Micro-Credit Programs Are Not The Answer To Jamaica’s Poverty! Can The Cart Lead The Horse?

Recently Ronnie Thwaites quipped on his radio show. “I do not know why someone does not invite Mohammed Yunus (Nobel Peace Prize winner last year), to Jamaica. We certainly can learn from his micro-credit program.” The perception has been spread like a butter on bread that micro finance programs will lift Jamaicans out of poverty as Chris Burns wrote in the Observer last year “The Grameen Bank That’s The Solution To Poverty! But is it really?

Yunus and the Grameen Bank in Indonesia have run a micro-credit program which is supposed to have lifted large numbers of Indonesians out of poverty. For this he won not the Nobel Prize for Economics, but for Peace!

Winning the Nobel Prize does not indicate the finest current achievement in any area. It often indicates the most public, well known and the current bias of the Prize selection committee! For example, in my opinion, Khaddafy for abandonning his nuclear weapons persuits, a significant gesture, should have won the nobel peace prize that year; he did not!

Note though that Yunus won the Peace Prize and not the Economics Prize! This is a very important point to make! It is amazing how many persons missed this implicit messages! No one said that the Grameen Bank or any other bank does not do some good or does not offer a vital service, but it is fallacious to say that because something works at place A, that the same thing should work in place B, without examining the underlying reasons why it worked at place A. Copying techniques and programs without indepth study does not indicate a sound scientific approach!

In addition, one has to define what one means by poverty! Poverty in the USA and Jamaica and Bangladesh are not the same. So those Bangladeshis who have raised themselves out of poverty, according to the standards of many countries, are still poverty-stricken! This is not to denigrate their new status but it must be viewed in perspective and should not be called the solution Jamaica needs!

Again, small micro loans will work to some extent in some economies which are still undeveloped because many untapped opportunites exist. After a certain level of development is achieved, micro loans are useless-period! For instance micro loans would be useless here in the USA to lift citizens out of poverty because the level of poverty in the USA is not the same as in Bangladesh and the many opportunities that existed in Bangladesh, like renting out cell phones to citizens who cannot afford to buy one, are not applicable to the economy of the US!

Micro loans are therefore useless if markets are unavailable! For the most part local markets in Jamaica for most consumer products,are saturated and micro loan programs will not permanently raise many citizens out of poverty! The Grameen Bank says they have a 99% repayment rate. Well, I would not take their word for it. You can if you want. But say they have. This 99% repayment rate should be viewed against the background of the country-Bangladesh. Is there something culturally distinct to Bangladesh why there is such a high repayment rate? That is a key question to ask.

One does not eliminate poverty by giving loans without education! We tried that in Jamaica decades ago. Do you know how many hundreds of millions of dollars the agricultural credit bank wrote off as bad loans? Micro loan proponents seem to have short memories! Giving loans without mandating requisite education is equal to putting the cart before the horse something we are great at doing!

For all of the success of the Grameen Bank and others, 18,000 farmers committed suicide in India last year because they could not repay micro loans!

Let us be honest and say what we really want a micro-credit program in Jamaica for. It is nothing but to satisty the overpopulated masses who are overwhelmed by the media blitz which has brainwashed their weak minds to waste their precious resources on useless consumer items! A micro-credit program is supposed to keep these weak minded persons busy so they do not have time to make trouble! Be honest; it has nothing to do with raising anyone out of poverty!No one on the island as far as I am aware, is willing to tell the masses the truth about how to eliminate poverty!

1. Teach the people the importance of sacrifice and delayed-self gratification. The minds of the poor is weak and hence they are prime prey for advertising programs. Their self worth is very low and so they do almost anything to raise their self-worth. Hence you see hundreds of thousands of Jamaians wasting their money on cell phones when they should be saving for the college education of their children or for their retirement.

2. Teach the people the importance of saving. Instead of buying items to boost self-worth the poor should be saving their money.

3. Teach the people the importance of education. In today’s competitive world education is a must to break the poverty cycle. Turn off the cable television and save the money for school fees!

4. The poor must be taught to give. You will never appreciate a thing to the highest level until you learn to give it away. What ever one gives one keeps. This is philosophical stuff which I will not get into here but it is a proven spiritual principle!

5. The poor must be taught that having children out of wedlock and or unprepared leads to poverty! Jamaica is obviously overpopulated and while no one wants to talk about it, the actions that lead to this overpopulation is devastating us!

6. The poor must be taught that crime leads to poverty; not that poverty leads to crime! Demostrations, locking down school property because of dissatisfaction as parents like to do, destroying business property during strikes, condiscating government property by refusing to return salary overpayments as the JTA literally just did, and using strikes as a prime negotiating tool all lead to poverty!

7. Teach the poor that dysfunctional family structures perpetuate the cycle of poverty! The sngle greatest factor destabilizing us is our runaway libido which has lead to widespread dysfunctional family structures and a population greater than the job potential of our economy but NO one sees this as a problem. Listen foreign investors will never invest in Jamaica the way they have invested in Costa Rica or Ireland becaue they have persons advising them and these advisors know that the quality of a country’s work force is directly related to the quality of the country’s family life. So we are trying to put paste on a festering wound and wondering why it will not heal. We will never have lasting prosperity as long as we have widespread dysfunctional families.

8. Overpopulation leads directly to poverty especially when GNP growth does not parrallel it.


“The whole of my remaining realizable estate shall be dealt with in the following way: the capital, invested in safe securities by my executors, shall constitute a fund, the interest on which shall be annually distributed in the form of prizes to those who, during the preceding year, shall have conferred the greatest benefit on mankind. The said interest shall be divided into five equal parts, which shall be apportioned as follows:
one part to… and one part to the person who shall have done the most or the best work for:
1. fraternity between nations,
2. for the abolition or reduction of standing armies
3. and for the holding and promotion of peace congresses. The prizes for physics and chemistry shall be awarded.. and that for champions of peace by a committee of five persons to be elected by the Norwegian Storting. It is my express wish that in awarding the prizes no consideration be given to the nationality of the candidates, but that the most worthy shall receive the prize, whether he be Scandinavian or not.” Paris, the 27th of November 1895. Alfred Bernhard Nobel – Nobel Prize Website.


The Grameen Bank Project came into operation with the following objectives:
– extend banking facilities to poor men and women; – eliminate the exploitation of the poor by money lenders;
– create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh;
– bring the disadvantaged, mostly the women from the poorest households, within the fold of an … manage by themselves; and
– reverse the age-old vicious circle of “low income, low saving & low investment”, into virtuous circle of “low income, injection of credit, investment, more income, more savings, more investment, more income”.

It is clear from the above that the Grameen Bank does not even comes close to fulfilling the requirements of Alfred Nobel’s will. The question that needs addressing then is why did Professor Yunus and the Grameen Bank win the Nobel Peace Prize?

1. The Prize is to be won by a person according to the will. So apportioning it to a person and an organization is perhaps an error. 2. The Prize is to be awarded for work done in the previous year. This part of the will has been violated for years by the committee!!

If the Nobel Prize Committee is saying that giving mini loans to the poor will help to deter them from a life of crime and thus contribute to peace, making the award to Grameen justifiable, then they need to explain why they did not choose other persons and their organizations who are doing far more than Yunus in this regard. Wal Mart for instance has done far more than Grameen in eliminating poverty! So has the many apparel makers who have set up factories worldwide. In Honduras the average apparel worker makes $13 per day while nearly half the population make $2 per day or less! Intel, Microsoft and numerous technology companies have brought prosperity to hundreds of thousands of persons in India. The Grameen Bank will never duplicate these results. This is poverty elimination that the Grameen Bank cannot ever match and makes the Nobel Prize Committee either dishonest, bias or worse!

MICRO FINANCE SOLICITS CONTRIBUTIONS? IS THE REVOLVING LOAN PROGRAM WORKING? On the page below one will see the hundreds of persons and organizations who donated to Grameen last year!

Millions were donated but why? If the micro-loan program was working so well and the repayment rates are so high (99%), then they do not need to solicit more funds. All they need to do is to just revolve the funds they currently have. If they have been operating for so many years and they do not have a large enough pool of funds to do this, then I would like to suggest that this micro loan program needs independent auditing to verify these repayment rates and to really see how much these Muslims have lifted themselves out of povery! I am divining that this is not what it has been advertised as!