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Microcredit ‘hype’ debated afresh as Yunus launches £1m fundraising round for Europe’s first Grameen bank

11 March 2012
Photo of Muhammad Yunus

There is still more which can be done to harness these powerful ideas in a way that can better break through the entrenched poverty which blights many communities.

Nobel Laureate Muhammad Yunus has been busy launching a fundraising campaign to raise £1m to set up the first European branch of the Grameen bank – in Scotland.

The Grameen founder gave speeches in both Glasgow and Edinburgh explaining how the approach he has forged over decades in Bangladesh can also bring hope and prosperity to deep-rooted economic inequalities in Scotland’s poorest communities.

In an article in The Scotsman newspaper, Yunus said banks and lending institutions with an established social purpose ‘have a long tradition in Scotland’.

But he added: ‘There is still more which can be done to harness these powerful ideas in a way that can better break through the entrenched poverty which blights many communities.’

Meanwhile, one of the world’s most admired microcredit researchers, David Roodman, penned an article for The Washington Post, entitled "Microcredit doesn't end poverty, despite all the hype", about the other side of the microcredit coin. Providing loans to the poor isn’t always in their best interest, said Roodman, a senior fellow at the Center for Global Development.

Roodman’s well-known Microfinance Open Book Blog recently bore fruit in book form with the publication Due Diligence – An impertinent inquiry into microfinance. Written in public with input from readers, the book probes the truth about microfinance to guide governments, foundations, investors, and private individuals who support financial services for poor people. In particular, it advises a lesser emphasis on microcredit and a greater focus on other financial services for the poor.

Roodman’s analysis has attracted admiration as well as argument from Yunus and many others – with plenty of debate in the media.

Most recently, quotes from both Yunus and Roodman were incorporated into the March 11 edition of The World This Weekend, from BBC Radio 4, in an investigation by presenter Shaun Ley that was hooked to the new initiative in Scotland.

It’s well worth catching using the BBC Radio’s ‘Listen now’ service.

An article about the launch of Grameen in Scotland was also published in The Scotsman.

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