Mini loans to be handed out in Africa

Bombay News.Net
Friday 16th May, 2008

Impoverished borrowers in Africa and Asia will soon be able to receive so-called “tiny loans” from the World Bank and British-based bank Standard Chartered.

While Standard Chartered, a commercial bank, is already dabbling in microfinance, the new initiative with the Washington-based World Bank will enable it to boost its existing programs.

Standard Chartered chief executive Peter Sands has said the transaction will unlock more funding for microfinance to catalyse broader social and economic development.

Few people had heard of microcredit before a determined Bangladeshi economist called Muhammad Yunus won the 2006 Nobel Peace Prize, and put the growing industry in the spotlight as a potential poverty-busting tool.

Microcredit involves tiny loan that is granted to a poor person without collateral on the basis that they will use it to expand a small business, such as a food stall or clothes-mending enterprise.

Loan sizes vary, but the average loan is around US$100.

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