I do agree that the microcredit system isn't perfect, but I don't think it's worthless. Part of the beauty of the Grameen bank is that it's decentralized. Members of the 'bank' in a community band into a club that supports eachother (and often covers eachother's asses when a member is financially tight). This club needs to elect an officer (rules of the Grameen bank) who will speak for the club and answer to the creditor. You don't need a financial expert for the creditor here. You just need to let the members know how best they can use their money. This isn't affluent citizens trying to make an informed financial investment here. Their economy isn't that complicated. We're talking about the very poor, who have skills, but lack the small amount of capital to invest in their skills. We're talking about skills like basket weaving, banana picking, fishing, etc. And if I remember correctly, some of the 'financial experts' that go around communities collecting interests and dishing out membership were members themselves.
My point is this is quite a positive-feedback system. And it has expanded out of India into poor communities of surrounding nations.
You're right, any process that sits down and examines every single applicant will have a higher success rate. But here's what I'm impressed about:
1. Even though he's examining every person (in that the system finds out how the debtor can best use the money), the Grameen bank is cost-effective. The fact that it still exist and is expanding is proof enough.
2. A lot of people have ideas. He did something with his. And he started just by loaning about $25 to the poor in his village (out of his own pocket).
I do agree that we should address the problem instead of pumping more money into waste. The problem is how to go about it. I agree fully that if we can upgrade the infrastrcture of nations struggling with poverty, the problems will solve themselves. The only problem is there is a lot of people who would like to see otherwise. I don't think the warlords in a lot of African nations give a crap about the poor, and actively raid aid support. A lot of governments of some of these poor nations themselves would rather hang on to capita and enjoy themselves than invest in the future of their people. Western nations who rely on low labour costs from these poor nations will also be reluctant to make the people more affluent. And as you said, even private aid agencies have alternative motives. One person's loss is often another person's gain.
There is no easy solution to this. How do you fight the greed that ingrained in so many people's minds around the world?
I certainly don't have an easy solution.
But I'm glad there are people out there who are truthfully trying to make a change. Even though Yunus tries to decentralize his system to minimize alterior motives, his system isn't perfect. But it's a start. And even though the peace prize went to him alone, I'm sure there are many others who are trying to do the same.
