Hungarian bankers look to Bangladesh

 

Three Hungarian bankers are considering setting up a micro-finance bank modelled largely after the Grameen Bank in Bangladesh.

The bankers said the model may work in some of the poorest regions of Hungary as recession bites.

They are in the final phases of research that will determine whether to start the project in Hungary, which had to resort to a $25.1 billion emergency loan from the International Monetary Fund and the European Union last year to avert financial crisis.

Grameen has been providing credit to the poorest in rural Bangladesh in Southeast Asia since 1976, without any collateral, and has given loans to groups of women to help them start small enterprises.

The bank's founder, Muhammad Yunus, received the 2006 Nobel Peace Prize.

A group of leading Hungarian bankers and the Ministry of Social Affairs and Labour have begun a study to determine whether the Grameen example could work in Hungary as well. If the results are positive, the bank could start later this year.

Experts believe hundreds of thousands of people subsist in endemic poverty in Hungary with little hope of a way out.

Grameen-type projects have sprung up around the developing world, but nearly none exist in industrialised nations.

Reuters