Helping the poor to help themselves: The United Nations has named 2005 the Year of Microcredit-referring to small loans that assist developing countries--and Switzerland is jumping on board. Swiss News takes a closer look at how these loans are helping poor countries as well as Swiss entrepreneurs.
| Auteur | Mirza, Faryal |
| Fonction | Money |
Microcredit refers to a small amount of money which is loaned to a client, often without collateral. In the developing world, these sums have given a financial leg-up to half a billion people, and have gone a long way to alleviating poverty. The resulting so-called 'microenterprises' account for 80 per cent of all businesses in those countries. Switzerland is marking the year by encouraging private investors to take a closer look at offering these loans.
Moreover, microcredit is not restricted to the developing world--entrepreneurs in Switzerland are also borrowing.
What all microentrepreneurs have in common is the lack of access to mainstream financial services. Banks are frequently not interested in lending money to clients who cannot provide any surety.
Banking on good faith
For people with a business dream in Switzerland, who are unlikely to qualify for a loan from conventional sources, help is at hand and it need not come from a shark. They can turn to the Association Solidarite et Creation d'Enterprises or ASECE based in Lausanne. ASECE is the brainchild of Georges Aegler, who was inspired by the inventor of microcredit, the Bangladeshi Professor Muhammad Yunus.
Yunus returned to his country of origin in 1974 after working many years in the United States. Two years later, he came up with an idea to help Bangladeshis below the poverty line to become self-employed. Put simply, the concept was to lend small amounts of money without demanding collateral, to individuals belonging to at group of borrowers, which would be paid back in regular instalments. Thirty years later, the Grameen Bank, as Yunus' organisation came to be known, has 3.7 million borrowers, 96 per cent of whom are women (as at July 2004). The repayment rate stands at an astonishing 98 per cent.
Payback
Aegler, a retired Swiss industrialist, took a leaf out of Yunus' book and adapted it for the Swiss market. Shocked by the inability of the cantons to create a sufficient number of jobs for the unemployed, Aegler decided to set up his foundation in 1998. He believes firmly that people can be helped to help themselves.
"The majority of men and women, regardless of what kind of education and experience they have, possess the necessary energy and the professional knowledge required to become self employed, especially when they receive advice and support from the beginning," Aegler says.
Since its inception, ASECE has helped to create almost 200 jobs by financially supporting...
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