Community development and international aid

Community development and international aid

Introduction:
Not only is social enterprise something that can be applied to the developing world - it also has some of its roots there. The Bangladeshi economist Muhammad Yunus won the
Nobel Peace Prize in 2006 for his pioneering work on microcredit. During a famine in 1974, he famously lent a total of US$27 of his own money to forty-two poor people who were being kept in poverty by exorbitant interest rates and unfavourable conditions imposed by moneylenders; this small amount of money was enough to begin the process of getting them out of debt and out of extreme poverty. Overturning the conventional wisdom that poor people were not creditworthy, this act was also the seed from which the Grameen Bank and the larger Grameen family of organisations would grow. Grameen Bank has an exceptionally high repayment rate of over 98 per cent (which is higher than many commercial banks in Western countries), and many of their microloans are used to help poor people become
financially self-sufficient, by making and selling bamboo products, opening food stalls, buying mobile phones that can be used by other villagers for a small fee, and so on (Yunus 2007). Many of these projects have been replicated and adapted elsewhere: for example, RUMA, which is discussed in the case study 'Pt Rekan Usaha Mikro Anda (PT RUMA): A Successful Story of an Indonesian Social Enterprise' following this chapter; has adapted the mobile
phone project to low-income communities in Indonesia.

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