Grameen in the UK celebrates 101 loans in first year

03 June 2015

Grameen in the UK celebrates 101 loans in first year

Grameen in the UK, the micro-lending initiative facilitated by Glasgow Caledonian University (GCU), has celebrated its first year of trading and over 100 loans. It is the first such Grameen-style scheme in Western Europe. 

The Grameen lending system was created by GCU Chancellor and Nobel Laureate Professor Muhammad Yunus. The Glasgow-based Grameen in the UK venture was established in June 2014.

Grameen in the UK offers small loans, initially of £1000, for up to 52 weeks to new start-ups and existing small businesses currently not served by any financial services, encouraging individuals’ economic and personal development and that of their family and community.

The model has been used in developing countries to support entrepreneurship and alleviate poverty, and in many cases to empower women. In the UK, however, 60 per cent of Grameen’s borrowers are currently men.

The venture is backed by a number of funders including Tesco Bank, which provided access to Grameen’s initial capital facilities and provides Grameen borrowers with access to basic savings accounts.

Grameen in the UK has now secured additional financial backing of £250,000 over next three years from the Whole Planet Foundation (part of Whole Foods Group) to fund new client loans. The Moffat Charitable Trust has also granted £45,000 to fund the operational costs of moving services into Ayrshire.

The initiative operates as a group lending model. There are currently 19 active borrower groups across Glasgow in Bridgeton, Govanhill, Sighthill, the Gorbals, Parkhead and Dennistoun.

Kevin Cadman, Chief Executive of Grameen in the UK, said: “With a 93 per cent recovery rate for the loans, it is proving to be a successful model. It allows clients the opportunity to buy stock or training so that they can offer additional services and grow their businesses. We now have an ambitious target of supporting an additional 400 new clients for year two.”

GCU researchers are working with the first borrowers to investigate the viability of microcredit loans as a means of improving the finances and health of low-income individuals in the UK, in the first major study supported with evidence of the views of this population group.

Funded with a £210,000 grant from the Chief Scientist Office (CSO), part of the Scottish Government Health and Social Care Directorates, the ‘Fair credit, health and wellbeing’ project aims to explore the perceived association between improved income, community connectedness and potential resulting health effects.

GCU’s work in this area focuses on researching the potential for microcredit to act as a health creator and generator of wellbeing. This brings a new ‘determinants of health’ perspective to the microcredit research field. The study will analyse participants’ financial management planning, extract participants’ subjective views on the relationship between income and health, and identify shared perspectives.

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