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More than 100 Million of World's Poorest Benefit from Microcredit

More than 106 million of the world’s poorest families received a microloan in 2007, surpassing the goal set 10 years earlier, according to a report released here on 26 January 2009 by the Microcredit Summit Campaign. Microloans are used to help people living in extreme poverty start or expand a range of tiny businesses such as cattle rearing, fruits or tea stalls, to name a few. In India, the poor use micro-loans for agricultural purposes too.

“This is a tremendous achievement that many people thought was far too difficult to reach,” said Nobel Peace Prize laureate and Grameen Bank founder Muhammad Yunus who was present for the announcement.“What makes it even more remarkable is that loans to more than 100 million very poor families now touch the lives of more than half a billion family members around the world.That is half of the world’s poorest people.”

According to the Organisers, when the goal was originally set in 1997, fewer than 8 million very poor clients had a microloan.That number has grown by more than 1,300 per cent between 1997 and 2007.In 2007, microloans went to 88 million very poor women. The Microcredit Summit Campaign counts the world’s poorest as those who live in the bottom half of those living below their nation’s poverty line or any of the 1 billion people living on less than US$ 1 a day.

While the world’s financial markets are gripped by a global economic crisis, this quiet revolution in microbanking has spread to the most destitute corners of the world. “Microcredit is one of the most effective ways to help the poor find a dignified route out of poverty,” said Microcredit Summit Campaign director Sam Daley-Harris.

Closer home SHARE Microfin is an innovative microfinance institution that started off with a small loan of Rs 500 (USD 12) to a destitute widow at Veldurthi in Kurnool district of Andhra Pradesh, India in the early 1990s. She used the money to open a wayside eatery and slowly moved up to own her own house and get her children well settled. Today SHARE has a clientele of more than 1.7 million spread across 16 states in the country, with a cumulative disbursement of Rs 4612 crore. Initiated in 1989, SHARE is the first MFI in India to obtain a Non-Banking Financial Company (Non-Deposit) licence and also to carry out a microfinance securitisation transaction. SHARE provides various financial products, including general loans, micro-enterprise loans, personal loans, housing loans and education loans, apart from health insurance and money transfer services. “We intend to cover 15 million clients in the next five years, thereby reducing their poverty considerably and also empowering them socially,” said Udaia Kumar, the founder of SHARE.

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