BANKING AFFAIRS

Detailed explanation-1: -In 1998, the UN General Assembly declared 2005 the International Year of Microcredit in recognition of microcredit’s contribution to poverty reduction, towards achieving the Millennium Development Goals.

Detailed explanation-2: -Micro credit refers to credit and other financial services provided to the poor through Self Help Groups (SHGs) and non government organisations. The Self Help Groups are playing a crucial role in meeting the credit requirements of the poor by inculcating saving habits among the rural households.

Detailed explanation-3: -Modern microcredit is typically attributed to the Grameen Bank model, developed by economist Muhammad Yunus. This system started in Bangladesh in 1976, with a group of women borrowing $27 to finance the group’s own small businesses. The women repaid the loan and were able to sustain the business.

Detailed explanation-4: -Muhammad Yunus is often considered the father of microfinance. In 2006, he won the Nobel Prize for his “efforts through microcredit to create economic and social development from below.” In this TED talk, Yunus describes his experience with microfinance.

Detailed explanation-5: -The evolution of microfinance in India can be traced back to the 1800s. This is when small credit to entrepreneurs and farmers were used to help people emerge out of poverty. Microfinancing was first used in 1970; at the time of the development of Grameen Bank of Bangladesh.