The number of homeless people on the streets of New York is quite high. Most of these people are unemployed and lack basic amenities. These people live on social security and create a strain on the economy when they could easily engage in productive work. The only hurdle is that there aren’t enough jobs or sometimes these people aren’t suited to the available jobs. While there are a lot of self-employment opportunities; most self-employment opportunities require an initial seed capital or funding which is not readily available for the homeless and the poor.
None of the commercial banks; big or poor will lend to them because these people can not provide any collateral or guarantee. A few decades back, Grameen Bank of Bangladesh revolutionized the modern banking system by introducing ‘micro-credit’. Grameen Bank started lending to groups of four to five people from the villages of Bangladesh to start their own small enterprises. These loans which ranged from 15 to 20 dollars were promptly repaid in instalments and helped a number of poor Bangladeshis to emerge from poverty.
Over the years this model was replicated in various other villages across the world and even World Bank started funding micro-credit projects in a number of villages. However, the viability of such a model for the urban poor has never been examined. And considering the homeless populace of New York it is pertinent that such a study be carried out with special focus on them. Project Objectives a. The project would seek to examine the credit-worthiness of the urban poor by looking into the skill sets they possess and examining whether or not they are capable of self-sustenance.
b. The project would look into accountability mechanisms for loan-seekers and try and establish mechanisms which are best suited for urban poor. c. The project would look into credit disbursement and examine whether a lump-sum amount will be more appropriate than disbursement in instalments. d. The project would also look into repayment options for the debtors. e. The project would look into if mechanisms for assisting the debtors in their enterprises need to be established and whether their progress needs to be monitored. Statement of Procedures
This project would target the homeless dwellers in New York Columbia and would entail surveying and field work on a massive scale. Students of economics, public policy and social welfare would be roped in to be part of this project. Ten students will be selected. These students would be required to apply to be part of this project and will have to demonstrate an interest and aptitude for this line of work. They would be reimbursed for their expenses. The group of students who are part of this project will be divided into two teams. The first team will collect data through a survey.
The project would proceed with certain basic survey parameters and at the same time the surveyors will be free to adapt the questionnaire depending upon the circumstances of the target population. The survey parameters would look at the current financial condition of the targeted population, their specific skill-sets which could lead to self-sustenance, their attitudes towards credit and their business sense and acumen in handling money of their own. The survey would also seek to examine their expectations regarding the amount of credit; the interest rates and repayment options.
Once, the data is collected; the second team would analyse the data so collected. It is necessary to divide the group into two teams to ensure objectivity in analysis of the collected data. This analysis would involve the following examinations; whether the poor and homeless of the New York are credit-worthy and what would be the total cost of the lending mechanism to cover the population of New York. Once the analysis is over; a detailed report can be prepared outlining the viability of the micro-credit mechanism.
The report will take the form of a scholarly article with the figures collected and if the results are favourable; then micro-credit institutions like Grameen Bank could consider the proposal of setting up a credit institution in New York. The success of the project will be clearly visible from the report. It is certain that such a project would attract media attention and other banks might also carry out independent studies on this issue. This would bring the focus on self-sustenance of urban poor and the attention so received is bound to translate into effective policies.
This would truly be a great achievement for an institution that grew from scratch in the villages of Bangladesh to expand to New York and start operations in the heart of the financial capital of the United States of America. The article and the report would give adequate publicity to the policies of Grameen Bank and might inspire other commercial banks to adopt the micro-credit scheme. The budget required for this proposal would be around 500 dollars. The money would be spent on collecting data and reimbursing students participating in the project.
There are no other operational costs. Statement of Strengths This project has a great potential to succeed and from a purely academic point of view it could spark research into alleviation of urban poverty in other parts of the world too. Students from economics, social welfare and public policy will be chosen specifically so that they can employ the knowledge gained through this project in their future lives. Micro-credit has never been applied in an urban scenario and it would be interesting to note the response to it on an experimental basis.
As someone who has been closely observing the success story of Grameen Bank in rural areas I am dedicated to the success of the micro-credit scheme and have considerable knowledge in understanding and applying the process of micro-credit. I hope that I have sufficiently impressed upon you the need for funding this project. If you have any further queries regarding this project please feel free to contact me for clarifications. Looking forward to a positive response. Thank You. Yours Sincerely, Name and Qualification.