The Other Side of the Coin: The Psychological Aspect of Microcredit

Luisa Brunori (Editor)
Department of Psychology, University of Bologna, Bologna, Italy

Malcolm Pines (Editor)

Series: Psychology Research Progress, Economic Issues, Problems and Perspectives
BISAC: SOC045000

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Volume 10

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Special issue: Resilience in breaking the cycle of children’s environmental health disparities
Edited by I Leslie Rubin, Robert J Geller, Abby Mutic, Benjamin A Gitterman, Nathan Mutic, Wayne Garfinkel, Claire D Coles, Kurt Martinuzzi, and Joav Merrick

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Microcredit banking is the brainchild of the 2006 Nobel Peace Prize Laureate Muhammad Yunus, Professor of Economics at Chittagong University, Bangladesh and Chair of Grameen Bank. From small beginnings, the Microcredit movement has become worldwide. Prof. Yunus determined to find a new way to make loans to impoverished peasants who commercial banks would not give credit to as they could not provide the security for the loan.

Yunus devised a method to provide microloans to individuals who formed themselves into “small groups” aiming at mutual support. The loan was provided to the group for each to benefit in sequence. The group, based on trust, originally worked together so that the loan was repaid by the first recipient and then given in turn to the other members. The self-esteem of the recipients was raised by the success of the group members in repaying the loan and becoming shareholders of the Grameen Bank. From small beginnings, Grameen Bank has grown into a successful organization with worldwide connections to other microcredit enterprises.

This book looks in depth at the psycho-socio-dynamics of poverty, at mobilizing constructive forces of groups to empower borrowers to become effective agents. The microcredit movement draws from the writings of Adam Smith, although not from the Wealth of Nations, but from his lesser known Theory of the Moral Sentiments, where he emphasizes the human capacity to behave sympathetically and to be valued in the mirror of society. The dynamics of tangible and intangible goods, of positional and relational goods are explored, bringing to readers the advances in psycho-social and economic theory that help to explain the dynamics of the Microcredit movement which is bringing help and hope to impoverished peoples in worldwide communities.

The volume is grounded upon consideration of poverty as a psychological as much as an economic condition, and discusses microcredit as an innovative tool to overcome poverty in that perspective. It will pay special attention to the Grameen model considered through the special relational technology associated with it, which draws upon solidarity-lending groups and community interaction.

The social link is the main ingredient of the Grameen model both from the point of view of the lending methodology and from the point of view of the organizational structure of Grameen Bank. The volume will examine in depth the relational principles, philosophy and methodology of the Grameen model, and will highlight the specific features of its intervention techniques, which presuppose the view of poverty as a strict intertwining of tangible and intangible features.
(Imprint: Nova)

Foreword

Preface

Introduction

Chapter 1 - Microcredit Experience from Tangible and Intangible Perspectives (pp. 1-20)
Luisa Brunori (Department of Psychology, University of Bologna, Bologna, Italy)

Chapter 2 - The Economy of the Group (pp. 21-46)
Luisa Brunori and Chiara Bleve (Department of Psychology, University of Bologna, Bologna, Italy)

Chapter 3 - Social Brain and Social Group: How Mirroring Connects People (pp. 47-64)
Malcolm Pines (Institute of Group Analysis, London, UK)

Chapter 4 - Microcredit and Poverty: A Multi-Dimensional Debate (pp. 65-92)
Alba Didem Özonaran (Fundraising Department, UNHCR, Northern Italy)

Chapter 5 - Psychological Effects of Microfinance: A Systematic Literature Review (pp. 93-124)
Giorgia Bonaga (Department of Psychology, University of Bologna, Bologna, Italy)

Chapter 6 - Family Network and Household Decision Making Power: Analysis on Grameen Microcredit Borrowers in Bangladesh (pp. 125-154)
Giorgia Bonaga and Md Shamimur Rahman (Department of Psychology, University of Bologna, Bologna, Italy)

Conclusion

Index 163

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