Since the 1970s, organisations, such as the Grameen Bank in Bangladesh and Accion International in Latin America, have encouraged poor borrowers to form groups to cross-guarantee each other's loans. Only when she repays it can the next woman in the group borrow. Peer pressure makes sure that default rates are minimal. The idea has spread. Each borrower is thought to support about five family members.
Most borrowers are women.
Microlenders prefer to lend to women because they are likely to use additional income to feed and clothe their children. Men, as the proprietors of the Otim bar can testify, may blow the spare cash on booze. Microcredit works better than handouts for two reasons. First, it fosters enterprise rather than dependency. The business plans backed by microfinanciers tend to be breathtakingly simple.