Friday, October 13, 2006

More Powerful than Bombs and Bullets

I have often held the Nobel Peace Prize in low esteem – after all, they did give it to Yasser Arafat! But, as a Christian, I could not be prouder or feel better about this year’s award. Bangladeshi economist Muhammad Yunus and the Grameen Bank he founded won the prize for their pioneering use of tiny, seemingly insignificant loans, called microcredit, to lift millions out of poverty. Through Yunus's efforts poor people have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead. He said he would use part of his share of the $1.4 million award money to create a company to make low-cost, high-nutrition food for the poor. The rest would go toward setting up an eye hospital for the poor in Bangladesh. Yunus said, “Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Development from below serves to advance democracy and human rights.”

Yunus’s Grameen Bank was the first lender to hand out “microcredit,” giving very small loans to the poor who did not qualify for loans from conventional banks. No collateral is needed and repayment is based on an honor system. The bank says it has a 99 percent repayment rate. Yunus said that his “eureka moment” came while chatting to a woman weaving bamboo stools with her fingers. He asked her how much she earned. She replied that she borrowed about nine cents from a middleman for the bamboo for each stool. All but two cents of that went back to the lender. ”I thought to myself, my God, for nine cents she has become a slave. I couldn't understand how she could be so poor when she was making such beautiful things.” The following day he discovered that 43 of the villagers owed a total of about $27. “I couldn't take it anymore. I put the $27 out there and told them they could liberate themselves and pay me back whenever they could.” They all paid him back, and his spur-of-the-moment generosity grew into a full-fledged business concept that came to fruition with the founding of Grameen Bank in 1983. The bank says it has lent $5.72 billion to more than 6 million people.

Soure: The Associated Press.

1 comment:

Chris Gillespy said...

This is a good post. Thank you for sharing, I did not know of this.