Poor and want to start a business?
Sorry, you’re staying on benefits
Today’s Sunday Herald reports that a hugely successful Bangladeshi micro-finance scheme to help the poor start their own businesses and work their way out of poverty risks failing in Glasgow – because of benefits.
The Grameen Bank, originally founded in 1976 by Professor Muhammad Yunus to help famine-struck villages near Chittagong, offers impoverished communities access to small amounts of credit without the need to offer collateral. The borrowing communities are largely self-adminstering and encourage good business and social behaviour among their members. The scheme and its founder are credited with raising millions of Bangladeshis out of acute poverty and won the Nobel Peace Prize in 2006.
Yet an attempt to introduce the scheme in Glasgow, named Grameen Glasgow, may be scuppered simply because its target communities are on benefits – and may lose their benefits if they take out a Grameen business loan.
Scottish Secretary Jim Murphy is reportedly going to take this up in Westminster with the Department of Work and Pensions, who have so far been unable to say whether participating in the scheme really will disqualify people from receiving benefits.
Let’s hope he’s successful. Given that the Grameen Bank has spawned successful imitations in 80 countries around the world, including in New York, it’d be a pity – and rather embarrassing – if it failed in Glasgow.
(Those with access to BBC Scotland can see a programme about the scheme, Scotland’s Brand New Bank, on Tuesday 7 July at 2235 BST.)
PS: If you like the idea of using micro-credit to help combat world poverty and would like to support a similar venture, our sister site, BritishExpat.com, has set up a lending team on Kiva.org. You can lend as little as $25 to an entrepreneur in a developing country and help give them a leg-up into a better life. What makes it even more attractive is that you get to choose whom you want to lend to, and get regular progress reports on your loan and the person you’re supporting.
Check it out here:
BritishExpat Editor’s Blog: Kiva – give the world’s poor a leg-up
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30 June 2012 at 15:06 GMT
It would a shame if this scheme could not be implemented in Glasgow. I don’t believe the scotish secretary will succed at Westminster. I think a slight change in policy is needed to accomodate people who need a second chance. I would suggest they would be allowed to benefit with the scheme and benefits would be stopped once the business start profiting. In this time of crisis these people actually would be potential employees thus boosting the economy. Even it meant repaying the benefits received afterwards…like paying back a loan.
30 June 2012 at 15:33 GMT
Thanks for commenting, Henrique. Things have moved on since this article was written three years ago, and the good news is that Grameen and Glasgow Caledonian University are pressing ahead with the scheme, although the pilot hasn’t actually launched yet. You can read more about their partnership on their website here:
Grameen Caledonian Partnership