There are various strategies that are used in alleviating poverty in the world. One of the models for attacking poverty is the bottom-up model offered by Muhammad Yunus. In this plan, Muhammad plans to work hand with the very poor people. This will help him to give small loans to people in order to raise the entire community’s well-being (Yunus, 2003, pp 18). According to Yunus, if the poor received a little financial assistance in the form of a loan and are educated on the main principles of financial control, the people will act responsibly and manage the business themselves (Yunus, 2003, pp 20). These financial loans were given to a group of forty two women in a small community to help them to make chairs. The money would have been used in buying raw materials and thus it was put into good use for developing a good business.
Yunus gets women into his Grameen project without requiring collateral. Such women need to be poor and possess under-utilized skills. The project utilizes a group-based credit strategy which uses peer-pressure within that group in order to ensure that financial affairs are carried out effectively so as to ensure repayment (Yunus, 2003, pp 28). This shows that the project gets women from poor backgrounds in order to help them improve their financial status. It also helps in eliminating the exploitation of the poor people by money lenders. In addition, Grameen project creates good opportunities for self-employment and brings the disadvantaged women from poor families to better financial levels. An example of the women who have benefited from this project is Ibu Yusnaini. This woman got a loan of $100 to purchase more equipment for a business of selling traditional Indonesian meals (Yunus, 2003, pp 31). The equipment helped her to produce the food faster and increased her daily income. The Grameen Project has thus helped to improve the financial status of many poor people.
The Grameen project and the IMF project compares in that, they both help to alleviate poverty in the society. Grameen Project has various advantages. One of these advantages is that it extends loan facilities to the poor (Yunus, 2006, pp 26). It also eliminates the exploitation of the poor people by money lenders in order to ensure that the poor have better opportunities to engage in self-employment. Although the Greemen project has many advantages, it also has various disadvantages. One of these disadvantages is that it brings people into debt which they may not be able to escape. In addition, it is associated with the exploitation of the poor people who may be required to sell their belongings to repay the loans (Yunus, 2006, pp 28). The other disadvantage of this project is that it depends on subsidies for its operation and this makes it to become welfare in the society. The Grameen Project is criticized on the basis that it makes women to make vows to disobey their husbands and thus many people are against its services.
Due to its advantages and disadvantages the Grameen Project most helpful in relieving poverty in the developing nations.
The IMF is a top-down poverty alleviation model which is used to help the member nations in the world to improve their financial status. The organization helps at stabilizing exchange rates and help in the reconstruction of the world’s global payment system (Mark, 2010, pp 15). The member countries form a pool which can lend money to countries on temporary basis. This organization has various advantages. The first advantage is that it helps to improve economies of the member countries. It also fosters global momentary cooperation thus securing financial stability for its member countries (Mark, 2010, pp 17). The IMF has disadvantages because it has faced two main criticisms. One of the criticisms is that it leads to structural adjustment programs which may increase poverty in the recipient countries. It also has high economic performance targets which may affect the member countries (Mark, 2010, pp 18). The IMF project is helpful in relieving poverty in the developed nations.
Mark S. The IMF in the Global Economy: Banks, Bonds & Bailouts. 2010. Cambridge.
Cambridge University Press
Yunus M. Banker to the Poor: Micro-Lending and the Battle against World Poverty. 2003
New York: Public Affairs
Yunus M. Banker to the poor: The autobiography of Muhammad Yunus. 2006. Thomson Gale.