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28 February 2024

Microfinance pioneer expands into US

By Agencies
Grameen Bank, founded by Bangladeshi Nobel Prize winner Muhammad Yunus, is taking its pioneering microfinance model to the United States, the Financial Times reported on Saturday.

The move, which will open doors for some of the 28 million people in the US who do not have bank accounts, comes with the banking sector there being battered by the crisis over sub-prime loans.

Grameen Bank made its name by lending money to poor women who are trying to start small businesses but cannot borrow from banks because they do not have a good enough credit rating or bank accounts.

The FT said that the bank had already lent $50,000 (Dh183,600) in the last month to groups of immigrant women in the New York borough of Queens. It plans to offer $176 million (Dh646m) of loans within New York City over the next five years and then expand across the United States.

"Now is a good time because of ... the sub-prime crisis, and that highlights the issue that the financial system is not perfect," said Yunus, who shared the Nobel Peace Prize with Grameen Bank in 2006, in comments quoted by the paper.

The bank's entry into the US market is its first into a developed market. (AFP)