Today's New York Times carries the following report on Nobel Peace Prize winner Muhammad Yunus, founder of the Grameen Bank in Bangladesh.
I decided to post the entire story because of its significance in understanding how poverty should be addressed and overcome. Yunus has a lot to teach the entire world.
Many of his principles find ready application in urban centers like Dallas which has a branch of the Grameen Bank!
Just lending and banking policies that move beyond greed and allow the poor into the marketplace play a key role in lifting the poor.
I found what Yunus says about world poverty and terrorism to be particularly interesting.
Here's the full story:
Nobel Peace Prize Winner Will Urge Banks to Lend to the Poor
by Walter Gibbs
OSLO, Dec. 9 — Bangladesh’s “banker to the poor,” Muhammad Yunus, said he would use his newfound celebrity as this year’s Nobel Peace Prize laureate to urge banking and investment institutions everywhere to make small business loans to the poorest people they can find.
“This is a movement that is going around the world,” he said at a press conference. At a ceremony here Sunday, he and the bank he founded, Grameen Bank, are to be awarded the prize.
Dr. Yunus, 66, is credited with inventing microfinance, or the practice of lending small amounts of money to destitute people, 30 years ago. The idea is for borrowers — almost all of them women — to start or expand money-making enterprises like weaving, rope-making, vegetable farming and holding livestock.
He said Bangladesh, with its population of 145 million, was en route to halving the number of people classified as extremely poor by 2015, thanks in part to the availability of microloans as small as $12 and averaging $200. “If Bangladesh can do it, anyone can do it,” he said.
The prize is to be awarded in equal parts to Dr. Yunus and the Dhaka-based bank, 90 percent of which is owned cooperatively by the 6.7 million people who currently owe it money. The bank’s half of the peace prize will be given to board member Mosammat Taslima Begum, who said today that she first borrowed money from Grameen to buy a goat, then borrowed more to buy three goats. Now she owns a plot of land with an income-producing mango patch.
Dr. Yunus urged the United States to recalibrate its strategy for fighting terrorism and to address what he said were its “root causes”: poverty and injustice. He said microfinance was a tool for peace as well as prosperity, and lauded the Norwegian Nobel Committee for making the connection.
“Poverty is a threat to peace,” said Dr. Yunus, a native Bangladeshi with a Ph.D. in economics from Vanderbilt University in Tennessee. “This has been talked about before but never in such a resounding manner.”
In the 30 years since he started lending money to the poor more than 3,000 other institutions have emerged to provide loans of a similar nature. Grameen Bank requires no collateral of its borrowers but charges most of them interest of about 30 percent per year. Currently there are 85,000 beggars in the portfolio who are exempt from interest charges, Dr. Yunus said. The high payback rate — estimated at 99 percent — has drawn banks like Citigroup, ABN Ambro and Deutsche Bank into the microcredit market, though Dr. Yunus has criticized them for largely ignoring the poorest of the poor, whose goal may be no more than a tin roof.
“Nobody should be left out of the financial system,” he said today, adding than two-thirds of the global population has no access to banking.
Resistance by conservative Muslims who originally opposed Grameen Bank’s business dealings with women and its reliance on interest charges has largely evaporated, Dr. Yunus said. He characterized the remaining opponents as a “fringe.”
He said female loan recipients were far better than men at saving and using proceeds to benefit all family members. And without the ability to charge interest, he said, there would be bank.
“This is a self-sustaining system,” he said. “If we didn’t take interest, the whole system would become dependent on somebody’s charity. To reach billions of people, this has to be a business.”
Sunday, June 16, 2013
14 hours ago