Dhaka, Jan 28 (ANI): Experts have rejected a US-based Microcredit Summit Campaign study that claims that work by the Grameen Bank and other institutions involved with microcredit, helped many Bangladeshi families to raise their incomes above 1.25 dollars a day.
The BBC quotes the study as saying that despite the 1998 floods and the 2008 food crisis that caused millions of families to fall below the 1.25 dollar threshold, Microcredit helped nearly 10 million people to rise above poverty level."This survey reminds us that even in difficult circumstances, major progress can be made," Alex Counts of the Grameen Bank said.
The study has come after a recent criticism of microfinance, which works by providing small loans to people to invest in generating their own incomes.
Some experts have criticised the findings, saying it has missed out on actual facts.
Dr Qazi Kholiquzzaman Ahmad, the Chairman of the Palli Karma Sahayak Foundation (PKSF) that loans money to microcredit agencies in Bangladesh, said his studies in 2006-2007 showed that only seven percent of micro-borrowers were able to rise above the poverty line.
"In this latest study, only ten percent of people have moved up, leaving the other 90 percent where they are. We cannot conclude that a whole lot has been achieved," he added.
In the recent past, serious charges have emerged about microfinance borrowers taking on multiple loans and too much debt, coercive collection practices by microfinance staff, and even suicides among borrowers who were unable to meet their payments.
India's multi-billion dollar industry was on the brink of a mass default until all major banks in the country agreed to continue lending to microfinance firms. (ANI)