It was just another day in the village of Gazipur, about an hour’s drive from the capital of Bangladesh. The order was given to about thirty conservatively dressed women to stand and recite the pledge of BRACs (Bangladesh Rural Advancement Committee) micro finance program; the pledge to which all women seeking loans from BRAC are required to commit:

“I shall not patronize corruption and injustice! I shall work hard and strive to improve the living condition of my family! I shall send my children to school! I shall adopt family planning and keep the size of my family small! I shall deposit my weekly security savings installments in time! If I take loan from my organization I shall repay the amount in time! I shall take care of my daughter and son equally and fairly!”

BRAC is a non-governmental organization that specializes in development work. Funded extensively by the Bangladeshi government and the World Food Program, it is best known for its effective micro finance program. The Income Generation for Vulnerable Group Development Program (IGVGD) focuses primarily on ultra-poor women, loaning them small sums of money that they invest in various entrepreneurial activities.

With the loans, women invest in rickshaws and sari booths to cows and goats. The repayment rates for these loans are over 95 percent, highlighting the success and sustainability of the program. While gaining access to BRAC’s credit facilities, program participants also receive training in various income generation activities, including poultry and livestock rearing. The IGVGD program provides Essential Health Care services due to the fact that ultra-poor women face greater discrimination and higher risks to their health. An annual check-up, basic curative care, and family planning education are available. Human rights and legal education courses are also a key component of BRAC’s program, which works to educate and empower women by allowing them to be aware of their legal rights and the mechanisms they can use to address the discrimination that they face.

Micro credit has increased the standard of living for much of the population of Bangladesh, and many other nations have tried to implement micro finance programs, from Latin America to the United States. However, micro credit does have its drawbacks. The high interest rates (ranging from 15 to 25%) increase the burden of debt, accelerating the cycle of poverty in some cases. Bangladesh also faces resistance to the micro credit programs. Since Bangladesh is a Muslim country, the Islamic prohibition on usury has led to many Bangladeshi Muslim groups voicing their opposition.

Innovations in the field of Islamic Economics are occurring rapidly, and BRAC is doing research on the subject. The aim is to bridge the gap between secular and religious elements in Bangladesh so that both can focus solely on economic development. In addition, since BRAC is heavily foreign-funded, many nationalists and leftists in Bangladesh, and in the “third world” as a whole, see anything BRAC does as a de facto act of imperialism.

Experience in Bangladesh has also shown that while micro finance works well by increasing the standard of living for small groups and individuals by increasing measures on the World Development Index- such as caloric intake -the effect on the overall economy (GDP) seems to be negligible. Being one of the poorest ten countries in the world, Bangladesh’s success with its micro finance programs has been largely overshadowed by its LDC (Least developed country) status. With Bangladesh ranked as the most corrupt country by Transparency International, the market conditions for micro finance in Bangladesh are less than ideal. However, the disciplined, entrepreneurial spirit that is a result of micro-credit programs will surely have a tremendous effect on the economy in the long run and many other developing nations can learn from Bangladesh’s experiences with micro credit.