Small loans to poor can change the world, says Nobel winner
UNITED STATES: Declaring credit a human right, Nobel laureate
Muhammad Yunus said that the successful micro-lending bank he launched
in his native Bangladesh showed wiping out world poverty was a goal
within reach.
Yunus said Grameen Bank's miniscule loans to the destitute have
allowed people to launch their own small businesses and lift themselves
out of poverty without any massive infusion of outside aid.
"Poverty is an artificial creation of a system. Poverty is not in the
person," Yunus said in a speech in Washington.
The economics professor was awarded the Nobel Peace Prize last month
jointly with Grameen Bank, which began with a loan of 27 dollars and now
lends nearly a billion dollars a year to the poorest of the poor.
"Fifty-eight percent of Grameen borrowers have moved out of poverty,
and every year, every month more and more people are getting out of
poverty," Yunus told an audience at the National Press Club.
"If people can do business and get out of poverty, what happy news
for the whole world," he said. "We can create a world completely free of
poverty."
He said conventional financial institutions and services were closed
to most of the world's population, depriving people of a means to help
themselves. "Credit should be accepted as a human right," Yunus said.
"Human beings are very creative beings. All kinds of creativity and
ingenuity is built into the person," he said. And micro-credits were
about "unleashing that creativity."
Yunus set out to help the poor after famine struck Bangladesh in the
1970s, shaking his assumptions about economics.
"I started to dread my own lectures," Yunus wrote in his
autobiography, "Banker to the Poor". "What good were all my complex
theories when people were dying of starvation on the sidewalks and
porches across from my lecture hall?"
After learning that 42 people in the nearby village of Jobra were
locked in deep poverty for want of 27 dollars, Yunus eventually
established a bank that lent small sums of money at modest interest
rates without demanding collateral in return.
Now the bank has close to seven million borrowers and has expanded
its services, including education and pension funds as well as loans, to
street beggars.
Yunus said the bank's wide reach has helped reduce poverty in
Bangladesh and that by 2015, the country would likely meet a United
Nations goal of cutting poverty in half. According to a recent joint
study by the World Bank and the Bangladeshi government, the proportion
of poor fell to 40 percent from 49 percent in the past five years.
Yunus reiterated his recent criticism of the World Bank, saying it
should focus projects more on empowering local communities instead of
channeling aid through governments. But the World Bank says it is
committed to micro-credit projects.
While the idea of micro-finance had received widespread attention
previously, the Nobel prize has given Grameen Bank's work a whole new
level of interest and publicity, Yunus said.
"I am amazed at what one recognition of that nature can transform
everything overnight," said Yunus, who earned a doctorate in the United
States.
He said he was especially pleased that the Nobel prize had linked the
fight against poverty to peace efforts. "This is one message that kind
of gets lost ... that poverty is a threat to peace," he said.
The Grameen Bank provides an example of what Yunus called a new
category of "social business", a venture designed to address a social
problem while generating no dividends but no losses either.
"The present narrow view of business has to be expanded. You can have
two kinds of businesses, one is business to do good to people and the
other is to make money."
Washington, Tuesday, AFP |