Church Keeps Microcredit Project Going in Bangladesh

But Loans Aren´t Enough; Education Has a Role Too

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DHAKA, Bangladesh, NOV. 27, 2001 ( The Catholic Church in Bangladesh has kept afloat a microcredit project for the indigenous populations.

Since 1996, Father Giulio Berutti, missionary of the Pontifical Institute for Foreign Missions (PIME), has coordinated the credit unions, or microcredit cooperatives, in the Diocese of Dinajpur.

«Our indigenous peoples live in a subsistence economy; they do not think of the morrow; when they are in need, they acquire a sack of rice from usurers and remain enslaved for life,» the priest told the Italian newspaper Avvenire. «This impedes the formation of capital and development.»

Because of this, missionaries in the past, and the local churches today, formed credit unions for the local peoples. In every mission there is a credit union commission, presided over by the parish priest and made up of a representative from each Christian village.

The credit cooperative aims to encourage savings and place them at the disposal of others when necessary. Loans must be repaid — something unknown in the tribal culture of Bangladesh, one of the world´s poorest countries.

So solidarity among the poor takes on a new dimension and serves to foster development. Having to save 8 to 10 takas (20 cents) every week to pay back a loan is an important cultural leap.

The project was launched in this diocese in 1997 when Mani Tese (Open Hands), an Italian Christian nongovernmental organization, decided to finance the salary of employees who meet with villagers to learn their needs.

Father Berutti meets every month with these agents to study the problems.

«In seven or eight years we have accumulated a social capital of $113,000, a notable figure in Bangladesh,» he told Avvenire. «Open Hands´ initial investment has given fruit and the cooperative continues to expand; there are always new villages that want to join us.»

«Our credit unions are not self-sufficient yet, because we do not charge interest rates of 25-30% as the banks do — usurers, 100% — but only 10-12%,» the priest explained. «Moreover, at the end of the year, we distribute the earnings among those who have deposits.»

«In total, there are 20 full-time employees and the credit unions will be self-sufficient when we have enough deposits to pay the employees,» he added.

The missionary acknowledged that the initiative would not have lasted without the help of Open Hands, which will pay employees´ salaries for at least the first five years.

A total of 259 villages, with 8,707 associated families, participate in the Dinajpur Diocese credit unions. It´s a start in a nation of 131 million people who live into an area smaller than the state of Wisconsin.

«The secret of success is in education — courses, meetings, discussions, diocesan meetings are constantly held — and in control and supervision,» Father Berutti said.

«The habit of spending is strong: vital necessities, pressures from the family, parents, and friends is often irresistible,» he concluded. «If a local is left alone, in no time he returns to his former way, spends it all, and remains with nothing. The mentality and customs must be changed. The work for development is long term, because it is based on education.»

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