Bangladeshi Inventor of Microcredit Wins Nobel Peace Prize

[yolland]

Bangladesh bankers to the poor win Nobel Peace Prize

Reuters, Oct 13, 2006
By John Acher

OSLO - Bangladeshi economist Muhammad Yunus and the Grameen Bank he founded won the Nobel Peace Prize on Friday for grassroots efforts to lift millions out of poverty that earned him the nickname of "banker to the poor".

Yunus set up a new kind of bank in the 1976 to give credit to the very poorest in his native Bangladesh, particularly women, enabling them to start up small businesses without collateral. In doing so, he invented microcredit, a system which has been duplicated across the globe.

"In Bangladesh, where nothing works and there's no electricity," Yunus said, "microcredit works like clockwork."

The Nobel committee awarded the prize to Yunus and Grameen Bank "for their efforts to create economic and social development from below," it said in its citation. "Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights."

Yunus was convinced women could break through poverty by taking tiny loans to start or expand tiny businesses. The Grameen Bank now serves 6.1 million borrowers. The Grameen Foundation, which grew out of the bank, was founded in 1997 and has a global network of 52 partners in 22 countries that has helped an estimated 11 million people in Asia, Africa, the Americas, and the Middle East.

This is a very worthy recipient for the Nobel. As mentioned, Yunus and his bank are known not only for pioneering the idea of loans to people too poor to qualify for traditional bank loans, but also for their focus on women--Yunus started out, as an economics professor motivated to act by the awful Bangladeshi famine of 1974, by making loans to women engaged in small handicrafts directly from his own pocket. 96% of Grameen's loans have been to women--who, as Yunus has often noted, are both disproportionately likely to suffer from poverty, but also consistently more reliable at paying back microcredit loans and at using all their earnings to help their families and communities. Grameen has at times been subjected to damaging boycotts from fundamentalists due to their focus on encouraging women, but these boycotts have not held.

As mentioned, Yunus' microcredit lending model has now spread to dozens of developing countries all over the world. 94% of Grameen's equity is owned by its borrowers, their repayment rate is an excellent 98.5%, and according to government statistics, some 50 million Bnagladeshis have been lifted out of extreme poverty thanks to projects and ventures made possible by funding from Grameen. In addition, Grameen has also set up a mobile telephone company using the same microcredit model, which has made mobile telephones available to almost half of Bangladesh's villages.

 

[Habib]

I've just read this article on the bbc website and having Bangladeshi roots, am proud that someone from my parent's homeland has achieved such a globally well known prize.

I will be going to Bangladesh in December to see the fruits of his labour.

 

[sulawesigirl4]

Very cool. When I was in training to be a small enterprise development volunteer with Peace Corps Mali, we studied the Grameen Bank model and used it extensively in our work.

 

[Irvine511]

 

[Liesje]

Wow, great pick! I studied microcredit and microloans while in Tanzania and it's an amazing concept.

 

[verte76]

Very cool. He really deserves it.

 

[Bono's shades]

 

[dazzledbylight]

a great choice!


I probably first heard about him & his work....through Public Radio
maybe in the late 80's early 90's.


Many women with little choices before them have been empowered by his work!
As word of his ideas & its' sucess spread - models have been used in the USA as well.