Entrepreneurship is essential to reduce unemployment. And the initiatives often come from innovative individuals, very often even from the unemployed, but who do not all have the means to borrow significant sums to launch their projects, nor banks ready to support them. In response to this situation, the micro-credit organizations have multiplied in recent years in the world and in France.
The objective of all these initiatives is to satisfy a demand for financing from people normally excluded from financial circuits and thus to play a role in reducing unemployment and therefore poverty. But is micro-credit an effective weapon against unemployment?
Microfinance – The adage is right: you only lend to the rich
The problem with banks is that they only lend to those who already have money. As the actor René Bergeron once defined it, a banker is a “Helpful man who lends you an umbrella when the weather is nice and asks for it when it starts to rain. »
Caricature aside, it’s actually very difficult for someone who doesn’t have real estate or a well-stocked bank account to get a bank loan to start their own small business. Moreover,banks don’t like to lend small amounts, because management fees do not generate a profit. Managing 100 customer accounts of 1,000 euros generates about as much profit as a single account of 100,000 euros, but involves a hundred times more work and a lot more management costs.
To enrich us all, let’s lend to the poor!
For a long time, economists like Friedrich von Hayek or Joseph Schumpeter of the Austrian School of Economics have advanced the idea thata prosperous economy requires distribution of money across the population. When too many are destitute or have to resort to loan sharks to finance their projects, society as a whole is impoverished.
Since the 15th century, when Franciscan monks invented pawnshops, various attempts have been made to remedy this problem: cooperative savings and credit societies in the Rhineland or even mutual organizations such as Mondrag cooperativeswe in the Spanish Basque Country.
In the 1970s the economist Muhammad Yunus develop the Grameen Bank in Bangladesh to provide the poor with the means to create their own employment and to help pool the risk associated with loans.
> Next: Micro-credit, macro-trend
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