Abstract
M.A.
In South Africa, high unemployment rates, uneven distribution of opportunities and
poverty are major concerns for the government. Poverty is defined as the
deprivation of people due to the lack of access, and their right, to certain
commodities. In 2004, close to 15,4 million people were living below the poverty
line. In addition to this, in 2005, 53 percent of South Africans, equating to 16,4
million persons, were excluded from formal financial services. Microcredit
has
been advocated as a tool to reduce poverty.
A world renowned microfinance
model, the Grameen Bank model of Bangladesh
has had success in not only reducing poverty, but also allowing poor people
access to formal financial services. The bank has 7,93 million borrowers, with 97
percent being female clients, and one third of its borrowers have crossed the
poverty line.
Four organisations in South Africa have replicated this model. These organisations
are the Small Enterprise Foundation, Marang Financial Services, The Women's
Development Businesses, and the South African National Zakah Fund. These
organisations have achieved in reaching 130,000 clients across South Africa, and
extended over R1 billion in loans. However, only four of the nine provinces in the
country have been infiltrated effectively. The impacts on these borrowers lives,
and their households has been exceptional. Many of the families now have
increased selfworth,
a stable income, job security and access to credit in order to
advance their businesses. In addition, Grameencredit
has allowed thousands of
South Africans access to legal, formal financial services. Thus, Grameencredit
has been advocated to be an effective method in the fight against poverty.