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Vote Today for Real Change |
Written by Chris Honess
on Tuesday, 09 February 2010
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Grameen America is a microfinance nonprofit organization that provides loans, savings programs, credit establishment and other financial services to entrepreneurs living below the poverty line in the United States. Grameen America has given out loans to over 2,000 borrowers living below the poverty line to start small entrepreneurial enterprises and has maintained a 99% repayment rate.
What can you do to support this change that has made such a huge impact in America? Simply vote for Grameen America in the Change.org national competition.
(Job Creation for Poor Americans Through Microloans)
** Important - After you vote, you will receive a confirmation email with a link to confirm your vote. After opening the new page - be sure to click "VOTE" again to ensure that your vote counts!
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Written by Alice Geglio
on Tuesday, 29 December 2009
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Over a quarter of the US population is un- or underbanked, according to a study by the FDIC. 60 million adults do not have adequate access to simple banking tools such a checking account or a fair loan.
During the past year, the FDIC teamed up with the US Census Bureau to conduct the most comprehensive study of the unbanked and underbanked populations in America. This is the first time that such data has been available on state and national levels. The study, released this month, provides insight into the number of underserved residents, who they are, and where they live.
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Fraying Safety Net Leaves Very Poor Vulnerable |
Written by Malorye Allison
on Sunday, 05 July 2009
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Social Security, food stamps, and similar programs aren't helping as many of the poorest Americans as they used to, according to a new study from the Center on Budget Policy Priorities, the New York Times reports. The poorest Americans are usually single mothers, who often have difficulty finding adequate day care even if they can find a job.
The Welfare system was reengineered, starting in 1996, to encourage poor people to try and get jobs within at least two years of accepting aid, rather than guarranteeing them support for as long as they need it.
Now, a growing number of people need aid, and it is much harder for anyone to find a job. The federal stimulus package is temporarily expanding programs such as food stamps, child tax credits, unemployment benefits, and housing and tuition aid. But much more aid will be needed to support the growing numbers of "very poor" that the economic crisis is creating.
Perhaps, in addition to hand outs, the U.S. should consider expanding microlending programs such as Grameen America's? Grameen Bank has demonstrated that all around the world, poor people are capable of building solid enterprises that can sustain their families if they are simply given access to capital (i.e. money) at a reasonable rate.
Grameen Bank has nearly 8 million
borrowers and disburses more than $100 million each month in micoloans while
maintaining a remarkable 98% repayment rate. Grameen America’s loans
are about $1,500 to $2,000 on average for 1st time loans. The
basic model is, however, remarkably similar to what was started in Bangladesh: small loans at reasonable low
interest, and a close communication with other borrowers and their
“banker” lead to remarkably high repayment rates, usually topping 98%.
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Giving Asset-Poor Americans the Incentive to Save |
Written by Jenene Allison
on Friday, 03 July 2009
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In June 2009 the Massachusetts Asset Development Commission issued a report about ‘asset-poor’ people in the state. This term describes people who would lose their households in less than 3 months if they experience a sudden loss of income or a catastrophic medical emergency. Asset-poor people work—but they work at low-paying jobs and have no assets: a savings account or a car. For these families survival depends on assistance such as food stamps because the breadwinner does not bring in enough money to cover food and shelter.
Ironically the state’s requirements for receiving aid may actually prevent people who are asset-poor from ever getting out of poverty. The Commission found that people who are just surviving by working at low-paying jobs while receiving aid from the state “face substantial barriers” to saving up in order to build some type of cushion against the sudden loss of income.
The report concludes that “income and asset restrictions on state programs make it harder for families to develop assets, and can even create disincentives to save or find a higher-paying job. Many families lose their eligibility for transitional assistance or education programs once they’ve built even an extremely low level of savings.”
Responding to the Massachusetts Asset Development Commission’s report the Boston Globe ran an editorial entitled “How not to help the Poor” arguing that it makes no fiscal sense to penalize people receiving state aid when they try to save money or buy a used car in order to commute to a better-paying job. The goal should be “to help people climb out of poverty, not keep them cycling through.”
That editorial makes a good point—but how, then, do you help the poor?
One model, which has been successful with over 7 million people in over 30 countries, is the Grameen Bank’s microlending process that was created in Bangladesh by Nobel Prize laureate Professor Muhammed Yunus in 1983. In this model, very small loans are made to very poor people with no collateral so that they can start or expand a small business. This model has now expanded to the United States with the establishment of Grameen America . A key difference between qualifying for state aid and qualifying for a Grameen America loan is that for the latter a savings account is a requirement, not a hindrance.
The savings accounts starts out small, $2/week, but maintaining it is a requirement for the loan to remain in good standing. For most women who qualify for a Grameen America loan, this savings account is the first bank account of any kind that they have ever had.
The idea is to help those who are asset-poor create assets so that they have a cushion in case of a sudden loss of income. Similarly, the goal of the loan itself is to help people work their way out of poverty rather than “cycling through” it by supplementing their income with revenue from a home-based business such as in-home manicures, catering, or a small mobile business like carpet cleaning.
Grameen America has two sites open so far: Queens, New York City, and Omaha, Nebraska. Plans are underway to open another site in Boston, MA. For the poor, starting and maintaining a savings account can mean the end of living hand-to-mouth, and the beginning of financial independence.
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