmanscritique,suchsocial pressurecreatesamoredifficultenvironmentforwomen.Ashestatesit,Outof 120womenborrowers,21borrowers,about18%claimadecrease,and70% emphasizeanincreaseinviolenceandaggressivebehaviourbecauseoftheir involvementwiththeBank.

SocialDevelopmentinJapanFinalPaper

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Still,themicrocreditprogramsoftheGrameenBankhadrealimpactsonthe livesofalargenumberofBangladeshiandhaveproventobeanefficientsolution againstextremepoverty.Hence,weareconfrontedtoasituationwherean accurateanswertoadeepsocialdevelopmentissueisconfrontedtoanarising culturaltension,i.e.womensplaceinsociety.

Conclusion
Towhatextentwillmicrocreditsfightagainstextremepovertybethreatenedby growingpressingonwomenandtheculturalshiftinducedbytheGrameen Banksaction?Theastonishingresultsandtheverypositiveaurasurrounding theGrameenBankmakedifficulttogiveadefiniteanswertothisquestion.For AminurRahman,thehiddenscript,i.e.therealityoftheGrameenBankssystem isbeinglittlebylittlebecomingcentralandheclearlyimpliesthatitmight compromisethevirtuouscircleofmicrocreditbychallengingitsveryroots. HereIbelieveitmightbeinterestingthoughtocomebacktothefundamental philosophicaldistinctionbetweennatureandculture.Extremepovertyisnota commonsocialissue.Extremepovertythreatenspeopleslivesandcantherefore somewhatbeassimilatedtoThomasHobbesvisionofmeninnature.Culture comesandbeginswherepeopledecidedtojoinhandsandtrusttheLeviathanto ensuretheirownsafety.Inotherterms,tobetterunderstandwhenthecultural paradigmbecomesarealcentralissuewhilethinkingaboutsocialdevelopment mightbebetterunderstoodifthoughtonatheoreticaldistinctionbetweensocial developmentissuesfundamentallythreateningtheimmediatepresentandlives

SocialDevelopmentinJapanFinalPaper

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ofthepeopleconcerned,onetheonehand,andissuesinwhichpeoplesdecision tolivetogetherasasocietyisnotcompromised.
Bibliography Banerjee,MahaswetaM.,'MicroEnterpriseDevelopment:AResponsetoPoverty',in JournalofCommunityPractice,5:1,6383,1998 Jansen,GolieG.andPippard,JamesL.,'TheGrameenBankinBangladesh:HelpingPoor WomenwithCreditforSelfEmployment',inJournalofCommunityPractice,5:1,103 123,1998 AminurRahman,MicrocreditInitiativesforEquitableandSustainableDevelopment: WhoPays?inWorldDevelopment,Vol.27,No.1,pp.6782,1999 Hoque,Serajul,'MicrocreditandthereductionofpovertyinBangladesh',inJournalof ContemporaryAsia,34:1,2132,2004 GrameenBankarticleinWikipedia(Englishversion),lastaccessonJuly16, http://en.wikipedia.org/wiki/Grameen_Bank