Microloans-Transforming lives one loan at a time

Saskia McIntyre

Age 10

St Columbkille's Catholic Primary Corrimal

What are microloans? How will they help those in need? Who came up with this idea? These are some of the things you are probably wondering right now. So I will start at the very beginning. Muhammad Yunus, the creator of the non-collateral, low-interest microloan to support poverty, originally loaned $27 in 1976 to a group of 40 basket weavers just outside his university in Dhaka, Bangladesh. He then started an unofficial bank called Grameen Bank, which loaned out money to people who were worse off in society. The bank then became official in 1983, and to this day loans a total of 25 billion dollars to 100 million borrowers. That’s 250 dollars each! But not all loans are the same amount of money. Some people might need 1000 dollars, some people only need 100. These loans continue to transform the lives of people all over the world, in continents like Africa, Asia and even Latin America.

If 200 dollars was loaned over 2 years for a housing loan, the borrower would have to pay 16 dollars (8%) extra. There are different interest rates for different loans though.

There are four interest rates for loans from Grameen Bank : 20% for income generating loans, 8% for housing loans, 5% for student loans, and 0% (interest-free) loans for Struggling Members (homeless).

I hope you now agree that microloans are transforming lives, one loan at a time.