Microcredit refers to programs committed to providing credit to the poorest of the poor throughout the world. This includes the poorest 20% of the population that shares 1.4% of the world's income.

The concept of microcredit was founded by Professor Muhammad Yunus in Bangladesh in 1976 when he started Grameen Bank. Grameen comes from the Bangla word gram meaning village; hence village banking. To meet the initial capital requirements for the first village in order to purchase materials and work freely, 42 people needed about $27. Professor Yunus lent them the money – since no commercial bank would lend money to people who don't have it – and they paid it back. Now there are millions of microcredit borrowers throughout the world.

Why are microcredit loans primarily benefitting women?

Microcredit is targeting women because 92% of a woman's income will be reinvested in food, shelter and education for her family; in many regions, only about 40-50% of a man's earnings will reach his family and often as little as 10%.

A loan of $4 to a landless and homeless woman in Nepal resulted in a home and education for her children within a short time. She bought a comb, a mirror and a pair of scissors and put her husband in business as a barber.

What is the repayment rate?

Across geographic and cultural boundaries, the world's poorest borrowers have maintained a repayment rate of 95% or better.

Microcredit views people as clients, not beneficiaries and it seeks to provide them with the means to support themselves through dignified self-employment. Regular meetings and group support contribute to the outstanding repayment rate.


How is Rotary connected to microcredit and how can you get involved?

Rotary has been funding microcredit programs throughout the world for years. District 5340 pioneered an effort called Mobilizing Rotary for Microcredit (MRM) more than a decade ago. Clubs initially came together to form MRM which funded a project in India during 2003-04; four international projects in Afghanistan, Ecuador, Zambia and South Africa and one local San Diego project during 2004-05; three international projects in Ecuador, India and Niger and the San Diego project in 2005-06, and five international project in Zambia, Sri Lanka, Liberia, Uganda and South Africa and the San Diego Project in 2006-07. Since then, MRM has partnered to fund microcredit projects in Ghana, Mexico, Ecuador, India, Liberia, and Indonesia. These projects are done in coordination with other clubs and districts across the globe.


You and your club's participation are welcome and needed. Please email Deborah Lindholm of La Jolla Sunrise Rotary deborah@foundationforwomen.org for further details.