Fighting poverty $1 at a time

Bangladeshi women gather at a micro-credit meeting.


NEW YORK (CNN) -- It all started with $50. In 1988, that's what it took Noni Bala Ghosh to revive her family's business of making sweets to sell in Kholshi, her tiny village in Bangladesh.
Family members had given up the business because they could no longer afford to buy milk to churn into rich chhana, a thick cottage cheese used to make creamy sweets.
Driven to despair, Noni heeded the advice of several women in her village who had taken loans from Grameen Bank, a lending organization that developed the poverty-busting lending program known as "micro-credit," in the 1970s.
Through a series of small loans from the bank, she soon bought a cow and began to supply her own milk, and eventually engaged her two sons and husband, Gopal, to help support the family business she led. After 3 1/2 years, Noni had become the key supplier to a prominent sweets shop in Dhaka. Once again, she could afford to feed and clothe her family.
Though $50 seems like a relatively small amount to most, it can be the key to breaking out of poverty once and for all for the more than 1 billion people in the world who are living on less than a dollar a day.
Since its beginning, the micro-finance model of providing small loans to help expand or start a self-sustaining enterprise has helped more than 8.2 million of the world's poorest people -- in at least 115 countries -- to stand on their feet.
"I never thought it would reach so far," said Dr. Mohammed Yunus, the founder of the micro-finance system. He first learned of its ability to change a poor person's outlook on life when in 1976 he decided to lend a total of $27 to pay off the loan-shark debts of 42 villagers in rural Chittagong, Bangladesh.
"When I gave them that money, I didn't think much about it at that time. But the villagers' excitement -- they looked at me like I had liberated them."
These life-altering loans are distinctly different from typical bank loans in that 96 percent are awarded to women, and most are for amounts under $200, according to Grameen Foundation USA. None require collateral or guarantors or even proof of skill in a trade or craft; instead, lenders rely on personal accountability to the small community of borrowers to which each woman belongs.
Repayment, which generally takes place within six months to a year, exceeds 95 percent, according to Grameen Foundation USA.
Opportunity and Investments are Key:
As part of the CNN special "The Poverty Trap," which airs Saturday and Sunday at 8 p.m. ET, former U.S. President Bill Clinton sat down with CNN's Dr. Sanjay Gupta to discuss micro-credit and other potential solutions for eradicating global poverty.
"Intelligence and dreams and willingness to work are evenly distributed throughout the world. What's not evenly distributed is opportunity, investment, and systems ... that work. There has to be a connection between effort and result. And in many poor and unstructured areas of the world, that connection doesn't exist," Clinton said.
The Clinton Global Initiative, focused on ending world poverty by creating such connections, supports micro-finance organizations such as Grameen Foundation USA, which has reached more than 2.2 million borrowers through partnerships in 22 countries.
In addition to micro-credit, Clinton discussed other effective anti-poverty programs designed to make individuals self-reliant, including Heifer International, which has been giving livestock to poor families for almost 60 years. The program has saved lives across the world, from the dry dusty villages of war-torn Rwanda, to the farmlands of Clinton's own home state of Arkansas.
Despite promising solutions inching toward the end of the poverty trap, it remains a global scourge: 30,000 children die from poverty every day, according to the United Nations; one-third of Detroit, Michigan, residents survive below the poverty line; trillions of dollars have been dedicated to end the cycle; yet poverty continues with no end in sight.
Still, Clinton acknowledged the vast breadth of the task he has set out to accomplish with a note of optimism. "We're in better position now to make a positive difference than ever before, because of what we know and all the mistakes we've made in the past."