Banks for poor can improve lives drastically [Archives:2007/1027/Opinion]

February 22 2007

By: Faruq Loqman
News sources reported that Bahrain took procedures to establish the first bank for the poor in the Arab world. It added that the Bahraini Minister of Social Development Fatima Al-Belaishi signed a memorandum of understanding with Mohamed Younis, founder of Jaramin Bank for the Poor in Bangladesh, with the aim of providing experts to establish a financial institution similar to the famous bank, but under the name of 'Family Bank.'

It is known that the Professor of Economics Younis won the Noble Peace Prize last year in recognition of his peaceful thinking and noble intent, according to 7 million customers od the bank.

The word Jaramin means 'a village' because the bank's activities are meant for residents of rural areas. In my first essay about the bank in the 1980s, I described it the 'Penniless Bank.' This is not faulty because poverty is no sin as much as it is a difficult test requiring people to pursue all the possible efforts to persevere through it and restore the smile to the lips of widows and orphans. More than once, I called for establishing similar banks in the country to be like that of Jaramin. I provided readers, who telephoned me, with the necessary information regarding this kind of financial institution. I don't want to repeat this here, as people can get the information from the Internet about one of the most important and useful financial projects in the developing world.

I hoped that Yemen be the first country to establish several similar banks since it is in need of such banks. If Younis has benefited 7 million families up until now, we can imagine the interest due to be earned by half or one-fourth the number in Yemen.

Bahrain took a good initiative when it contacted Younis urging him to help it and provide it with some of Jaramin Bank's experts to establish the Family Bank. In Yemen, we are in need of more than an important bank to serve the widows, at first, and the penniless people, who don't spend their loans on qat, cigarette and drugs. Rather they spend the money on productive instruments as Jaramin Bank does, i.e. spending the money on equipment for sewing, cooking and washing machines. In addition, Jaramin Ban provides seeds for agricultural lands. There are hundreds of projects, which can be funded by a similar bank, extending from Aden to Shabwa, Ibb, Baihan, Mahweet and other parts of Yemen.

During my most recent visit to Yemen, I was happy to meet a trade firm representative, who asked me to inform him about Jaramin Bank, and how to contact the bank to obtain some basic information. We would contact Jaramin Bank and become the first founders of a bank of this kind irrespective of its name.

The process began with providing loans, which has never exceeded one thousand Takas, the local currency with a value not less than an Indian or Pakistani Rupee. Step by step, the number of customers has exceeded 7 million, most of whom are women whose husbands abandoned them, along with their children. They don't have a breadwinner and live in huts without water and electricity. These women found something humanitarian in Younis, which has never happened in the history of Bangladesh, and people of other countries who told Younis that millions of widows and spinsters have benefited from the project.

It is encouraging to see a woman take a loan and invest an equivalent of $100. Thanks to her patience and determination, she sustained her children and bought them clean clothes. Women who took loans proved to be better than men in repaying the bank. When the penniless men saw this, they took loans and paid the bank back immediately and this made the paid debts exceed 96 percent of the overall debts.

For potential investors who fear loss, we are pleased to tell them that the total revenues of Jaramin Bank amount to 5 billion Takas, its interest to billion Takas and its workers number up to 10 thousand. Similar banks have imitated Jaramin Bank in many countries worldwide.

In the coming weeks, Younis is due to send a team of Jaramin Bank's experts to specify the details of the bank and the loan mechanism. If the rich and relatively small Bahrain that annually welcomes four million tourists, most of whom are from Saudi Arabia, felt the need for establishing the 'Family Bank' or the Penniless Bank, what about the poorest and more populous Yemen, which is in an urgent need for such a bank?

Source: .al-ayyam newspaper.