Microcredit Revolution in the MiddleEast?

I hope I’m not too late in blogging about it, but I read an interview of Dr Yunus, which assured me that potential of Microcredit in Middle-East is recognized well! Read the full interview and support article from Gulf News.

A few key points from the coverage are as follows:

1. One of the ways Microcredit net was expanded was through “Word-of-mouth” marketing: you hear your neighbors benefiting from the scheme, and decide to enter the scheme yourself. (I feel same process will succeed in this region too, esp. among worker class)
   
2. Initially the scheme was never thought out on a scale it is done today. Dr Yunus just kept on finding solutions arising out of day-to-day field problems and it kept on getting better
   
3. Jordan is the first one to set up a Microcredit company, (JMCC) – launched by Queen Rania with Dr Yunus on the advisory board. Egypt (Al Tadamun, RADE) and Yemen are also introducing the scheme as a part of their poverty eradication strategy
   
4. Good news is that KSA (through PFP) – the largest among GCC countries - will also see Microcredit being implemented in certain areas soon. “Grameen Trust” organization is ready to support any initiatives in any other GCC / Middle-Eastern countries
   
5. Conventional Banks can also open the doors to the poorer borrowers (a point that I raised in my previous post below), by framing supporting rules. However this will lower their profit margin – benefiting the have-nots.
   
6. Remittance business is an area where Grameen Bank would be interested to enter. This perhaps would reduce dependency on non-banking modes of money transfers (that I talked of before)
   
7. Although Libya, Malta and 6 GCC countries have highest per-capita income (~ $4000) there are 12 other active / potentially active World Bank borrowers, with per-capita incomes between $330-2,870.

I feel Microcredit scheme could really change the face of economic reforms in all the WB borrowing / non-borrowing countries. It all depends how the potential of the scheme is recognized and implemented in each economy.

One other point worth musing about is that except KSA, all other GCC countries are very much dependent on expat workers for the growth of their economies. Majority of these workers are from developing Asian economies. Therefore is it possible to have any significant change in economic outlook, should microfinance schemes are allowed to operate among these workers? Does it also improve the forex outlook of the parent countries of these workers?

I guess I need expert / specialist opinions from the blogosphere…

Some more useful Links on Microcredit:

1. Business loans for Jordan's impoverished women
   
2. Egypt: Combating child labour through micro-credit
   
3. Best piece on what we know about micro-credit
   
4. Nobel Peace Prize announcement story in NYT by Celia W.Dugger (2006)
5. Article and case study on whether Microfinance really work (Indian story)
6. Hal R. Varian’s Commentary in NYT on the economics of Microcredit (2001)

Technorati :Microcredit. Dr Yunus. Expats. Remittances. GCC. Middle East