Small Loans: A Big Tool in Poverty Fight

Micro-credit Initiatives Hope to Help 100 Million Families

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ROME, MARCH 21, 2004 ( Micro-credit aimed at launching small businesses could be a big tool for combating poverty worldwide.

That was a conclusion of a congress held last week by Caritas-Italy to analyze the prospects of micro-credit, an initiative conceived in Bangladesh in 1976 by Mohammed Yunus, founder of Grameen Bank.

According to data presented at the congress and reported by Vatican Radio, 15 million people worldwide now benefit from micro-credit.

Institutions promoting micro-credit hope that 100 million families by next year will be able to benefit from this loans service to launch small businesses.

«Access to credit is a right of people who wish to define their own future,» said Marco Santori, president of Etimos, a financial consortium present in 30 countries.

With this help, people can define «the model of development in which they wish to grow,» he said in statements broadcast today on Vatican Radio.

«Unfortunately, the financial system imposes rules of exclusion,» Santori added. «Central American or African populations are not capable of determining their own process themselves. Micro-credit tries to be an instrument among many others to give dignity to these populations.»

Cecilia Graiff of Caritas-Italy, director of the Lhuwuka micro-credit project in Mozambique, cited an initiative that is helping 100 women in a parish on the outskirts of Maputo.

«We began thinking about the project after making an analysis of the situation with a group of widows of the parish,» Graiff explained.

The analysis detected «the tendency of African women [to form] small businesses and the need — in order to undertake these activities — of funding, support and formation,» the Caritas volunteer said.

«After a first pilot project, which involved 20 women, the community has now opened the project to all women, not only widows,» Graiff added. «There is evidence that with micro-credit the self-esteem of these women has increased.»

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