Greens propose youth enterprise microcredit scheme
For immediate release 19 January 2010
The Scottish Green Party today called for the establishment of a small loans scheme designed to help 16- to 19-year olds set up their own businesses, and Parliament will vote on the proposal on Thursday morning. The scheme is inspired by the model set by the Nobel prize winner Professor Muhammad Yunus, who founded the Grameen Bank to provide micro-finance for people living in poverty in Bangladesh, and which is now growing in America too, with projects being established in New York, Nebraska, Washington and California. Thirty-eight countries worldwide are now using this model.
The scheme proposed by the Scottish Greens would offer loans for small business ventures to young people who are not in education, employment or training. It would would offer support investment in equipment or money for stock, tools or the other basic equipment required for small business ventures. The most recent Scottish Government figures show that 36,000 young people were not in education, employment or training in 2009. The party supports a £2m fund, with half the money coming from Scottish Government funds and half as matched funding from business.
The Youth Microcredit scheme would be suitable for small scale retail operations, recycling, urban food growing initiatives or distribution businesses and would be supported by an entrepreneurial mentoring scheme. The experience of the Grameen Bank suggests that loans of this sort have a very low default rate, so the fund would quickly become largely self-financing, and could subsequently be expanded to support older participants.
Robin Harper MSP said:
"Scotland's young people are fizzing with ideas and energy, but they are also likely to lose out as the cuts begin to bite. We can choose whether we support their ideas with an internationally-proven model, or whether we're prepared to risk another lost generation.
"With a microcredit scheme of this sort, aimed specifically at young people, there is an opportunity to establish something new and influential. With a bit of mentoring and finance, we can help young people across the country set up their own businesses and start to tackle the problem of successive generations living with poverty.
"The Grameen model of bank credit began in Bangladesh, but is now growing quickly in the United States and elsewhere. It is part of a movement that looks for innovative ways to return to traditional financial values around prudence and responsibility, emphasising genuine links with the community and individual customers, rather than continuing to rely on the speculative banking model which led to so many problems here and internationally."
Notes
1. Title: Opportunities for Young People
That the Scottish Parliament commends the work of Nobel prize winner Muhammad Yunus in founding the Grameen Bank in 1976, which provides micro-finance for people living in poverty in Bangladesh; recognises that, since its beginnings in Bangladesh, there are now Grameen-type programmes tackling poverty across thirty-eight countries the world and that Grameen America is now branching out to many new locations in New York, Nebraska, Washington and California; believes there is an opportunity to tackle the growing problem of unemployment among 16 to 19 year olds with the establishment of a microcredit scheme for young people in Scotland; notes that this scheme would offer loans for small business ventures to young people who are not in education, employment or training and be supported by an entrepreneurial mentoring scheme; further believes that such a scheme would build on the contribution made by Scotland’s social enterprise sector and draw upon Scotland’s long history of entrepreneurial achievement, and calls upon the Scottish Government to explore ways to establish a Scottish Youth Microcredit scheme.