Bangladesh to Bangladesh, his main goal was to eliminate

            Bangladesh as a country is very
small, amounting about the size of Iowa, that lies east of India. It is home to
163 million people, in which 30% are below the poverty line and over half live
in rural areas. Following the years of liberation in 1974, Bangladesh endured a
major famine that left the majority of their people in starvation. It was this
famine along with the women he helped that influenced Muhammad Yunus to create
a micro-credit program in Bangladesh. During this time in Bangladesh, it was
very difficult for poor people to receive credit from formal financial
institutions due to lack of collateral, previous credit, and education. The
issue created between the poor receiving credit from formal institution resides
with the banks being unable to ensure repayment, which was proved to be wrong
by Yunus.  In Bangladesh, about 98% of
people, whom are mostly women, repay their loans within the required amount of
time.

When Yunus introduced microfinance to Bangladesh, his
main goal was to eliminate poverty, eventually creating a world without it.

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Throughout the years of microfinance, it has not made a significant impact on
the reduction of poverty, although it has made some strides in this category.

Microfinance has given women the opportunity to create their own businesses,
which in turn increases their overall income. Even though the increase of
income may be substantial and have a big impact on their family alone, it has
not provided enough to lift many poor families out of poverty. Microfinance has
effected poverty slightly, with the main impact being that of moderate poverty
versus extreme poverty. In a study done by Shahidur Khandker, he found that
microfinance accounts for about 40% of the reductions in moderate poverty in
rural Bangladesh (2005 pp. 22). Microfinance also contributes to poor families
obtaining more assets, which are critical for receiving financial help from
formal institutions. The lack of assets in poor families was a main concern for
the formal economy of Bangladesh. Without assets, the formal economy was unable
to take collateral, which was used to ensure that repayment of their loan was
made. Assets such as furniture, electronic devices, and clothing were acquired
due to the involvement of microfinance in rural Bangladesh homes.

            To continue, the microfinance
revolution has targeted women more than men.

At
the emergence of the microfinance revolution, the goal was to eliminate poverty
through dispersing small loans for entrepreneurial purposes. However, as
microfinance continued to grow, so did the number of women receiving loans, who
account for more than eighty percent of microloan recipients. The increasing number
of women using microfinance influenced the creation of self-help groups, a part
of the microfinance revolution. The creation of self-help groups was guided by
the evidence that women use their credit loans to contribute more to their
overall household, bring about change faster, and have a higher repayment rate
than men. Women who receive microcredit loans are more likely to use their
loans to benefit the entire family in terms of clothing, food, and education.

The self-help groups created from the microfinance revolution are groups of
people who gather on a regular basis to discuss problems, motivate each other,
and repay their loans. In Bangladesh, the use of self-help groups to empower
women is very important due to the lack of freedom women face. Women in
Bangladesh live under the patriarchal society in which they are homemakers and
the men are the money makers. In a patriarchal society, women may feel as if
their only purpose in life is to provide for their family, which is very
damaging on their overall confidence. Self-help groups in Bangladesh have
empowered women in boosting their confidence, improving their education and
skills, and pushing them to interact more outside of the house (Sreemany 4).

Another major accomplishment of self-help groups is the increase of women
decision making in the house, in which some women have joint decision making
and some are the sole decision maker, which was often unheard of in a
Bangladesh home.

            Another aspect of life in Bangladesh
that is impacted by microfinance is the increase of educational tools,
enrollment rates, and money available for the students. Pertaining to the
economic and human development of a country, it is very important that the
children receive an adequate education to contribute more to their country in
later years. As more families receive microloans, they are becoming aware of
the importance of education for their children. There is a large number of
groups, education loans, and scholarships that have been created from the
microfinance revolution to improve and increase the education rates of
children. In Bangladesh, it is not uncommon for children to discontinue school
due to lack of help from their parents. In an effort to control the rates of
dropouts, the Primary Education Strengthening Program (PESP) was created to
offer educational help and extracurricular activities to students around
Bangladesh. PESP now has 7,266 Learning Centres, each with their own mentor,
that helps students organize their lessons and complete their homework from
their school teachers (Roy and Biswas 2016 p. 106). Another program that has
stemmed from the introduction of microfinance is BRAC, or Building Resources
Across Communities. BRAC is not a strictly educational program, it contributes
to helping people in developing countries receive healthcare, loans, and human
necessities. However, BRAC is one of the largest microfinance organizations
involved with primary education in Bangladesh, accounting for more than 22,700
schools and 670,000 children enrolled within them (Roy and Biswas 2016 p 106).

This program focuses more on a non-formal system, providing education to very
poor, left out children, and children who have dropped out of school. BRAC also
has centers in which students can further their education on key issues in
Bangladesh, such as women’s rights. Other programs of microfinance also
contribute to the price of education, such as scholarships or loans. Providing
students with scholarships motivates them to continue their education and stay
up to date with their classes. Later on, students who succeed in their education
move on to higher education, where they will receive loans to help cover the
cost of tuition. Loans will directly affect the future of Bangladesh, as over
16,000 students have received loans to further their education in medical
schools, engineering, and other professional studies (Roy and Biswas 2016 pp.

107).

            One last important achievement of
the microfinance revolution is the creation of micro-insurance. Similar to
micro-finance, micro-insurance is health insurance that provides basic health
care to low-income families throughout the world for a lower price. In
Bangladesh, people living throughout rural areas have very little access to
health care. The lack of health care throughout this region results in many out
of pocket health expenses, which can quickly harm a poor family’s economic
stabilization. In Bangladesh, there is only about 26 doctors and 30 hospital
beds, per 100,000 people, of which majority are in urban areas (Werner 2009).

When the majority of Bangladesh lives in rural areas and are near, at, or below
the poverty line, access to health care becomes very limited. Micro-insurance
is targeted for poor populations, because they are more likely to fall ill due
to unsafe living conditions, they pay more out of pocket expenses, and natural
disasters can ruin their home, farm land, and village in an instant. Micro-insurance
has opened clinics throughout Bangladesh, all whom are staffed by medical
professionals. The medical care provided by micro-insurance allows for
low-income families to receive medical care such as immunizations, women’s
health care, and medicine for a low price. Only about seven million people
participate in micro-insurance, but it has positively impacted the lives of
these people by establishing a safe, secure health insurance for poor families
to rely on.

            In conclusion, the microfinance
revolution has created many opportunities for poor families throughout
Bangladesh. The very populated country, accounting for more than 163 million
people, is a very impoverished country in terms of the rural community. For
millions of struggling poverty stricken families, microfinance has created a
sense of relief in their everyday lives. For a woman living in Bangladesh, it
was often unheard of for them to contribute financially to the household
income. The use of micro-credit from microfinance institutions has given women
a sense of power back into their lives. They now contribute to house-hold
decisions, sometimes being the core decision maker, which is resulting in the
boost of confidence in women throughout Bangladesh. The use of micro-credit
also contributes to higher education rates of children, along with the many
organizations stemmed from the microfinance revolution. In Bangladesh, students
have access to educational programs such as PESP and BRAC, which impact their
overall learning experience and future significantly. Although the reduction in
poverty among poor families in Bangladesh has not been of great amount, many
families are taking steps towards the right direction by increasing their
overall income and number of assets with the help of micro-loans. The last
important impact of the microfinance revolution on Bangladesh was the
introduction of micro-insurance, a low priced health insurance that provides
poor families with necessary health care. All in all, the poverty rate of
Bangladesh still remains high, but the families using microfinance have
improved their overall life in many aspects. The involvement of microfinance in
Bangladesh has created remarkable accomplishments in low income families, all
due to the smiles that Muhammad Yunus received after giving $27 to multiple
women in need.