Muhammad Yunus, renowned Bangladeshi economist, has won the Nobel peace prize this year. He has won the award jointly with Grameen Bank, his own creation.
He is the fourth Bengali to receive the Nobel Prize - preceded by Rabindranath Tagore (1913), Mother Teresa (1979) who lived and worked in Kolkata and Amartya Sen (1998).
As an economics professor, he was involved in a poverty-removal project during the 1974 famine in Bangladesh. Dr. Yunus realized that what the rural poor needed was capital without which the poor folks fall prey to moneylenders charging exorbitant interests. The mainstream banks refused to grant loans to the poor without any collateral. He gave them the much needed initial momentum, in the form of small loans or microcredit. And he was successful. From Grameen Bank’s homepage:
When we started giving out tiny loans under a system which later became known as the Grameen Bank, we never imagined that one day we would be reaching hundreds of thousands, let alone five million, borrowers.
The success of Grameen Bank has been phenomenal. Today it is a huge social enterprise having extended loans to millions of poors. Yunus believes that the poor have skills that are under-utilized. Grameen Bank aims to help them utilize their skills and elevate them financially.
Below is what the Norwegian Nobel Committee had to say in their announcement.
The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. 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.
Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.
Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.
Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity participates on an equal footing with the male.
Yunus’s long-term vision is to eliminate poverty in the world. That vision can not be realised by means of micro-credit alone. But Muhammad Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major part.
The most amazing feature of the programme is the empowerment of womenfolk. As the loans are given to women the family finance revolves around them thus giving them more prestige than ever before.
Another innovative programme of Grameen is aimed at the improvement of beggars. Completely interest-free loans are provided to beggars who are not forced to give up begging. If the beggar can repay his loan, he gets a higher loan. The target is to encourage them to take up professions such as selling vending low-priced items.
Grameen Family
Apart from banking, Grameen has extended its activities to diverse areas aimed at improving social infrastructure. See Grameen Family of Enterprises.
Grameen Facts
- 94% of the bank equity is owned by borrowers. The rest 6% is owned by the Government of Bangladesh.
- Total no of borrowers: 6.61 million, 97% of whom are women.
- 2,226 branches covering 71,371 villages
- Staff strength: 18,795
- Loan recovery rate: An amazing 98.85%!!
- US$ 5.72 billion distributed as loans out of which US$ 5.07 billion has been recovered.
