SDG 10 Case Study: Microfinance as the Instrument to Reduce Inequalities in Bangladesh

Sustainable Development Goal 10 (SDG 10), “Reduced Inequalities,” aims to create a more equitable and inclusive society, fostering social, economic, and political equality. SDG 10 acknowledges the pressing requirement to tackle inequalities within nations and among countries to secure a fair and resilient future for everyone. It emphasises the significance of balancing economic progress, environmental sustainability, and social justice.

Inequalities in today’s world take many forms, such as differences in income, wealth, education, healthcare, gender, race, and access to essential services. These disparities threaten social stability and cohesiveness and obstruct efforts to promote sustainable development. To address differences in income, wealth, access to resources, opportunities, and access to essential services, SDG 10 underlines the necessity for targeted policies and actions. By lowering inequities, we can advance social cohesiveness, encourage economic expansion, and build a more prosperous and sustainable world. By addressing inequalities, societies may promote economic progress, release everyone’s potential, and create resilient communities.

This article explores the significance of SDG 10, presents five sustainable business strategies for achieving this goal, and provides a case study on how microfinance helps reduce inequalities in Bangladesh.

Sustainable Business Strategies for SDG 10

By actively promoting the elimination of disparities and the creation of a more inclusive and equitable world, businesses play a crucial role in attaining Sustainable Development Goal 10 (SDG 10). SDG 10 offers a framework for companies to implement sustainable business practices that support collaboration, education, philanthropy, diversity, and fair compensation. Businesses may support SDG 10 by implementing these tactics while promoting good change, innovation, and a more equitable society. Companies can attain the five sustainable business strategies listed below to contribute to SDG 10:

Promoting Diversity and Inclusion: Embracing diversity, advocating for gender equality, and providing equal opportunities to all employees allows businesses to cultivate an inclusive work environment. This approach fosters diverse perspectives, stimulates innovation, and contributes to dismantling societal barriers.
Ensuring Fair Wages and Benefits: Providing fair compensation is critical to reducing economic disparities. Businesses should adopt guidelines that ensure fair pay, all-inclusive benefits, and equitable remuneration for similar labour. Using this strategy, they advance their workers’ welfare and help create a fairer and more well-balanced society.
Supporting Education and Skill Development: Programs for skill development and education that are easily accessible are crucial in reducing inequality. Businesses can help by sponsoring initiatives allowing disadvantaged areas access to high-quality education and providing scholarships, career training, entrepreneurship and mentorship programs.
Engaging in Philanthropy and Corporate Social Responsibility (CSR): Businesses can help to lessen inequality by taking an active role in humanitarian endeavours and implementing CSR. This may entail supporting NGOs and charitable groups that strive to empower marginalised groups and deal with social problems.
Collaborating with Stakeholders: To collectively address inequalities, businesses need to engage in collaborative partnerships with stakeholders such as government entities, non-profit organisations, and local communities. By working together, this collaborative approach facilitates a more holistic and effective strategy, leading to sustainable solutions that tackle the root causes of inequality.

Case Study: Microfinancing model by Grameen Bank to uplift communities and promote women’s empowerment for equality

Grameen Bank, a renowned microfinance organisation, has been instrumental in advancing SDG 10 by lowering inequality within and between nations. By giving them access to financial services and promoting inclusive economic development, Grameen Bank has empowered underprivileged people, particularly women, through its creative microcredit programs. This case study investigates how Grameen Bank’s activities have affected Bangladesh, stressing its contribution to community uplift, women’s empowerment, and long-lasting transformation.

Background

Muhammad Yunus, a Nobel Prize winner, established the renowned microfinance organisation Grameen Bank in Bangladesh. It has been essential in advancing SDG 10, which aims to lessen inequality within and between nations. Grameen Bank’s novel approach to microfinance has empowered underprivileged people, particularly women, by giving them access to financial services and promoting inclusive economic development.

Challenges

Bangladesh has suffered for a long time with high rates of poverty and restricted access to financial services, particularly in rural areas. Many vulnerable communities, especially women, were denied financial resources due to the absence of official banking institutions and collateral requirements. This exclusion hindered social and economic advancement and maintained inequality.

Solutions

Inventing the idea of microfinance, Grameen Bank transformed the financial system by providing those without access to standard banking services with modest loans or microcredit. The following essential elements were part of the bank’s solution:

Group-Based Lending: A group lending strategy was created by Grameen Bank, in which borrowers create self-help groups. These organisations assist one another and serve as guarantors for one another’s loans, doing away with the requirement for collateral. This strategy promotes community growth and social cohesiveness.
Focus on Women Empowerment: Grameen Bank gave lending to women borrowers top priority because it recognised the strength and potential of women. The bank wanted to empower women economically by giving them access to capital to launch and grow small enterprises, boost their income, and enhance their general well-being.
Financial Education and Social Development: The functions of Grameen Bank included social development and financial literacy efforts. The training that the borrowers got improved their knowledge and abilities in the areas of healthcare, entrepreneurship, and financial management. The bank also promoted healthcare, education, and environmental sustainability spending in line with the SDGs.
Repayment Culture and Sustainability: By cultivating a strong culture of loan payback, Grameen Bank ensured borrowers were responsible for their debt. Borrowers attended regular weekly meetings to debate social issues and repay payments. Due to the discipline and sense of ownership, this technique gave the borrowers sustainable loans, and the money was available for use in later loan cycles.

Impact

The impact of Grameen Bank’s support for SDG 10 through microfinance has been profound:

Poverty Alleviation: Millions of people have emerged from poverty thanks to the microcredit initiative of Grameen Bank. By offering small loans, lenders have enabled borrowers to launch revenue-generating ventures, boost household income, and enhance living standards. As a result, poverty rates have decreased, and general well-being has increased.
Women Empowerment: Grameen Bank’s emphasis on female borrowers has empowered countless women by providing them with financial resources and the opportunity to start their businesses. Women have increased their ability to make decisions, questioned societal conventions, and contributed to the advancement of gender equality by earning more money and being more independent financially.
Social Development: The bank’s comprehensive approach, which incorporates financial education and social development programs, has resulted in good societal transformation. Borrowers have increased their understanding and habits in health, education, and the environment. As a result, healthcare results have improved, school enrollment has increased, and environmental knowledge has increased.
Community Transformation: Grameen Bank’s group-based lending approach has promoted community development, social cohesiveness, and mutual support. Self-help organisations have developed into social mobilisation hubs that let borrowers work together to solve problems of common interest. As a result, community infrastructure has improved, social capital has expanded, and community inequities have decreased.

Conclusion

Finally, Sustainable Development Goal 10 (SDG 10) recognises the urgent need to minimise inequalities within and across nations, building a more egalitarian, inclusive, and resilient society. SDG 10 strives to promote social cohesion, economic prosperity, and sustainable development by addressing income, wealth, resource access, and opportunity gaps.

Businesses can help achieve this goal by supporting education, encouraging diversity, providing fair salaries, participating in philanthropy, and working with stakeholders. The microfinance model used by Grameen Bank is an excellent illustration of the positive effects of giving people, especially women, access to financial resources. We can help reach SDG 10 and build a better future for everyone by adopting sustainable business practices and supporting programs like Grameen Bank.