DHAKA: On Tuesday the 30th Novermber 2010 at 9:30pm, the world premiere of a documentary film on Microfinance titled Caught in Micro debt held on Norwegian State TV. Caught in Micro debt is a film by award-winning Danish documentary film maker, Tom Heinemann.
Muhammad Yunus drew off nearly Tk 7 billion in aid for poor borrowers of Grameen Bank to another of his company back in 1996, the Norwegian TV says.
Nobel Laureate Yunus` famous micro-credit bank Grameen Bank`s 30 percent interest rates, leading many poor women into a debt spiral, the documentary reveals.
Burn-point documentary "Caught in the micro-debt" shows a completely different side than the microcredit Muhammad Yunus and his bank Prize-winning Grameen Bank likes to portray in public.
Investigations of the Danish journalist Tom Heinemann has made for NRK Brennpunkt several trips to Bangladesh, and talks with a number of international experts worldwide, shows that the Grameen Bank leads many poor women out of a crippling debt spiral, the documentary shows.
The women pay about 30 per cent interest on loans, as they already have to start paying back after a week.
The documentary tells the poor to harsh collection methods from Grameen Bank, which has received the entire 400 million in aid from Norway.
The enthusiasm has been great for the "bank for the poor" that started with Yunus in 1976 borrowed $ 27 to 42 women in the village of Jobra in Bangladesh.
Today, Grameen Bank nearly 8.5 million lenders, most of them women, and thus is the flagship in a micro business that has spread to the entire globe.
Grameen Bank itself boasts a repayment rate of around 97-98 per cent, and believes that it proves the bank`s success.
If it means that micro-loans give women a way out of poverty, is another matter. In "Caught in the micro-debt" we meet experts who refer to the experiences and studies that provide a very different picture.
People of good will want to help developing countries, particularly in Scandinavia, has - excuse the expression - have been fooled into thinking that this is the ideal solution to poverty, "says Ha-Joon Chang, professor at the University of Cambridge.
Another expert who spoke very critical of the documentary is senior David Roodman of the Center for Global Development in Washington.
We decide who should get money based on who tells the best stories and makes us feel good about where the money goes, "said Roodman.
High interest rates
In 2007 announced a number of economists in Bangladesh, a study covering 2500 poor people who had taken micro loans. More than a third had loans from Grameen Bank.
The Grameen Bank, the interest rate between 26 and 31 percent, while interest rates were even higher in other microfinance institutions.
Burn-point studies have shown that microfinance institutions around the world take over 100 percent interest and at worst in 200 percent.
Scared to payment
At one point I got problems with your refund. The staff of Grameen Bank came and called me names. They threatened me with selling panels from the house. If I did not pay, they would throw me on the street. They said many nasty things to me. I was scared and sold everything I owned and paid installment. The house will collapse. There are holes in the roof. I have no one in the world, "said Hazera, one of the poor women Focal Point meetings in the documentary.
Norad supported the Grameen Bank from 1986 to 1997 with a total of 400 million. Focal Point has gone through the entire archive of Norad, which has the Grameen Bank to make. Here it emerged that employees of NORAD in the early 1990`s was concerned that the poor were trapped in a debt spiral.
In a memo from Norad 20 December 1993 states the following:
"In fact, according to a survey done by David Gibbons and Helen Todd of the 40 women with 10 years of
membership (of Grameen Bank), had almost all borrowed privately to pay installments."
And in another note from Norad 1 June 1994 states the following:
"One of the matters which the report points out is that the credit concept as it has evolved, created fertile ground for a practice in which new loans can be used to repay current loans.
I took a loan, so I was forced to take another loan to cover the costs of the first loan. So I took another loan to cover the payment. Now I have debt in five organizations, "said Yasmeen, another woman in
Bangladesh who have spoken with Focal Point.
Credit vs. Debt
Muhammad Yunus said that credit is a human, but he never said that debt is a human right. Every time you pick up your credit, you`re in debt. Poor people do not like debt better than you and I do, "says researcher Thomas Dichter microcredit.
Dichter has previously long career behind him in the World Bank and the United Nations, and believes that microcredit has not been met with critical eye necessary because "we want to see the smiling faces."
Senior Milford Bateman at the Overseas Development Institute in London believe that it is time for self-examination in relation to the tribute of microcredit as a tool for the elimination of poverty.
We are caught in this development model and it`s going to be hard for us to accept that we have been
wrong for 30 years, "said Bateman Burn-point in the documentary.
Ole Danbolt Mjøs was chairman of the Nobel Committee when Yunus and Grameen Bank were awarded in 1996:
Debt is not a human right, but it is a human right to have a worthwhile economy for their own lives, "said Mjøs documentary.
When asked whether it is commendable that poor people will pay twice as much in interest as us in Norway, he replies:
The issue of interest rates and repayment terms are clearly important issues. In my opinion, the interest rate should be reduced as much as possible.
It has not been possible to get the Nobel Peace Prize winner Yunus and Grameen Bank to comment on the criticism against them.
Focus has for months been trying to get them to line up for interviews in the documentary or answer detailed questions - without success.
BDST 1236 HRS, 01 DEC 2010
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