What is Microcredit?

Filed under Economy & Finance

It is interesting that in Islam, charity is given 10x rewards and benevolent loan - qardhul hassan is given 18x rewards. The reason is simple, the loanee will not ask for a loan except he is in monetary trouble.

So, when Muhammad Yunus of Grameen Bank stated that credit is a human right, it do make sense. Why conventional banks stops or hardened the poor and needy people from credit facilities and they are willingly to give a huge amount of loans to the rich people?

The answer because conventional banks operates on riba’. They make profit mainly from credits and loans. When credits become a business, then riba’ could easily occurs.

In the previous post, it has been stated that it is the system that creates poverty. Poor people don’t create it. And you may want to read the article on microcredit from Muhammad Yunus himself.

What is Microcredit ?  

The word “microcredit” did not exist before the seventies. Now it has become a buzz-word among the development practitioners. In the process, the word has been imputed to mean everything to everybody. No one now gets shocked if somebody uses the term “microcredit” to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from the savings and loan associations, or from credit unions, or from money lenders. When someone claims microcredit has a thousand year history, or a hundred year history, nobody finds it as an exciting piece of historical information.

Read the full article here


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One Comment

  1. Posted November 19, 2007 at 11:19 pm | Permalink

    Dia ni yang dapat Nobel prize kan??… Good article pakdi.

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