Good Report About Grameen Microfinance
Microfinance was a concept that was started by Mohammed Yunus. The objective behind microfinance was to lend money to poor people according to credit terms that would be easy for them to follow. Microfinance also aimed at teaching financial principles to the poor so that they could become financially sufficient. The Grameen Bank came into being in the year 1976 when Yunus loaned some money to 42 poor people in a small village in Bangladesh. The borrowers paid off their loans quickly, and inspired Yunus to start the Grameen Bank. The bank is now spread around the world, and has helped in the transformation of the lives of poor people.
The target group of Grameen Microfinance is the poor people, especially women. The bank aims at enabling these poor people to get rid of poverty. Loans are given out to people who are in groups. Groups are encouraged so that the members can exchange ideas and provide solutions to the problems they are facing. The people in the group empower each other so that they can move away from poverty.
The credit management process of Grameen Microfinance does not require any collateral while giving out loans. Trust is a big factor in giving out loans. It is totally different from the other traditional banks where most people cannot qualify to receive loans. Credit is given so as to enable people to create businesses that would generate income rather than on grounds of consumption. Services are offered from door to door as opposed to clients visiting the bank.
The Grameen Microfinance program can be applied in my country through targeting the people who live in the poor communities. It would also be important to teach financial discipline. Entrepreneurship will enable the country to increase its economic growth.
Cigarette Money in POW Camp
Money has been viewed as a commodity due to cases such as the use of cigarettes as mediums of exchange in POW Camp. The prisoners of war during the World War II used cigarettes as money. However, arguments have arisen stating that prison camps should not be compared to the crowds of people in the market. Some economists are, however, of the view that that such an argument is too subtle to refute the claims of cigarettes as a form of money.
Cigarettes are not durable, but they possess some characteristics that make them usable as currency. Some of these characteristics include desirability, uniformity, and portability. Many of the captured soldiers had an addiction to nicotine due to the free cigarettes offered to them by the American tobacco companies. The addiction created a high demand for the cigarettes in the same way taxes increase the demand for modern day money. The addicted soldiers were always willing to accept free cigarettes so as to satisfy their craving. The other soldiers also accepted the free cigarettes so that they would offer the addicted soldiers when they ran out of stock. In a similar manner the modern day citizens are always willing to accept money so that they can meet their tax obligations.
The cigarette money was attractive because people did not have to worry about hyperinflation. The cigarette was destroyed whenever a person smoked, thereby reducing the supply of cigarettes. That meant that the amount of cigarettes in circulation was not able to increase rapidly. Cigarette money was a deflationary currency naturally. The values of other commodities were measured in terms of cigarettes. The prisoners would trade goods among themselves using cigarettes. The debasement of cigarette money would be caused by factors such as a high supply of cigarettes, and low demand for the cigarettes. Inflation was not an issue because the cigarettes diminished with their consumption.
Island of Stone Money
Yap is a small island in the Pacific Ocean, and it has helped in answering questions about money. The island does not have any silver or gold. Many years ago, some people from Yap discovered deposits of limestone on an island that was many miles away from Yap. They carved the limestone into several huge stones, and brought them back to Yap using their boats. The people of Yap needed something that everyone could use to pay for the important things they required. They looked for beautiful things that they could use, but since they did not have gold, they settled for the Fei stone discs.
The Fei stone discs were seen as very valuable objects, and would only be used to buy something of high value such as paying dowry for a bride, and a person’s welfare if a whole harvest had been destroyed. The Fei stones were very heavy, and could not be carried around. The Fei stones never changed hands due to their weight. Transactions were performed by transfer of ownership of the Fei stones, and everybody in the village was made aware that the Fei stone belonged to a new person. There was one case where a Fei stone sunk in the ocean when it was being brought to the island. The people decided that the Fei stone was still good and valuable even though it was at the bottom of the ocean.
The Fei stone qualifies as money because it was used to buy important things. It can be considered as a Fiat money because it is based on the demand and supply rather than the material that makes up the money. The people of Yap Island believed that the Fei stone had value even though they could not carry it around. The Fei stone money was based on pure faith.