Muhammad Yunus, (born June 28, 1940) is a Bangladeshi, banker, economist, social capitalist and civil society leader who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and microfinance. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. In 2006, Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize “for their efforts through microcredit to create economic and social development from below”.
The Norwegian Nobel Committee said that “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty” and that “across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development”.
In February 2011, Yunus together with Saskia Burstyn, Sophie Eisenmann and Hans Reitz co-founded Yunus Social Business – Global Initiatives (YSB). YSB creates and empowers social businesses to address and solve social problems around the world. As the international implementation arm for Yunus’ vision of a new, humane capitalism, YSB manages incubator funds for social businesses in developing countries and provides advisory services to companies, governments, foundations and NGOs.
Successful enterprising activities
“Contrary to what is often claimed, microcredits are not a way out of poverty; on the contrary they most often result in a greater deprivation and humiliation of their victims. On the Indian sub-continent 65 million people have taken on a microcredit, 90% are women. Worldwide, women count for 81% of microcredit users (112 million). After an enquiry among microcredit victims and militants acting in their defence, we present here some emblematic cases. We point out that we have been unable to meet any advocates of microcredits.
Contrary to the usual claim, (affirmation) that a small loan will permit the development of successful enterprising activities, in most cases the users have used microcredit to cover more imperative and immediate necessities such as rents, loans, costs of schooling or medical treatment. Microcredits in Sri Lanka have most often been granted to women without any income,” say Eric Toussaint the famous social worker and his group.
These examples were all mentioned when they met over a dozen indebted women in Negombo; they had come at the bidding of a local organisation that is active on housing rights. This organisation represented by a lawyer and discussion took part a few days before, in the 7th annual CADTM South Asia workshop that discussed public and private debt and particularly the nefarious effects of microcredit.
This association, along with many activists that they encountered during their stay has become aware of the rapid expansion of microcredit over the last few years and the distress it is causing among the poor classes, especially the poorest who have incomes of less than 100 euros a month. It must be noted that Lankan minimum wage is at 10,000 rupees (52 euros) a month.
In above mentioned cases minimum rents for a family are at this level and the minimum wage is not guaranteed because many jobs are in the parallel sectors of the economy (undeclared employment). The families they met were between four and six persons trying to live eat, be housed, educated and cared for, where necessary, on one income. In all the cases they met, the women who took out micro loans did so in order to face one of these basic necessities. In all cases the women were forced to seek further loans, sometimes from local usurers, to cover repayments of previous loans with such extortionate conditions that normal repayments become impossible.
All these stories confirm the declarations made during the assembly organised by the CADTM in Colombo on April 6 to 8, 2018. The representatives of populist social movements from all over Lanka were present. The distress of these families push many women to seeking work in the Middle East and, so they are absent for long periods.
These jobs do not always allow the women to pay off their debt. Many women, despite promises made, find they are not paid for their work, which is often the cause of even more oppression. It was reported that employment agencies for the Gulf States are forcing women to take the contraceptive pill, bringing credibility to the many reported cases of domestics being raped. What is more, Lanka has just been through a long civil war causing many women to be single mothers, particularly among the Tamil people in the North and East of the country.
Self-employed occupations
Two conclusions may be drawn from the workshop: firstly it is necessary to urge a movement of non-payment of microcredit debts in order to bring the authorities to the negotiating table with the radical mass movement for access to soft loans. Secondly it is also necessary to integrate the resistance to abusive microcredit into a comprehensive struggle for income increases, a guaranteed minimum for the fishermen, small farmers and other self-employed occupations, improving public services, authorities creating more jobs and measures in favour of small producers.
It is fundamental to put the question of microcredit into a worldwide perspective; breaking the Vicious Cycle of Illegitimate Private Debt in the global South. In general the “debt system” is gathering steam in Asia, Africa, Latin America and the Caribbean, just as in the highly industrialized countries, after going through several fundamental changes over the past 40 years. Cycle of illegitimate private debt came mainly since the outbreak of the Third World debt crisis in the early 1980s. Austerity policies aiming for structural adjustments encourage private debt. Structural adjustment programmes were widely implemented on the pretext of the public debt crisis. The late 20th century saw the domination of austerity policies and structural adjustment programmes in most countries, particularly in the so-called “developing” countries and the former Eastern bloc.
International institutions imposed these structural adjustment programmes, with the willing complicity of right-wing governments in order to implement a series of counter-reforms conducive only to the interests of large private enterprises, the great powers and local ruling classes. These policies have degraded the living conditions of a large section of the population, particularly in the agricultural regions but also in the urban areas. This is the opinion of local and international socialists.
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