FUNDING FOR WHOM?
The Green Party’s Co-Leader, Metiria Turei, was recently quoted by Infonews.co.nz as saying that because big inequalities in New Zealand still exist today, Whānau Ora may help of only if the right funding and structures are in place and if it looks at housing needs and income support of financially-handicapped families by providing wrap-around services that address the causes of problems.
Mrs Turei added that the Green Party was concerned that setting up a trust that was proposed under the Whānau Ora Taskforce Report which, “might mean money that could be spent on providing services will be used on a new bureaucracy instead of working with whānau on holistic solutions.”
“Empowering (family) collectives to address social issues is a positive move, but we don’t want to see funding diverted from the public sector to private groups that are set up to make a profit. We would certainly oppose anything that takes us in the direction of privatising the benefit system.” said Mrs. Turei.
A MODEL FOR EMPOWERMENT
It has successfully employed a system that helps self-employed poor work their way out of poverty by providing them loans on terms suitable to them and by teaching them a few sound financial principles. “Big problem, simple solution.”, as the bank’s founder explains. This unique system also evolved from the bank’s underlying objectives, which were:
- extend banking facilities to poor men and women;
- eliminate the exploitation of the poor by money lenders;
- create opportunities for self-employment for the multitude of unem-ployed people;
- bring the disadvantaged, mostly women from the poorest households, within the fold of an organisational format which they can understand and manage by themselves; and,
- reverse the age-old vicious circle of “low income, low saving & low in-vestment”, into virtuous circle of “low income, injection of credit, in-vestment, more income, more savings, more investment, more income”.
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BY FAMILY, FOR FAMILY
Grameen Bank’s system is based on the idea that financially handicapped individuals have skills that are under-utilised. A group-based credit approach is applied which utilises peer-pressure – one which encourages a person to change his or her attitudes, values, or behavior in order to conform to group norms, within the group to ensure that borrowers follow through and use caution in conducting their financial affairs with strict discipline, ensuring repayment eventually and allowing the borrowers to develop good credit standing.
There is no legal instrument or written contract between Grameen Bank and its borrowers as the system works based on trust. To supplement lending, Grameen Bank also requires borrowing members to save very small amounts regularly in a number of funds like emergency fund, group fund etc. These savings help serve as an insurance against contingencies.
One unusual feature of the Grameen Bank is that it is owned by the borrowers of the bank, 97% of whom are women and who have, on behalf of their own families, risen above poverty as measured by such standards as having all children of school age in school, all household members eating three meals a day, a sanitary toilet, a rainproof house, clean drinking water and the ability to repay US$ 4.00 a week to service their loan.
Since its inception in October 1983, the bank has distributed US$ 6.55-billion in micro-loans. Out of this, US$ 5.87-billion has been repaid.
AROUND THE WORLD
The work of Grameen Bank which was started in Bangladesh by its founder and Nobel Prize winner, Dr. Muhammad Yunus, has inspired the creation of the Grameen Foundation, which aims to share the Grameen philosophy and accelerate the impact of microfinance for financially-handicapped families in countries all over the world.
The Foundation, which has an A-rating from Charity Watch, not only provides microloans in the USA itself, but also supports microfinance institutions worldwide with loan guarantees, training, and technology transfer. As of 2008, the Grameen Foundation supports microfinance institutions in over 40 countries situated in the Americas, Asia-Pacific and African regions and even has an office in Sydney, Australia.