"Small Loans, Big Dreams: Microfinance A Pathway to Financial Independence for Women Entrepreneurs"

Tanvir Mahmud

“Loans are better than charity to interrupt poverty?”

?A World of Three Zeros by Novel Peace Prize Winner Dr. Muhammad Yunus

Zero poverty, zero unemployment and zero carbon emissions. In this world everyone has access to financial opportunities, entrepreneur?create jobs and sustainability maintains a healthy planet.

To begin with, what is microcredit, and how does it work? Let’s hear the story of Amrapali, a poor farmer who lived in a village where women were entirely dependent on the male members of their households—even for small tasks like mobile recharge—and had no access to loans or financial services. How is she supposed to improve her financial condition and take out loans if she doesn’t even have anything to offer as collateral?

Dr. Muhammad Yunus’s microcredit model, a groundbreaking approach to give financial services to the underprivileged, especially those who don't have access (Mostly women) to conventional banking systems. Microfinance, also called microcredit, is a type of banking service provided to low-income individuals or groups who otherwise wouldn't have access to financial services.

It is differing from the conventional banking like microcredit doesn’t require collateral or any mortgages as security for loans. The loans sizes are normally smaller and it’s a trust-based lending rather credit history. The loan system is basically step by step incremental loans. So, the borrowers initially receive a small portion of loans and the

upon the successful repayment borrowers can access higher sums in later cycles. This incremental increase in loan size lowers the default risk and promotes discipline. Unlike traditional banks, which prioritize profit, the concept encourages social development in addition to financial services.

These programs give people the chance to engage in business or agriculture, which generates income and helps them settle debt. Since many borrowers can't provide collateral, microlenders often group them together. After getting their loans, they repay them as a group. This way, everyone works together to make sure the loans are repaid, creating a sense of shared responsibility that helps ensure repayment.

Beyond just providing the loans the Grameen model pushes borrowers to follow a set of social values called the "Sixteen Decisions," which include pledges to social justice, health, and education. The goal of this emphasis on holistic development is to raise the borrowers' and their communities' general standard of living.

Grameen Bank’s interest is one the lowest across the world. Since its inception, Grameen Bank has disbursed $36 Billion collateral-free Microfinance loans to more than 10 million borrowers, of which ninety seven percent are women. The Grameen Foundation oversaw 42 initiatives in 13 countries in 2022, the most of which were aimed at assisting women and girls in gaining access to financial services, chances for climate-smart agriculture, and assistance with their general well-being.

Based on an earlier Amrpali tale, She was able to create her own business, obtain loans, and become financially independent thanks to microfinance. As she exemplifies how accessible financial systems can empower women and change communities, Amrapali has emerged as a hero in her village. The idea that loans, rather than charity, are a better way to break the cycle of poverty because they provide people the chance to start their own businesses or engage in agricultural or business ventures, which generate income and help lower debt.

According to Dr. Yunus, “Making money is a happiness. And that's a great incentive. Making other people happy is a super-happiness”.

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