Professor Muhammad Yunus, pioneer of the Grameen Bank of Bangladesh, has provided a financial model to provide micro credit to small entrepreneurs whom the commercial banks felt were not bankable. Determined to help poor entrepreneurs who were exploited by local money lenders, Yunus decided that he would risk his own money to provide loans to those entrepreneurs. He organized these entrepreneurs in groups of five and encouraged them to save weekly. The group provided social pressure on its members for them to make the sacrifices and the discipline to repay the loans taken.
Today the Grameen Bank is a success story and has been adopted all over the world. The UN has also endorsed the Grameen Bank as its objective is to provide financial independence to the poor with its target being the poorest of the poor and mainly women who happen to be less than 1% of the beneficiaries of loans from commercial banks in Bangladesh up to 2004.
By 2017 the Grameen Bank had 19 branches in eleven (11) cities of the United States of America. Unfortunately, no individual or group in oil rich Trinidad and Tobago saw the need to develop such a bank because our colonial mindset does not acknowledge the latent entrepreneurial spirt of the poor in our society.
Has the credit union movement in Trinidad and Tobago served the poor? Without a doubt the credit union has empowered working people with regular wages and salaries. However, it has failed to implement policies to cater for the poor who have limited or not income and collateral. Unfortunately, our credit unions do not provide for the have nots; not even bothering to develop policies to financially empower the poor and women.
Today our poor are still at the mercy of the local money lenders who charge exorbitant and outrageous interest rates. Other financial institutions also exploit the misfortunes of the poor because the credit union movement that initially sets out to provide such services got derailed. This is the misfortune of those of the left who spout socialism unconsciously when they carry a bourgeois mindset.
Credit is critical for economic development. Without access to credit, it is difficult for any individual to champion economic development and if today we are besieged with so many poor families in our society it is because credit unions have misused its mandate. It is time for credit unions to understand that they are not banks. Providing mortgages for homes is not empowering the people; providing them with capital to generate incomes is real financial empowerment. This is the surest way to grow wealth!
The concept of the Grameen Bank must be adopted to help our poor to stand on their feet. But firstly, we must acknowledge that the poor live amongst us and that they can develop the skills and talents to grow wealth when empowered. This should have been to drive and focus of our credit unions. Unfortunately, they are now sparing against the commercial banks. It is a matter of time before they all hit the canvas with froth coming from their mouths!