Grameen Bank and elimination of poverty

A question from Yahoo! Answers:

Are Grameen Banks the only sources of elimination of poverty?

The Grameen Bank was founded by the recent Nobel Peace Prize winner, Sir Muhammad Yunis (Bangladesh). This bank issues low scale loans (less than $200) with no collateral, towards those seeking to develop a small scale manufacturing unit or business. These banks observe an astonishingly high rate of return (more than 90%). The basic objective of the Grameen bank is to help the poor stand on their own feet.

Obviously, there have not been more significant ideas to help solve the problem of poverty. Are there any other ways to end poverty?

Unfortunately, Grameen is a manifestation of the problem, not a solution. Grameen is lending to the poor only because it has nowhere else to lend; commercial borrowers are assigned to the nationalized commercial banks that dominate Bangladeshi banking landscape…

Lifting out of poverty is possible (and has been done repeatedly in places as different as Sweden and Japan), but it invariably involves large-scale export-oriented enterprise. And large-scale export-oriented enterprise can only develop in a proper institutional setting, which, sadly, Bangladesh does not have. High tariffs, corruption in the customs, capital controls, dominance of nationalized commercial banks (in 2004, there were measly 28 private banks in a country of 135 million), corruption in lower courts, inconsistent or selectively enforced regulation, widespread abuse of power by law enforcement and military — these are harsh realities of life in Bangladesh… Until they change, poverty is not going anywhere…

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