THE federal capital’s administration recently decided to extend micro-credit to rural women of the area by distributing cheques worth Rs20,000 each among 30 deserving candidates. The money was disbursed under a micro-credit scheme of the National Centre for Rural Development, Chak Shahzad. Some 500 women are said to have benefited so far. After the success of Grameen Bank in Bangladesh, experiences around the world have shown micro-credit to be a highly efficient method of addressing poverty at the grass-roots level. Many of the poor would be able to improve their financial condition by setting up small, self-sustaining businesses if they had access to credit. Unfortunately, they cannot approach banks that demand collateral against loans. Research conducted by the Orangi Pilot Project in Karachi found that there is no shortage of market demand or productive labour, but that the lack of credit forces the poor to buy dear and sell cheap.
Moreover, micro-credit schemes run by the OPP and other organisations show that the loan recovery rate is high among the poor, particularly when the recipients are women. The latter tend to place greater value on financial independence and also use resources wisely. Micro-credit has therefore allowed women in several places to establish income-generating enterprises. They have set up shops, purchased and reared livestock and bought sewing machines. This has also had the effect of empowering women in a patriarchal society. Some micro-credit organisations have, however, experienced difficulties in either disbursing loans fairly or recovering them due to politically motivated demands that individuals of certain constituencies or party loyalties be given preference. This must cease. It is incumbent on the government to not only ensure that recipients of its micro-credit scheme are deserving but also that political interference is not allowed.