Editing Microcredit (section)

==History==
While the term "microcredit" gained prominence in the late 20th century, the practice of offering small loans to the poor has earlier roots. In the 18th century, [[Jonathan Swift]], the Anglo-Irish satirist and Dean of St. Patrick's Cathedral in Dublin, established a charitable loan fund in 1727 with £500 of his own money.<ref name=":0">{{Cite journal |last=O'Connor |first=Ray |date=September 2022 |title=Institutionalising changing conceptualisations of charity in Ireland: charitable loan fund societies in Ireland, 1729–1823 |url=https://doi.org/10.3828/sh.2022.3 |journal=Studia Hibernica |volume=48 |issue=1 |pages=37–61 |doi=10.3828/sh.2022.3 |issn=0081-6477|hdl=10468/13663 |hdl-access=free }}</ref><ref>{{cite web |author=Aidan Hollis |author2=Arthur Sweetman |date=March 1997 |title=Complementarity, Competition and Institutional Development: The Irish Loan Funds through Three Centuries |url=http://econwpa.repec.org/eps/eh/papers/9704/9704003.pdf |url-status=dead |archive-url=https://web.archive.org/web/20160304122326/http://econwpa.repec.org/eps/eh/papers/9704/9704003.pdf |archive-date=March 4, 2016 |access-date=30 January 2012}}</ref> This fund provided small, interest-free loans to impoverished tradespeople, requiring borrowers to have two neighbors act as guarantors, thereby ensuring community accountability. Swift's initiative inspired the creation of similar loan funds across [[Ireland]], which, at their peak in the 19th century, provided credit to approximately 20% of Irish households.<ref name=":0" /> These early efforts laid the groundwork for later institutional models of microfinance.

Additional early examples of small-scale lending emerged throughout the 18th and 19th centuries. In 1746, [[John Wesley]], the founder of Methodism, created a lending stock for the poor in England. His journal on 17/1/1748 records:<blockquote>I made a public collection toward a lending stock for the poor. Our rule is, to lend only twenty shillings at once, which is repaid weekly within three months. I began this about a year and a half ago: thirty pounds sixteen shillings were then collected; and out of this, no less than two hundred and fifty-five persons have been relieved in eighteen months.</blockquote>In the mid-19th century, [[Lysander Spooner]], an American legal theorist, argued that access to small loans could enable the poor to become self-reliant entrepreneurs.<ref>{{cite web |last=Spooner |first=Lysander |year=1846 |title=Poverty: Its illegal causes and legal cure. |url=http://www.lysanderspooner.org/Poverty.htm |url-status=dead |archive-url=https://web.archive.org/web/20121025172301/http://www.lysanderspooner.org/Poverty.htm |archive-date=25 October 2012 |access-date=30 January 2012 |location=Boston}}</ref> Around the same time in Germany, [[Friedrich Wilhelm Raiffeisen]] founded the first cooperative rural credit unions to provide affordable credit to farmers, laying the foundation for the global credit union movement.<ref>Deutscher Raiffeisenverband:[http://www.raiffeisen.de/genossenschaften/genossenschaften/pdf/Raiffeisen-Organisation-englisch.pdf The Raiffeisen organization: Beginnings, tasks, current developments] {{webarchive|url=https://web.archive.org/web/20070810074631/http://www.raiffeisen.de/genossenschaften/genossenschaften/pdf/Raiffeisen-Organisation-englisch.pdf|date=2007-08-10}}, March 2011</ref>
===Modern microcredit===
The institutionalization of microcredit in its contemporary form began in the 1970s, with [[Bangladesh]] serving as a central hub for early development. In 1983, [[Muhammad Yunus]] established the [[Grameen Bank]], which is widely regarded as the first modern microcredit institution.<ref name=":2">{{Cite web |title=Grameen Bank – Facts |url=https://www.nobelprize.org/prizes/peace/2006/grameen/facts/?utm_source=chatgpt.com |access-date=2025-05-04 |website=NobelPrize.org |language=en-US}}</ref><ref name="Bateman 2010">{{cite book |last=Bateman |first=Milford |title=Why Doesn't Microfinance Work? |publisher=Zed Books |year=2010}}</ref> Yunus began the project in Jobra, using his own funds to deliver small loans at low-interest rates to the rural poor.<ref name=":2" /> The Grameen model introduced a group-based lending system aimed at reducing risk through peer accountability and promoting financial inclusion for low-income borrowers, particularly women.<ref name="Bateman 2010" />[[File:Utkal Grameen Bank.jpg|thumb|State-funded Utkal Grameen Bank in [[Bargaon, Odisha]].]]The Grameen Bank model inspired the creation of similar institutions globally, including BRAC in 1972 and ASA in 1978 in Bangladesh, and PRODEM in Bolivia, which later became the for-profit BancoSol in 1986.<ref name="Drake 2002">{{cite book |last=Drake |first=Deborah |title=The Commercialization of Microfinance |publisher=Kumarian |year=2002}}</ref><ref name="Armendariz 2005" /> In Chile, BancoEstado Microempresas became a major provider of microcredit services.<ref>{{Cite book |last1=de la Torre |first1=Augusto |title=Innovative Experiences in Access to Finance: Market-Friendly Roles for the Visible Hand? |last2=Gozzi |first2=Juan Carlos |last3=Schmukler |first3=Sergio L. |year=2017 |pages=221–251 |chapter=Microfinance: BancoEstado's Experience in Chile}}</ref> Though the Grameen Bank was formed initially as a non-profit organization dependent upon government subsidies, it later became a corporate entity and was renamed Grameen II in 2002.<ref name="Drake 2002" /> Yunus was awarded the [[Nobel Peace Prize]] in 2006 for his work providing microcredit services to the poor.<ref>Nobel Prize.org:[https://www.nobelprize.org/nobel_prizes/peace/laureates/2006/ The Nobel Peace Prize 2006:Muhammad Yunus, Grameen Bank] {{Webarchive|url=https://web.archive.org/web/20180809102024/https://www.nobelprize.org/nobel_prizes/peace/laureates/2006/|date=August 9, 2018}}, retrieved on 13 February 2012</ref>