• we have a ‘crisis’
• the State needs to cut spending
• home repossessions and bankruptcies are rising
• we discover that bankruptcies and repossession are illegal and unlawful and more victims of financial, legal and judiciary exploitation
• and a Bangladeshi has to show us how ‘proper banking’ has to be done – for the real people in the real economy.

This article in The Independent describes the opening of a branch in Glasgow.

However, I wouldn’t hold my breath.

The German Ministry for Economic Cooperation and Development has now asked the Development Bank KfW to provide a fund of $m 130 to alleviate shortfalls for microcredit institutions.

The Minister for Development said: “We have to make sure that those who contributed least to the crisis, don’t suffer from it the most.”

“We are doing subprime lending, but we are doing it right,” this is one of the quotes from this article that appeared in the Guardian on January 26, obviously also referring to Dr. Yunus and Grameen.

Ah Ha!!! This guy is on to something. I now have another link to add to the “Get Involved Links” Curtis Stephen from the New York City paper City Limits introduces us to Darryl Penrice.

Darryl Penrice likes to talk. His preferred topics of conversation can roam anywhere from the music of the late rapper Tupac Shakur and the murky underside of politics in America to the mechanics of microeconomics. But if there’s one subject that the 32-year-old Brooklyn resident and self-professed “ghetto prodigy” loves to discuss more than anything else, it’s a vision of a new way to fight poverty that he’s obsessed with making real.

For the past year, Penrice has been anything but silent about his proposal, meeting with an assortment of potential investors, city officials, nonprofit groups, college students and major grant-making institutions. In the midst of an outreach campaign, Penrice has been trying to earn support – especially the financial kind – to transform the website that he’s created from a prototype into a full-scale, anti-poverty platform that he contends will have a significant impact in the lives of people experiencing economic hardship in New York and well beyond. “I know what I have,” Penrice declares. “I’m not the most religious person in the world, but if God gave me a gift then I’m going to share it. This is something that can feed millions of people.”

Penrice plans for his initiative – an interactive website called Poverty’s Demise.org (or as he calls it, “PDO”) – to combine the open source atmosphere of Craigslist with the opportunity-expanding aims of Kiva.org, which allows for “microfinance” lending to entrepreneurs in developing countries. But in many respects, if Penrice’s ambitious plan ever goes live, it will launch an unprecedented Web-based undertaking.

Penrice envisions PDO as an outlet for person-to-person financial transactions in which donors help economically disadvantaged individuals – who have been screened and approved for participation – and struggling working-class families pay for essential daily living expenses, including everything from food and rent to utility bills and child care costs. Under the proposal, which Penrice details extensively on his website, the tax-deductible donations would be sent to recipients in the form of “universally redeemable” bar-coded certificates to be exchanged at participating retailers and service providers for specific goods and services. Incentives are also provided to both donors and recipients for volunteerism, and the purchase of healthy food and environmentally-friendly products.

The PDO model would also help to ease the burden faced by those on public assistance and seniors, both of whom are subjected to often-frustrating bureaucracies, Penrice charges. “The government is spending billions right now, but nothing is being done to fix a system that isn’t very efficient,” he says. “A lot of people are against welfare, but how can we tolerate a society where people who worked for 40 or 50 years are forced to choose between their medication or groceries?”

As he seeks to create a high-tech community-oriented platform that circumvents government and nonprofit social services, Penrice is clearly aiming big. He’s hoping to land an investment of $4 million to make an initial run. In addition to setting up an office, hiring programmers and sparking the first wave of donations, Penrice plans to focus on New Yorkers in need before branching out nationwide. One endeavor that Penrice hopes to launch through PDO is a program he calls Broader Horizons, where disadvantaged families are sent abroad. “Can you imagine taking a kid from Bed-Stuy and dropping him off in Japan for a week? The problem with generational poverty is that Dad is in jail, Mom is smoked out, and you think the whole world is a ghetto.”

“Strongest takes all” can be replaced by rules that ensure the poorest have a slice of the action is another Yunus quote from the same article.

Enjoy reading the whole story!

I don’t understand why it’s a surprise to the press and to financial observers that microcredit is still lending lots of money despite the global financial credit crisis.

Microcredit is not phony, it’s not a dishonest way to drum up money for a big financial corporation. Microcredit doesn’t give people money then adjust the rate on the interest. Microcredit doesn’t sell the risky loans to someone else to try to further profit on them.

Microcredit also makes loans to people who pay them back. They generally don’t make loans to greedy people. Microcredit makes loans to people who are just trying to better themselves.

In fact, the only way microcredit has been hurt is by less money coming in from these big financial institutions that were making these other phony loans. They were only were trying to get into loaning to poor people because they saw the profit margin there. This may well help microcredit in the long run.

Anyway, Time magazine interviewed the head of Women’s World Banking, Mary Ellen Iskenderian, to ask her about this microcredit “phenomenon”
TIME: To what extent and in what specific ways is the worldwide credit crunch impacting microfinance in developing countries?

Iskenderian: There is evidence that microfinance is resilient to global market movements, compared to traditional lending, as it falls outside of the mainstream economy. And there does still seem to be equity available for microfinance; recently, for example, a couple of large private equity deals were completed in India. Repayment rates remain very high, 97% or 98% in many places. That results from good, old-fashioned credit methodology — you know a household’s capacity to repay. That’s the kind of old-fashioned banking that some people feel was absent in this latest round of banking disasters. At the same time, we are seeing many microfinance institutions (MFIs) scaling back expansion plans and, in some cases, raising interest rates as a result of the credit-spread increase and the rising cost of borrowing. Certainly, no one is taking their existing funding relationships for granted. My concern is that we have only begun to see the effect of the triple threat of finance, fuel and food issues on microfinance.

TIME: To what extent have the global economic challenges trickled down to impact the poorest of the poor?

Iskenderian:The impact on the poor, including the clients of our network, has probably been most evident in rising food and energy prices, which have meant that families may face trade-offs like the choice between paying back their loans or putting dinner on the table for their families. Microfinance doesn’t target the poorest of the poor, as they need other types of intervention. It targets the economically active poor at the bottom of the pyramid. There are signs that micro-entrepreneurs will see higher interest rates, since the global credit crunch will likely require MFIs to raise interest rates as funding becomes more scarce. I am particularly concerned about the ramifications for women since, for many poor women around the world who are otherwise excluded from formal financial systems, access to microfinance is their only economic lifeline.

TIME: What prompted the development of a financial instrument like micro-insurance, and what’s the broader impact of new financial instruments aimed at the world’s unbanked?

Iskenderian: Product diversification came out of a recognition that lending alone is not the solution if our end goal is long-term poverty alleviation, which is why we in the industry no longer talk about microcredit, but microfinance. Many entrepreneurs in the developing world are only one seemingly minor catastrophe — like a hospital stay — away from financial disaster, so housing loans and insurance and savings products help create and preserve assets, leading to broader benefits for the economy as a whole. I can’t tell you how many times I’ve heard women clients in our network ask, “Why can’t I save for my child’s education, instead of taking out another loan to pay for it?” The poverty alleviation benefits are magnified when microloans are supplemented with savings and insurance products.

A Project like Tweetsgiving is an example of how a charity can use social media platforms, in this case, twitter, for fund raising. Imagine being able to raise US$ 10,000 in a 48 hour period from hundreds of people who contributed $5 and $10 dollars whose only connection with a charity was when they discovered the fund raising efforts because of one of their friends on twitter?

Imagine what can be done with more established charities. I believe micro giving promoted on social media networks can have a positive impact on fund raising in the weeks, months and years ahead. Not-for-Profits should take note of this and the work of : Beth Kanter, Rebecca Bollwitt, Stacey Monk and others who are pioneering this field as they can benefit directly as they discover and learn how to properly leverage social media and the passion people have for their respective charities.

The language is simple and at humane level, it is wonderful to hear about groups of 8,000 business owners acting as mentors for new businesses in USA.  Hopefully many of them will be social businesses in health care where difference made can be immense.