I n February 1997, Majeda Ahmad discovered that the man she had lived with for 12 years was no longer her husband. The news arrived in a letter addressed to her husband and written by the new wife he had taken during a secret trip to Bangladesh the previous year. Majeda walked out of their arranged marriage and her home in Worthing. By the end of 1997, she had arrived in London to try and start a new life, only to find herself homeless after two weeks. Now, at the age of 47, Majeda has slowly begun to piece her life back together, She has a council flat in Stepney Green and a job in an international telephone call centre. She has also become one of the first five women in Tower Hamlets, East London, to start a preparatory course learning about microcredit. This is a

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Last month, the Homeless Families Campaign (HFC), a charity based in Tower Hamlets and closely associated with the East End�s Grameen Foundation, began a pilot test on the microcredit scheme. Microcredit may have come a long way physically, but the scheme is piloted in much the same culture as the original Grameen Bank. The population of the Brick Lane area around the HFC�s East End headquarters is around 70 per cent Bangladeshi, and has been unofficially known as �Bangla Town� for the years.

The HFC scheme will initially also follow the Grameen Bank's focus on helping women, who are more likely to be excluded from other sources of finance. Majeda, a science graduate and a former Save The Children worker, is the starting point. She will study the concept behind microcredit, as well as basic banking, accounting and book-keeping skills for the next 12 week. HFC hopes that microcredit will eventually help the poor across the whole of London. Sunahwar Ali, one of the organisers of the scheme, says: "The community we're working with in Tower Hamlets is mainly homeless people and those who are long-term unemployed. Most of our client group is Bangladeshi, but we'll be encouraging other cornmunities to come along and take the opportunity." If the six-month pilot scheme is successful, Sunhwar hopes to be able to offer microcredit loans to all by next year. Microcredit is based on social collateral; borrowers will work in groups of five and the members of the group will use their loans to start a small business, or micro-enterprise.

Although final figures have yet to be agreed upon, the maximum loan on the HFC scheme will probably be about �500, repaid with an administrative charge of around seven percent. All the money will be lent and repaid in front of the whole group, so if one borrower defaults on payments, it will directly affect their micro-enterprise partners. In some schemes, worldwide, this has resulted in a repayment rate as high as 98 percent.

Shafir Rahman, an expert on microcredit in South Africa at the Cambridge African Studies Centre, warns that, although successful in certain contexts, microcredit schemes can and do fail. Each enterprise group dynamic must be solid and have good leadership in order to work. "In these schemes you can have interest rates of up to 50 per cent a year and an enterprise still won't work." It is vital, he believes, that microcredit schemes cover the costs of lending, which can be high due to the large amount of contact time necessary between borrower and lender and the administrative costs of running the project.

Still, for Majeda, microcredit offers real hope. "I want to start again, a better life, a new life," she says. Perhaps just as importantly, Majeda hopes to put her involvement in the scheme to good use by helping other women in the Bangla Town community. "I don't want anybody to have to fate what I did," she says. "I will go anywhere to convince and motivate people to come to this scheme."

Nipa Begum, another HFC microcredit student also hopes to become more independent through the scheme. Arguments forced Nipa and her son, now three years old, to leave the home they shared with her husband�s family. After staying with another group of relatives, and visiting Bangladesh, Nipa found herself deemed intentionally homeless and so was denied council accommodation in September 1997. Her primary goal is to get out of the women�s hostel where she currently lives. She needs a job and a house if she is to bring her husband, who lives in Bangladesh, to London.

Speaking through an interpreter, Nipa says she can't imagine achieving anything while she is still in the hostel. Although successfully running a micro-enterprise with her fellow trainees seems remote now, still, the 22-year-old believes in the scheme. "If I go on the training course, it will be better for me. I'll be able to look after myself and do something," she says.
 

Still with the scheme in its first stages, there are some major stumbling blocks to overcome. The benefits system is one. At present, anyone claiming Jobseekers' Allowance would lose their money as soon as they started a micro-enterprise. Single parents would also start to lose income support if they were to earn more than � l5 a week.

According to Sunahwar, the Grameen Foundation, as advisers of HFC, is lobbying Parliament in an attempt to change the benefits system. They have already enlisted the support of Clare Short, MP.Ultimately, for families and individuals caught in the seeming inescapability of the poverty trap, micro-loans may not only offer a way out, but could even change the social conditions which create that inequality. As Sunawhar says: "Thatcher destroyed the whole concept of community. The way Grameen works is by creating the community again. It's not just giving loans, it's educating the people."

The Homeless Charity Campagin can be
contacted on 0171-377 5185