Exercise 1

A. Now listen to Sarita Gupta talking about microfinance. Complete the information with two-word phrases.

 The idea of microfinance started in the _______ _______.

 The Western world had been _______ _______ to developing countries for many years.

 Yunus realized that poor people need access _______ _______.

 Poor people can’t _______ _______ relatives because their relatives are poor as well.

 Yunus’s first innovation was to make a group of people responsible for _______ _______ a loan.

 Poor people can’t repay a loan all at once with a _______ _______.

 However, they can make small _______ _______ and repay a loan little by little.

 Yunus’s system doesn’t encourage poor people to borrow a _______ _______.

 If they pay back a small amount successfully, they can apply for a _______ _______.


1   mid-70s / mid-seventies

2   giving aid

3   to credit

4   borrow from

5   paying back

6   lump sum

7   regular payments

8   large amount

9   larger loan


I = Interviewer, S = Sarita

I   Where did the idea of microfinance come from?

S   The idea behind microfinance again goes back to the mid-70s. There had been, by that time, several decades of what we call the Western World giving massive amounts of aid to the developing world and a realization that a lot of it was not working, there were still many people who were left poor. So, you know, Muhammad Yunus is credited as being the father of microfinance, he’s an economist living in Bangladesh, a very poor country, and he looked around and he said – What is it that the poor lack? What is that they need? And the answer is obvious, they need money and all of us, in order to get started have had access to credit. So, the poor can’t get access to credit, they can’t go to relatives to borrow because generally the relatives are as poor as they themselves are and they certainly cannot go into a bank and borrow because they have no collateral.


 How did Dr. Yunus solve these problems?

S   There are really three innovations that he came up with that are brilliant in, in hindsight. One was, OK, the poor have no collateral, but let’s figure out a way to create collateral which means, collateral is basically if you’re not going to pay back the loan that somebody’s held responsible. So he came up with a lending methodology where there was a group of peers that were given the loan and they would be lending to each other and the group held each member accountable for paying back.

The second innovation that he came up with is that it’s very difficult for the poor to gather a lump sum to pay back a loan, but if you can break up that payment into very small regular payments that are coming out of your daily income, then it’s feasible to pay back the loan. So what micro-credit did was to break up the, the loan payment into these very sort of regular small payments.

And the third was really an incentive system, that the poor were not encouraged to borrow a large amount, they only borrowed what they could use in their business and then pay back, and if they paid back successfully, then they were eligible for a larger loan.

B. You’re going to listen to Sarita Gupta talk about three success stories. Make notes for each case study in the chart.


The Dominican Republic



The situation she was in




The business she set up





1   The Dominican Republic (DR)

She was making food in her kitchen and selling it to factory workers. With the loan she was able to set up a “cantina” in her living room to sell food and other things, e.g., candy. With a new loan she built an extra room on top of her house and rented it out. Eventually she was able to build a new house and rent out the old one, which will give her security in her old age.

2   Jordan

She was young and looking after her much older husband who was sick. She could not earn money for herself or her children as it is not considered proper for a woman to go out and work. With the loan she bought cosmetics and sold them from home to her neighbors. This gave her extra money to use herself.

3   India

The woman and her husband were uneducated. The husband and their son worked in the informal economy selling vegetables. With the loan she bought materials and embroidered saris at home and sold them direct to a store. This way she was able to double her income without doubling her work as she did not, as in the past, have to go through a “middleman,” who took half the profit.


 Do you have any examples of individual success stories?

S   Oh, I love talking about, individual success stories, because this is what, sort of gets us up in the morning and, you know, gets us to come to work and stay late, and, and do this, this work, since I’ve been at Women’s World Banking I have been to the Dominican Republic, Jordan, and India, so I am happy to give you a story from each, each, each of the three countries.

The DR is a more established economy, if you will, and so the, the woman I met had already had successive loans that she had taken from our partner in the DR and what she did was to start out, she was basically selling food from her kitchen, making excess food and selling it to the factory workers, took out a loan, sort of increased that business and then set up a little cantina out of her living room. So that along with food she was selling cigarettes, beer, candy, etc. That business did well, took out another loan and built a room on top of her house and started to rent it out and so over seven years what she’s been able to do is to completely build a new home for herself and rent out the old one and this is going to ensure income in her old age, because at some point she’s going to be too old to work in the kitchen, and to be, you know, standing on her feet behind the cantina counter and she’s looking at the, the, these rental rooms that she has been able to put on as her, her old age security.


  In Jordan, I’ll tell you about a young women that we met, you know, sort of the cultural norm in Jordan is that a fairly old husband can marry again and marry a fairly young woman, so the one that we met, her husband was now too old and sick so while he took care of the…having a roof over her head, she had absolutely no means of earning more money for herself or her kids, and at her socio-economic level it’s not considered proper for a woman to go out and work. So the only thing that she was able to do, was she had taken a loan to buy cosmetics, and was selling them from her living room to her neighbors and this was considered to be an OK business for her because primarily she was dealing with other women, but it gave her that sort of extra money to use for herself.


 S   And then in India where I was recently in the city of Hyderabad, and Hyderabad is this up-and-coming city, you know, it’s gleaming, it’s, Indians themselves are thinking of it as the next cyber city. But across town they have slums, where even now, both men and women have not gone to school, they’re not educated and their only recourse is to work in the informal economy, so the family that we met, the husband was a vegetable cart – a vegetable seller, so he took his cart and went out into the more affluent neighborhoods, the son had dropped out of school to join his father to push a similar cart, and the mother had taken a loan to embroider saris, and she did this at home, sort of in her spare time and what she really wanted to do was to amass enough income so that she could cut out the middleman, because she basically got half of what the sari was worth, because she was handing it over to a middleman, so that if she could buy the materials herself, embroider it herself, and sell it herself to the store she could in effect double her income without doubling her labor.

Exercise 2

A. Listen to a radio call-in program about saving money. Answer the questions with the names in the list.

Emily   Brody   Maria   Philip   Suki

Which caller has a tip for saving money …?

 at meal times

 at the supermarket

 for vacations

 at home

 on all kinds of purchases

B. Listen again and answer the questions. According to the callers, …?

1   at what temperature should your thermostat be set

2   what should you take to work to eat

3   where should you put your small change

4   how should you pay for everything you buy

5   when shouldn’t you do your food shopping



1 Philip   2 Suki   3 Emily   4 Maria   5 Brody


1 65°F   2 a packed lunch   3 in a can   4 in cash

5 when you’re hungry / on an empty stomach


Host   Hello and welcome to the show. Today we’re looking at different ways of saving money, and we’re asking you, the listeners, to call in with any ideas you’ve experimented with. The number you need to call is 1-800-555-2720 and the lines are already open. And it looks as if we have a caller on line 1. Can you tell us your name, please?

Caller 1   Yes, I’m Maria.

Host   Hello, Maria. What’s your money-saving idea, please?

Caller 1   Well, when I noticed that my energy bill kept creeping up and up, I decided to turn down the thermostat on my heater. Instead of setting it at 72°, I turned it down to 65°, and it’s made a big difference. I pay about $25 less on my heat bill than I did before, and if I feel cold, I put an extra sweater on.

Host   That sounds like a great idea, Maria. Most of us have our heat on too high, so it makes sense to turn it down to pay less- and save energy at the same time. OK, thanks Maria. There’s another caller on line 2 – Philip, is that right?

Caller 2 Yes, it is.

Host   What do you do to save money, Philip?

Caller 2   Um, I always take a packed lunch to work. We have a small kitchen on my floor with a microwave, so we can bring our food in a plastic box and heat it up. I usually take what’s left from dinner the night before, but if there isn’t anything hot, I make a salad. It’s definitely a lot cheaper than having to pay for a meal every day.

Host   Thanks for that, Philip. Yeah, taking a packed lunch is an excellent way of saving money when you need to have lunch at work. OK, our next caller is Emily. How do you try to save money, Emily?

Caller 3   Um, yeah, um, a couple of years ago, I decided to start putting all my change in a coin jar at the end of the day. I have one of those big coffee cans, so it takes a long time to fill it up. It’s my way of saving up to go away in the summer – I wouldn’t be able to afford it, otherwise.

Host   Those coffee cans are great for saving money in, aren’t they, Emily? Back to line 2 for our next caller. What’s your name, please?

Caller 4   Brody.

Host   Brody, tell us your money-saving idea.

Caller 4   Well, it might sound radical, but I cut up all of my credit cards last year. Now, I only use cash. Paying in cash really makes you think about how much you’re spending – if you use a credit card, you tend to lose control, to some extent. It’s worked for me, anyway, and I’ve cut my spending by about 20%.

Host   Brody, that’s certainly the bravest solution we’ve had so far. OK, we have time for one more call, Suki on line 1. What’s your money-saving idea?

Caller 5   Um, it might sound weird, but I’ve found that it’s a really bad idea to go shopping on an empty stomach. When I’m hungry, I end up buying lots of snacks on impulse – it’s such a waste of money. So now I do my shopping right after I’ve eaten some food and I don’t spend half as much.

Host   That makes sense, Suki, thank you for calling. Well, I hope that the rest of our listeners have found those ideas useful. And now it’s time for the news …

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