Successful Implementation of Microcredit in Singapore???

Microcredit came into the news recently when the Nobel committee decided to award Mr Muhammad Yunus (on the left) and Grameen Foundation with the Nobel Peace Prize for their untiring efforts to eradicate poverty in Bangladesh. The concept of microcredit hailed from CK Prahalad where he wrote at length on the topic "Fortune at the Bottom of the Pyramid". (click and read this for enlightenment on the FATBOTP).

Prahalad expounded that even the poorest of communities do present a big opportunity for businesses to consider reaching out to, so as to make these communities prosper, and at the same time, fatten their own coffers.

This concept, though on the surface seems outright unthinkable, yet if scrutinised thoroughly, will reveal that there are much to be gained by considering these "so-called" unattractive and unmarketable segment. I mean, even they need to meet their basic requirements of food and all other bare necessities. And if businesses were to open their eyes wide, they would also see that - at the same time fulfilling their moral oblication to humankind.

What if all the banks in all of the world, buy into this concept of FATBOTP? Why! Pretty soon all the poor communities would be eradicated! However, this concept goes against all the text-book teaching of loans as microcredit exists based on trust - no collaterals required.

However, there is a catch to the microcredit scheme - those wanting a loan would have to come as a group and of say 5. Loans would then be disbursed to the group and group pressure would force all members to make regular repayments. If just one member of the group were to default, the entire group would not be able to get a second loan until the first loan is repaid.

Not surprisingly, this microcredit scheme has proven to be very successful in its loan repayment performance! Reportedly reaching up to the high 90s%! That's even better than many banks can do!

Well, would this same concept of microcredit be able to work in Singapore?
I read about a group that's been doing this for some time now.
I say, there should be more groups sprouting out to do similarly.

Then slowly but surely, we would be able to eradicate the poorest, but equip them to do something useful, rewarding and self-fulfilling!

Hmmm... maybe i should look into this myself and gather some people who are keen and interested. I'm sure the many of the Family Service Centres would be able to locate families that may be interested to form groups to participate in this scheme!

What say you Singapore???! Comments please...



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