The gulf between rich and poor Americans is widening, and this expanding inequality is threatening the very concept of the American Dream. While our society has created stereotypes about what it means to be poor, the fact is that financial instability threatens Americans across the middle class – millions of middle class Americans are one pink slip or medical emergency away from financial crisis. For those living below the poverty line – life continues as a struggle. According to the U.S. Census Bureau, there were 43.6 million people in poverty in America in 2009 and 73 million people living in America without access to a savings account or the ability to borrow money for housing, transportation or entrepreneurial opportunities that provide pathways out of poverty.
Clearly, financial literacy and financial stability weigh heavily on the minds of all Americans today. The current financial crisis has driven home how close Americans really are to financial distress. Our lack of financial literacy compounds the problem and cuts a broad swath through society from those living in poverty to the middle class and beyond.
Grameen America requires prospective borrowers to form or join a group of five members, who meet weekly. These groups are organized into “centers”, with 3 to 6 groups to a center. Centers meet weekly in borrowers’ homes or a local community center. The group and center model encourages a culture of financial responsibility where peer-support leads to 99% rate of repayment. The group also serves as a social network of voluntary mutual support, as members are individually responsible for their own loans, they are expected to voluntarily provide assistance to their peers where needed.view details