I wrote last week about our experience of Personalisation.  I talked you through the early stages of the self-directed support process, highlighting some issues that we’d come up against at each stage.  I’ll continue now with the next stages of the process, before considering what to do to change things for the better.  Again, your thoughts and experiences – in particular any examples of where things are working well  - would be much appreciated.

• Let’s look first of all at the support planning and brokerage stages.  We’ve witnessed a lack of creative thinking here.  There’s lots of terminology here – and how this is done differs in each local authority area.  But the basic idea is that a person is supported to work out how best to meet their desired outcomes (support planning).  They can then be supported to find creative, person-centred ways to meet those outcomes, by identifying appropriate services to buy (brokerage).

  We are finding that, even though support planning and brokerage can, in theory, be done by organisations outside of the social care system (eg an older people’s support network could do it for one of their members) the majority of this work is done by social workers.  Social workers who are under immense pressure, and have very little time.  Social workers who are accustomed, however person-centred they may be in their philosophy, to offering people what the system can offer.  It’s hardly surprising that (according to anecdotal evidence) the majority of people going through this process are ending up with pretty much what they had before.  In other words, services which the system can deliver.

  Let’s just pause and think about that for a while.  So a load of money, time and effort is being put into this, and it seems that a majority of people are coming out with what they always had.  Isn’t that a bit ridiculous, even if we accept that some people may actually be quite happy with what they had?  Well, what might seem more ridiculous is that, statistically at least, this person counts as someone who has accessed a Personal Budget (and until April 2011, councils received a financial incentive for getting people onto a Personal Budget in this way).  Even though nothing has changed for them, and the council still manages their money (sometimes spending it only on services provided by organisations with whom the council has framework agreements (contracts).  This is what is often referred to as a Virtual Budget. This statistical massage is why Ministers can confidently proclaim that all is well with Personalisation.

• One of the things councils have been charged with is stimulating  a market in social care.  They are required to produce what are called Market Position Statements – in order to communicate with other providers (third sector, private sector) how they would like to see the market develop.  In one area where we’ve done some work in the past, the consultation event on the Market Position Statement has been postponed twice, and we’re still waiting for a new date.  That’s not a great way to stimulate a market.

  But how do you stimulate a market?  I think it’s a really hard thing to do.  And to be fair to the councils where we’ve worked, they’ve each put money into encouraging third sector organisations to set up services.  But at the same time, they’ve been less than forthcoming with the kind of information which would give organisations confidence to take the risk in setting up services.  Simple information, like how many people in the city have got a Personal Budget, and how many of them ended up with services which were materially different to what they had before.

  So you can understand why, when they don’t get answers to these questions, organisations may assume that few people are being enabled to access new services.  If this is your perception, you’re hardly likely to set up a service are you?  Which, of course, means that there are fewer services to choose from – which makes it more likely that people will go for what they’ve always had.  And so we go on.

We do what we do because we want to make a difference.  I write stuff like this not to point the finger, but to acknowledge that things aren’t working as they could do.  I think, with a policy as radical as Personalisation, it’s natural that things will take a while to work out.  But you need to feel that things are at least moving in the right direction – and that issues are acknowledged.

I think that recently people are starting to publicly acknowledge that we are struggling to make Personalisation work.  I really think we need more openness about this.  But it doesn’t come naturally to local authorities to admit that they don’t have the answers.

What are we doing about this?  We’re continuing to work on Personalisation (some paid work, some speculative work) – and in particular we’re focusing on what we’ve called Personalisation – Made in…. We ran a Personalisation – Made in Bradford open space event earlier this month – and we’ve set up a network in Leeds too.  The idea is to bring different people together – who all have a stake in making this work.  Service providers, people who receive social care support, investors, service designers, social workers.  We believe that we’ll find ways to make Personalisation work by bringing people together to discuss issues openly, and then collaborating to make the system work for people.

They say you never really appreciate the true value of something til it’s gone.  They’re usually right, but not in this case.  Guardian Leeds hasn’t shut up shop yet and I am in no doubt about its value to Leeds.  I feel it also has profound implications for the future of local news gathering too.

For those of you don’t know, Guardian Leeds was a bit of an experiment by the Guardian.  They recruited a beatblogger for three cities – Leeds, Cardiff and Edinburgh, to try out a new way of gathering news.  Exclusively online, and with a remit (I’m summarising here but you’ll get the idea) to find local news, write about local news, link to local news and get other people to write about what they’re up to and what interests them in Leeds.

I’ve written before about my exasperation with much reporting of local news.  In fact, I got into quite a big debate with a local NUJ official (see the comments section) when I blogged about not showing my support for striking Yorkshire Evening Post journalists.  Guardian Leeds has, for me, filled an important gap.  In short, it’s given me news and information that is of interest to me.  Instead of what I tend to get from a lot of other local news providers – crime, fear, regurgitated PR company press releases and community stories which exclusively feature individuals painted as heroes posing for daft photographs.

It’s also given me the chance to get publicity for some of the things that I’ve been involved in.  Without the chance to reach a wider audience through Guardian Leeds we wouldn’t, for example, have got such a good turnout for our public meeting about a city-centre community owned shop.

Yet the Guardian tell us that they can’t make Guardian Leeds pay.  It was an experiment.  And good on them for experimenting.  But you do wonder how they ever thought they were going to sustain a local web-based news service.

Of course the newspaper industry is on its knees, so it’s no surprise that the Guardian hasn’t got any ready cash available to continue to fund a service like Guardian Leeds.  But is there another way?  Maybe we need to find different ways to fund and support a local newsgathering service.  @MattEdgar is encouraging people to pledge £23.32 a month (the figure’s symbolic – it’s the cost of a monthly subscription to the Guardian) to “support a citizen-run news service for Leeds that offers quality writing with a determinedly local focus, but only if 35 other local people do the same”.  It’s an interesting idea – and I’ve just signed up.

Maybe there’s a way to partner with the Guardian on this?  It’d be interesting to know what the maths – how much would it run to continue to run something under the Guardian banner, but with a mix of income, including subscriptions from local people committed to the approach?  Or would it need to be something new and totally local?

I’ll let you into a secret.  I went for the Leeds beatblogger job.  I just thought it sounded like a fantastic opportunity – and as you’ll know, if you’ve read previous posts, I only ever wanted to be a journalist (and a footballer) when I was a kid.  It was a couple of years ago, I fancied doing something different and I was at the height of my powers as a blogger (I’ve since neglected it in favour of Twitter – but I’m going to make the effort again) and I thought I’d have something to offer.  I didn’t get shortlisted – and having seen the quality of work that John has put into Guardian Leeds, I can understand why.

The Government recently announced who will be the Prime Providers delivering Work Programme contracts across the country.

The Work Programme is basically about supporting people to get them back into paid employment.  I don’t doubt for a minute that we need some fresh thinking here, and I’m not opposed to private sector involvement.  But there are various issues which are causing me some concern in the way that things are happening.

Social Enterprise Magazine has done some good work looking into this in more detail.  The Department for Work of Pensions and the Minister for Civil Society have been keen to assert that 40% of the work will be carried out by voluntary sector providers  – as sub-contractors to the (mainly private sector) Prime Providers.  In other words, this is a massive boost for the Big Society.

But it’s not easy to work out exactly where that 40% figure has come from.  A quick look through the letter from Chris Grayling, (see pdf at bottom of article) outlining which sectors the subcontractors on each Prime Provider contract come from, invites you to challenge whether 40% of the fees will find their way to third sector providers.

Take, for example, my patch, West Yorkshire.  The two Prime Providers for our area are BEST and a collaboration between Ingeus and Deloitte.

The letter from Employment Minister Chris Grayling seems to suggest that none of BEST’s subcontractors will come from the third sector, whilst 8.2% of the work on the Ingeus/Deloitte contract will be delivered by the third sector.

That doesn’t feel like a victory for the West Yorkshire branch of the Big Society.

What bothers me here is that it feels like another example of dogmatic belief getting in the way of hard analysis of facts, and experience of how such contracting arrangements may not always work in the best interests of smaller providers.

I’ve written before about how I see parallels between the category management approach often adopted by supermarkets, and the Prime Provider system which the DWP is using.  Whilst, of course, there’s a world of difference between purchasing tinned fruit and procuring job-readiness training, I think it’s worth acknowledging that there is potential for difficulty when a big company (the Prime Provider) is tasked with collaborating with lots of smaller providers.  Government would have us believe that they’ll all play happy families, nurturing the young’uns and small’uns so that together they can share the proceeds and make the contract a success.  I’m afraid I just don’t believe that it will turn out like that in a lot of cases.

Others have written about their concerns about how the Work Programme will pan out.  There certainly seem to have been issues with regards to an over-emphasis on low prices, in place of quality.  That doesn’t bode well – and certainly doesn’t feel like the kind of environment where the smaller, perhaps more innovative, approaches will thrive.

I’m not a great fan of fanfare.  Initiatives which get enthusiastic backing from people who tell me that they have the solution to this or that big issue tend to leave me feeling a bit uneasy.

So I watched with interest, and a fair dollop of scepticism,  the emergence of Start Up Britain, the entrepreneurship initiative which was launched today by a host of celebrity entrepreneurs.

That’s not to say that it won’t do some good stuff.  Just as I think that plenty of good will eventually come from all the debate around Big Society.  But I find myself feeling  sceptical about what I heard about today.

It doesn’t help that if you air that scepticism, as I did a bit, and my good friend Mike Chitty did a good bit more today on Twitter, you are immediately accused of having that terrible British disease, cynicism.  Such reactions are even stronger than normal when it comes to entrepreneurship.  We’re so terribly aware that we aren’t Americans – (after all Start Up Britain is modelled on a similar US scheme) – that we jump on anyone who isn’t whooping and doing enthusiastic high-fives when confronted by a bit of US style razzmatazz.  It’s easier to dismiss your critics than accept that they may just have a point.

I’m not a cynic, but I’m a sceptic, and I think that can be quite a healthy position, particularly if it’s informed by experience.  I’m sceptical about a lot of activity that takes place encouraging entrepreneurship.  That comes from first-hand experience of running businesses, succeeding and failing in business and supporting businesses – particularly start-up social enterprises.

We rely a lot on immensely successful, big scale, charismatic entrepreneurs to inspire the mass of people who are tentatively considering setting up their first business.  I can’t help but feel that there’s a mismatch there, and beyond the transient fuzzy feeling that you might get from hearing a good story, I’m not wholly convinced that such activities are all that useful for many people who are just starting out.

But this kind of thing clearly does work for some people.  Yet I think we forget that most businesses won’t be high growth, and they won’t be leaders in their market.  Of those that succeed, (a majority will probably fail – although I’m not sure that story was told today) many will be good businesses, keeping people in employment, serving customers well, but not setting the world on fire.  That, as far as I’m concerned, is fine – it’s the kind of steady, long-term business activity that we probably need more of.  Not everyone will be pitching to venture capitalists for £10 million to develop a world-beating brand.

So my point is that there are whole worlds of entrepreneurship which are a million miles away from the high-octane, celebrity-filled, soundbite friendly world of Start Up Britain.  And just as there’ll be lots of people who don’t respond to the kind of work that I do – the DIY Business Planning, the Ideas Circles and the like, I believe there are loads of people who, when offered a vision of entrepreneurship that appears to be about high-growth, big egos and fast cash, will end up feeling that setting up in business isn’t for them after all.

So we need different approaches, of course we do.  Let’s hope Start Up Britain (and yes, I accept it’s a startup itself, so it’s early days) encourages different approaches and values the small scale, occasionally mundane entrepreneurial activity alongside the high-octane stuff.

Let Start Up Britain also be a challenge for  those of us who perhaps have a slightly different vision of entrepreneurship, and who consider that there may be other ways to encourage more people to set up in business.  What does my city need?  A home-grown Peter Jones?  Or hundreds of people setting up good businesses, of different shapes and sizes, that fulfill them, serve their customers well and set down local roots?  I guess the answer is that it’d be handy to have both – but to have that I think we need to think more broadly about the messages we give out about entrepreneurship.

We ran our first Ideas Circle last night, for the Ideas That Change Lives investment fund.

The aim was to give a group of social entrepreneurs the opportunity to pitch their idea to a group of people to get useful feedback, ideas and contacts.

A few years ago, we would have made a play of how it was a bit like Dragon’s Den (like we did when we ran something similar as part of our Starter for Ten course in 2006) – but it’s fair to say that other than the pitch, it’s got very little in common with that format, which to be frank I can’t stand.

We invited people we know – a PR man, a lawyer, an accountant and a Charity chief exec and a couple of social care professionals – to listen to the pitches.  They all gave up their evening free of charge.  We also asked the entrepreneurs to be part of the circle for the other people pitching – to encourage a bit of collaboration and to get past the idea that we’re all competing against eachother.  In the majority of cases, most of us, as small start-up businesses, will have far more to gain from collaborating than we stand to lose by competing.

We were really pleased with it.  The focus was on giving people constructive feedback – so that (with our support) they can revise their business plan before it goes to the Investment Panel next month.

Needless to say, a few relationships were made and no doubt a few deals will be done too, so that’s all good.

We’re keen to do it again – taking advantage of the fact that a lot of people are keen to help other entrepreneurs, if the opportunity is a good one.  I also think it’ll be increasingly important as other sources of support (such as Business Link) disappear.  We need to find ways to effectively support and nurture eachother – particularly start-up entrepreneurs.

If you’re interested in us running an Ideas Circle for your investment fund or grants programme, please get in touch.

I fell off my bike yesterday – a victim of icy roads.  Nothing broken, but I can hardly move, so have spent most of the day sat on the sofa.  It’s a bit of a pain, as I’ve got loads to do, but as always it’s handy to stop, think and read every now and then, even if the thinking is through the fug of painkillers and anti-inflammatories.

One of things I did was watch a TED video about collaborative consumption:

The talk is by Rachel Botsman, co-author of What’s Mine is Yours – The Rise of Collaborative Consumption, which is released in the UK next month.

I’m a sucker for neat concepts and smart phrases such as Collaborative Consumption, but Rachel thinks this is an idea which has staying power.  She reckons we’re hard-wired to share, and it’s only recently, in the age of hyper-consumption, that we’ve begun to crave ownership of more goods, rather than focusing on just securing access to goods or services.

In a world with finite resources, there are clear, negative environmental implications of us all racing to own and consume.  And there’s a decent argument for saying that our desire for private, exclusive ownership doesn’t do our communities much good either.  If we don’t need anything from anyone else, we’re less likely to engage with anyone else.

But the reverse is true also.  If we acknowledge our interdependence, and also recognise that sharing things can save money, be more green and perhaps build a bit of community then we may well find that our neighbourhoods feel a bit more like the kind of neighbourhoods that most of us aspire to live in.

As I dipped in and out of Twitter today there was plenty of talk of library closures in the UK.  It’s anticipated that lots will close as local councils struggle desperately to make ends meet.

I don’t want to discuss the politics of that just now, but I do want to reflect on the rise of collaborative consumption and the apparent fall of the public library.  If some are saved and run by volunteers, will they continue to deliver the same service ?  Or might they re-imagine their service as a local hub for collaborative consumption?  Maybe I could borrow a guide book to Paris, alongside a power drill?  A power drill that someone else in my community has offered up for sharing – at a fee – shared between them and the library? It might be mission drift, or it might just make libraries relevant to more people.

A vacancy has come up for a parent governor at my son’s school.

In classic school style, a letter was sent home on Tuesday, and your nomination is to be sent in by next Tuesday.  So you have 6 days to consider whether you want to do it and prepare  your personal statement.

The one thing I was advised by most people that I spoke with was “think carefully about it”.  Clearly it’s a bit difficult to think carefully when you have less than a week to think about it, with life going on in the background.

I’d made up my mind to go for it.  I like the school.  Lots of things drive me up the wall about it – poor communication with parents and a seemingly haphazard approach to reading are the main issues – but on the whole I like it.  And more importantly so does Francis.  He’s happy there, and it feels like a nice place to be.  Officially (for what it’s worth) it’s improving – it’s gone from a 3 to a 2 in OFSTED terms – and the Head seems good.

And I want to help, and to influence the school.  The next few years will be tough financially, and they’ll need to work hard to maintain standards and to continue to improve.  I hope that my social business experience could bring something.  I’m also interested in how to involve parents more effectively – so we have a stronger community built around the school.  That exists already in lots of ways (focused around the school gate) but I think more could be done.  And finally, I’d like to see how the school could be more green, and explore how enterprise – in its broadest sense – could form a greater part of school life.

So, it seems, the way to start to make that kind of thing happen is to be a Governor.  But I’ve heard enough from friends who are school governors to suggest that it’s not always the most effective use of your time, if you want to make a difference.  And deep down, I’m not a meetings person – and I fear that it would drive me up the wall.

So, after thinking about it in the short space of time that they’ve given me, I’ve decided not to put my name forward.  Instead, I’m writing to the headmaster to offer him my time and skills.  Maybe I can help them to develop a school travel plan and get more parents out of their cars?  Or facilitate a day looking creatively at how to spend their budget?  Or perhaps I can help them forge better relationships with local businesses?

We’ll see what happens.  But the wider point here is that we need to get better at finding ways to involve people.  Too often, the way for people to get involved in an organisation is to join a committee, or come to a meeting.  That’s one important way for people to be involved.  But it shouldn’t be the only way.  Imagine the skills-set of the 800 parents at our school.  And one or two of them are invited onto the Board of Governors.  Another 20 or so organise fundraising events.  I’m sure more people would happily get involved, if the right opportunities were offered.

As I suggested in this previous post, people’s resistance to volunteering isn’t always a matter of time.

Here’s the final guest post from Liam Black in Bangladesh.

Our delegates have flown off back to Google, Rolls Royce, Astra Zeneca, Lloyds, etc and we have settled all our supplier bills. Flight home leaves in a couple of hours. Absolutely knackered but what a great week. Some of my highlights:

Obviously, spending three hours plus with Muhammad Yunus debating the issues round microfinance and his model of social business was a thrill. Grameen has many challenges, some of it works really well, other parts are rickety; Yunus himself can be inconsistent and a bit slippery. But Christ, look at what the man has created.

You can agree or disagree with him on whether the commercialization of microcredit is simply making money off the poor; get annoyed with the stubborn purity of his non-dividend, non-loss ‘social business’ model; or indeed raise your eye brows at some of the claims he makes about his collaborations with multi nationals. But what you cant put aside is the scale of his achievements not only in terms of the people whose lives he has changed – many millions – but the power of what he stands for in the world. It’s about the poor, stupid.

Not only the younger social entrepreneurs in the room were deeply touched and moved by the man. Even old skeptics like me who’ve been around the block a few times were given a reminder of the simple challenge: when it comes to the battle between the interests of the poor and the interests of the middle classes/rich, whose side are you on?

Again I was hugely impressed with the quality and commitment of the Danone people working their French assess off to make the yoghurt business work. Exec Director Corinne spoke with such eloquence and honesty about the “gymnastiques” involved in struggling to balance the demands inherent in trying to address child malnutrition AND create jobs AND  give the village ladies an income AND be environmentally friendly AND be committed to proving it all. Something will have to give in the next iteration of Grameen Danone Foods but wow what balls they have. How different the world might be if all multinationals sent people like them into the battle against poverty.

“We learn by walking,” she said to us, acknowledging the mistakes and set backs they have received. This is a big reminder to us all who care about changing the world. Wait for the perfect intellectual model and business plan and you will never start the walk at all.

I loved the openness and hospitality of the village people we spent time with. The little boy who wants to play cricket for Bangladesh. The mother who challenged me  – nicely but directly – as to what I would do with the information we were getting from them.

Dr Nabi who runs the Grameen Eye Hospital in Bogra – which operates a cross subsidy model but “Liam, everyone comes and leaves by the same door and gets the same treatment” – made a big impression on us all. His ability to change the lives and fortunes of so many people by giving them back full sight in the face of huge odds means – for at a least a couple of week s anyway – I wont whinge about how busy and stressful my life is! I don’t know I’m bloody born.

It’s not all inspiration and love here though by a long way. Dhaka is a horrible hole which is collapsing under its own weight. Power cuts all day, a road system which means it takes two hours to travel ten miles, a corrupt, inefficient and shameless political class more interested in in-fighting and status then the needs of its people. And – killer fact of the week – 2,000,000 people a year – that’s a year – come on to the labour market in a nation with average 30% unemployment. In the face of that brute reality, arguing about the rights and wrongs of commercializing micro credit seems like a quibbling sideshow.

So, taxi awaits for airport. Thanks for reading this. Thanks Rob for hosting.

Home now for some lovin’ with Maggie, a bag of fish and chips and pint of Guinness.

Liam, Dhaka, 12^th November.

Here’s the second guest post from Liam Black, who’s currently in Bangladesh on an Inside Grameen visit.

Phew. Long old day. Up early and drive through the insanity of Dhaka traffic to a Grameen branch one and half hours outside the chronically overcrowded, choked , dysfunctional capital.  The Grameen structure is (from grassroots up) group (of up to ten borrowers); centre (of 30/40); branch of ten centres; zone; head office; board.  All adds up to 8 million or so borrowers in some 2,900 branches.

Met 30 or so lively women borrowers at a centre meeting (the tall white four eyed stranger was source of much merriment), visited the homes and small businesses of a couple of a big success stories . One woman, a 24 year veteran, now has a fine house and rents out rooms to others. She also served three years on Grameen Bank’s national board of directors – of whose 13 members, 9 are elected from amongst the borrowers. And her daughter is soon to graduate as a teacher.  There is inevitably some canny casting and best foot forwarding for the curious visitors on such encounters .  And without any Bangla, understanding can never be complete but it would be a hard heart indeed that wasn’t moved and impressed by the impacts Grameen makes in the lives of so many individuals.

Then to the branch to meet some ‘struggler’ members. These are former beggars who get interest free loans to sell stuff rather than beg. The women – many of whom were hurled into shame-filled penury by a the death of – or abandonment by – their husbands. Awkward session trying to engage with women whose terribly hard lives were obvious from their haggard and deeply sad faces.

And finally the young people who have been the beneficiaries of education loans. These bright youngsters were very impressive and, with their mums beaming with pride behind them, it was hard evidence that Grameen’s intervention can break the cycle of poverty in families.

The issues we will ask Grameen founder and leader Muhammad Yunus about on Thursday are becoming clearer.

What happens after he goes to the big bank branch in the sky?  There seems to be no succession strategy and I’ve yet to meet anyone here who comes any where near being able to take over a 30,000 strong, multi million pound national bank (plus all the other businesses in the group).

Grameen is a social network, a movement built around a deeply held set of values with a range of financial products at its heart. Leading it would test the mettle of anyone even if that person wasn’t stepping into the shoes of a global icon.

What will Grameen 3.0 look like? The challenges are huge. How does the Grameen Bank – literally the Village Bank – deal with urbanization where poverty is perhaps more acute and desperate than in the rural areas and the stock of social capital much lower?

The bank at grassroots is run with biros and exercise books. Where is the IT infrastructure, the use of mobile phones, the process innovation? What happens when the current generation of bank veterans – at national level and at the grassroots – moves on , those who have the founding principles and passions imprinted on their DNA?

Grameen has renewed itself once before. It needs to do that again. I say this with huge respect for its founder and the phenomenon he has created and its stunning achievements over 30 years plus. Renewal of any organization of such a size is hugely difficult and fraught with dangers.

Tomorrow to Bogra – five hours north of Dhaka – to check out the Grameen Danone Foods joint venture which, since I was here a year ago, has a new MD and staff team.

Going to try and sleep now. Again the Grameen conundrum has got my mind working overtime!

Social entrepreneur Liam Black is with a group of business leaders, social innovators and entrepreneurs in Dhaka for a week.   He’ll be telling us what they get up to over the next few days in a series of guest posts.  Here’s his first post.

Just left room full of 20 jet lagged but revved up people recently arrived in Dhaka for our Inside Grameen week. Senior leaders from the likes of Rolls Royce, Google, Barclays, Unilever, IDEO and social innovators like Sam and Michelle from www.livity.co.uk, Rob of www.bbbc.org.uk and upstarts like Lily, founder of www.mybnk.org. We are all here for a week in Bangladesh to get to the bottom of the Grameen phenomenon and its partnerships with multinationals like Danone.

For me there are two big issues for the week:

1. Does microfinance work and what is the role of commercialised micro finance institutions – MFI’s?
2. Is it possible/right to make personal profit from providing finance for the very poor?  More of this second hot potato later in the trip.

So, does microfinance work or is it a hyped and marginal movement distorted by the high profile of microfinance godfather and social entrepreneur superstar Yunus and his amazing abilities to communicate and enroll the elites of the western world?

Development experts argue about the efficacy of micro-credit (i.e. small loans) as a route out of poverty. One indisputable fact is that after 30 years of microfinance – offered by Grameen and other large suppliers such as BRAC – Bangladesh remains pretty much as poor as it was in relative and absolute terms at independence in 1971. There has been no knock out micro-financed blow against poverty.

There is surprisingly little independent research into Grameen’s work and its real impacts on the lives of poor people in Bangladesh. In 1998 the World Bank reported that 5% of Grameen Bank borrowers moved out of poverty each year. In 2003, Shahid Khondkar again on behalf of the World Bank concluded: “The results of this study strongly support the view that microcredit not only affects the welfare of participants but also the aggregate welfare at village level”. Yunus claims – based upon his own internal survey that “56% of [Grameen’s] borrower families have crossed the poverty line by 2005, on the basis of ten indicators set by Grameen Bank to track impact of its programme”.

Few commentators approach this subject without an ideological axe to grind, but most critics of micro-finance and Grameen – whether from the left or the right – concede that the movement has undoubtedly done a great thing in bringing financial services to poor people and offering an alternative to unscrupulous loan sharks and, by focusing on women, may have contributed to building up their position within society.

But they challenge the overall impact such moves have had on ending poverty. Some critics have questioned Grameen’s claims about the high level – 98% – of repayment and say this is because of clever accounting and rolling over loans to massage the figures. A detailed Wall Street Journal investigation in 2001 made this claim. This is rejected by Grameen.

The New Yorker magazine carried out an extensive investigation into microfinance in 2006:

“Hyperbole distorts the debate on both sides. Yunus speaks eloquently of eradicating poverty, but some argue that microfinance burdens the very poor with debt. Since relatively few rigorous studies on the impact on microfinance have been completed, ideology tends to dominate”.

In India, the government has recently stepped into the unregulated microfinance market and suspended the activities of some providers. There are claims too that anxiety about debt has led to suicides amongst the people. This is strongly denied by the MFI’s involved (which include social entrepreneur golden boy Vikram Akula of SKS who has recently become very rich by ‘privatising’ his MFI)

Meanwhile some Indian MFI’s recently agreed to reduce the interest rates that they charge to borrowers.

New York University’s Professor Jonathan Morduch is a long time researcher in this field who says that there is clear evidence that microfinance can help the very poor but warns that credit alone is not a panacea. It no doubt helps many individuals but loans to the poor have yet to demonstrate an impact on aggregate poverty levels. Quoted in the New Yorker, Professor Morduch said that: “The boldest claim for microfinance – that it can eliminated large part of world poverty –outpaces, by a long distance, the evidence accumulated to date”.

So, much to ponder as we go deep into Yunus rural heartlands on Sunday to meet those who borrow money from him and prepare to debate the issues with the Professor himself next week.

Liam, Dhaka, 5^th November 2010