Media In the Media Grameen-CPAD-Danone Micro-Credit Initiative Aids Post-Quake Reconstruction in Sichuan, China
| Grameen-CPAD-Danone Micro-Credit Initiative Aids Post-Quake Reconstruction in Sichuan, China |
| Sep 15 2009 |
| Written by Christopher Maggio |
|
Microcapital.org In March of 2009 Microcapital reported on a project, called the Grameen-CPAD-Danone Micro-Credit Initiative, to bring micro credit to the victims of the Sichuan earthquake that devastated the province in southwest China as well as to impoverished people of the Inner Mongolia Autonomous Region and the Hebbei Province [1]. The project is a joint operation between Grameen Trust [2], which aims to support microfinance activities around the world, Danone [3], the world’s biggest producer of fresh dairy products, and The Group Office of Poverty Alleviation and Development (CPAD) [4], which implements policies and projects for economic development in poor areas of China. Danone funded the initiative by providing a donation of USD 2.9 million, according to an article in China Daily, while Grameen Trust has provide technical assistance and CPAD has provided policy guidance [4,5]. In addition to these groups, the China Foundation for Poverty Alleviation (CFPA), whose goals is poverty reduction through various means, has been implementing the project on the ground [5,6].
The initiative was formally launched in March of 2009 and, as of August 31, 2009, has provided over USD 2.3 million in loans aimed at “poor farmers and people affected by the earthquake so that they can earn a living and improve their living standards” [5]. Six cities and counties, in and out of the Sichuan region, have been targeted by the program: “Mianzhu and Shifang cities in the quake zone, Kulun County in Inner Mongolia Autonomous Region and Wuyi, Wanquan and Pingquan counties in Hebei Province” [5].In Mianzhu alone, over USD 870,000 in loans has helped 338 farmers and allowed 298 families to rebuild their homes, according to Liu Dongwen, CFPA deputy executive director [5]. Liu has set the goal of providing loans totaling over USD 24.6 in the next three years [5]. Li Jiaying, customer manager of Mianzhu Branch Office of CFPA Microfinance Management Co Ltd, a microfinance institution involved with the project, cites the ease of loan application and a low interest rate as part of the program’s success in reaching the poor and those affected by the earthquake. “He or she only needs to find a warrantor [to obtain a loan]” says Li [5]. “After one files the application, he or she can get the loan between three and seven days. “Another reason [for the program’s popularity],” says Li, “is [that] the interest cost for borrowing a loan is only 8 percent” [5]. The Grameen Trust was founded in 1989 by Muhammad Yunus to promote the Grameen Bank Replication Program and, as of July 2009, has “offered loans to more than 5 million people in 39 countries” [7]. The program attempts to promote the poverty reducing philosophy of Grameen Bank, the micro credit provider founded by Yunus in 1976 that now has 7.93 million borrowers in 84,573 villages in Bangladesh [8,9]. According to the MIX Market, the microfinance information clearinghouse, Grameen has a gross loan portfolio of over USD 642 million [10]. As of December 31, 2008, Grameen had a 1.66 percent return on assets, a 14.78 percent return on equity, and a 57.46 percent ratio of gross loan portfolio to total assets [10]. Danone and Grameen Bank first worked together in 2006 with a joint venture in Bangladesh called Grameen Danone Foods [11]. The venture has been intended to “bring daily healthy nutrition to low income nutritionally deprived populations in Bangladesh and alleviate poverty through the implementation of a unique community based business model” in which factories are set up in Bangladesh and profits are reinvested to further the model throughout the country. Microcapital reported on Grameen Danone foods in December of 2008 [12]. The Group Office of Poverty Alleviation and Development in China was founded in 1986 and is made up of members of “the State Council general office, planning commission, economic and trade commission, financial ministry, the people’s Bank, ministry of education, science and technology ministry, civil affairs commission, ministry of labor and social security, land and resource, communication, water conservancy, agriculture and public health, family planning commission, environment bureau, statistic bureau, forest bureau, agricultural bank, trade union, youth league, women’s federation, supply and sales cooperative, [and] federation of the disabled” [4]. It is tasked with research on poverty alleviation as well as policy formulation and coordination regarding poverty alleviation. According to the MIX Market, it has gross loan portfolio of over USD 15.6 million and 26, 878 active borrowers [13]. The China Foundation for Poverty Alleviation was founded in 1989 and has since become the “the largest charitable organization specializing in poverty alleviation” in China [6]. Some of its other projects include the “Micro-finance Project for increasing poor farmers’ income and improving their abilities [and the] Maternal and Infant Health Project to lower the death rate of pregnant women and newly-born children in poor areas” [6]. By Christopher Maggio, Research Assistant Extracted from article: http://www.microcapital.org/microcapitalorg-story-grameen-cpad-danone-micro-credit-initiative-aids-post-quake-reconstruction-in-sichuan-china/ |
