A microcredit program called Danone Microcredit Foundation has been started in Beijing in order to give small loans to families affected by the 2008 Sichuan earthquake. The project is a collaboration between three parties, the State Council Leading Group Office of Poverty Alleviation and Development of China (CPAD), a government office tasked with organizing research, drafting policies and programs to solve major issues in China’s developing areas, Grameen Trust, a sister organization of Grameen Bank, and Danone Group, a global food conglomerate. Six cities and counties were chosen as trial areas for the program, including cities of Mianzhu and Shifang, which were hugely affected by the earthquake, and as of 2008, the program gave over 100 families their first loans.
After the deadly earthquake hit the SiChuan province of China, CPAD announced it would be working with Grameen Trust and Danone Group to establish Danone Microcredit Foundation. In accordance with the agreement made in July 2008 between the three parties, Danone has offered RMB 20 million (USD 3.0 million) to CPAD over 10 years to finance the program, and Grameen Trust in Sichuan province has distributed and managed the fund. Grameen Trust is a sister organization of microfinance institution (MFI) Grameen Bank in Bangladesh and provides technical and financial support to MFIs around the world. For more on Grameen Bank, please read this MicroCapital article. Danone is a publicly traded French company founded in 1919 which specializes in the food industry. In 2007, Danone Group reported revenue of EUR 12.78 billion (USD 16.6 billion).
Cooperation between Danone and Grameen Bank dates back to 2006, when they set up a joint venture Grameen Danone Foods in Bangladesh to provide cheap, nutritious yogurt to impoverished children, but this is the first time they have entered the Chinese market. For more on Grameen Danone Foods, please read this MicroCapital article. Dr. Muhammad Yunus, founder of the Grameen Bank, hopes that this foundation and microcredit model will be an example for other countries.
By: Andrea Chu
ADDITIONAL RESOURCES
Creiglish.com, March 13, 2009, “Quake-hit Sichuan to be Assisted by Microcredit“
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