'Village' bank arrives with help from Tesco


Click to follow
The Independent Online

The global micro-finance phenomenon known as Grameen will arrive in Scotland early next year. Its aim is simple: to offer financial support for aspiring entrepreneurs in deprived areas.

And backing the concept is Tesco, more often criticised for pushing local small firms out of business. In fact Tesco Bank is stumping up £500,000 – half the initial loan capital – for Grameen's first UK venture in Glasgow.

The idea began in Bangladesh in the 1980s, and has since successfully spread around the world to some 38 countries. Its founder is the Nobel prize-winner Muhammad Yunus, who started by handing his own cash to 42 workers who were in debt to loan sharks. Once they were free of punitive interest charges, the workers were able to repay the money to Professor Yunus and get on with their lives.

He founded Grameen – which essentially translates as "village" bank – soon after, to give funding and guidance to help people start their own small enterprises. "Poor people need to be given the right opportunities," he said.

Benny Higgins, boss of Tesco Bank, explained why it has backed the project: "We will provide loan funding, professional guidance from our staff and access to our stores to help set up new businesses which, over time, can improve the local economy."

If successful, the community concept – which has similar aims to credit unions – could soon spread to other parts of the UK. That could spark an improvement in local economies nationwide.

Looking for credit card or current account deals? Search here