Monday, November 13, 2006

Asian Heroes: Muhammad Yunus and the Grameen Bank

As I wrote before, Bangladeshi economist Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize 2006 for their pioneering use of tiny loans — microcredit — to lift millions of people out of poverty. A true Asian hero.

Poor people, especially women, have been able to buy cows, a few chickens or the mobile phone they need, thanks to Grameen Bank.

YouTube has a video of the announcement by the Norwegian Nobel committee chairman. A great speech.

In this October 2002 article Grameen Bank II: Designed to Open New Possibilities, Muhammad Yunusa describes lessons learnt since starting 1976. The central assumption behind Grameen Bank, he writes, is

the firm belief that the poor people always pay back their loans. On some occasions they may take longer time to pay back than it was originally stipulated, but repay they will. There is no reason for a credit institution dedicated to provide financial services to the poor to get uptight because a borrower could not pay back the entire amount of a loan on a date fixed at the beginning of the disbursement of the loan. Many things can go wrong for a poor person during the loan period. After all, the circumstances are beyond the control of the poor people. We see no reason why the sky should fall on anybody's head because a borrower took longer time to pay back her loan. Since she is paying additional interest for the extra time, where is the problem? We always advocated that microcredit programs should not fall into the logical trap of the conventional banking and start looking at their borrowers as some kind of "time-bombs" who are ticking away and waiting to create big trouble on pre-fixed dates. Please rest assured that the poor people are not going to create any trouble. It is us, the designers of institutions and rules, who keep creating trouble for them. One can benefit enormously by having trust in them, admiring their struggle for and commitment to have decent lives for themselves. It is very easy to appreciate the architecture of GGS if one keeps in mind this central assumption behind the system.

Thanks Mari Toyama at the Musashino YWCA in Mitaka for the suggestion.

2 comments:

fsosa said...

Hello to all the people who support Muhamad Yunus. You have an opportunity to learn more about his ideas and help at the same time. Ashoka: Inovators for the Public (www.ashoka.org), recently developed a group of films about Social Entrepreneurship, and Yunus is one of the speakers.

Ashoka - just launched an ambitious subtitling project with dotSUB (www.dotsub.com/nobel), a new site that lets you translate films line by line. The plan: volunteers translate one video on Muhammad Yunus and one on Ashoka founder Bill Drayton into 100 languages in time for the Nobel ceremony on December 10th. Go on, translate a few lines (www.dotsub.com/nobel) and learn more about what these Social Entrepreneurs have done. You will be giving people all around the world the opportunity to enjoy and learn from these videos...

Martin J Frid said...

Thanks, that sounds like a wonderful project. I had a look at the websites. Best wishes!