Nobel for anti-poverty pioneers

[Neo]

Nobel for anti-poverty pioneers

Mr Yunus was honoured for his pioneering work against poverty
Muhammad Yunus of Bangladesh and the Grameen Bank have been jointly awarded the 2006 Nobel Peace Prize.
Mr Yunus, an economist, founded the bank, which is one of the pioneers of micro-credit lending schemes for the poor, especially women, in Bangladesh.

Mr Yunus, 66, said he would use the 10m Swedish kronor ($1.35m, £730,000) prize money to "find more innovative ways" to help the poor launch businesses.

He said he was delighted at the news and proud of the bank's achievement.

"I'm very very happy. It's a great honour for us and for Bangladesh. It's a recognition of our work," he told the BBC Bengali service.

"As a Bangladeshi, I'm proud that we have given something to the world. Our work has now been recognised by the whole world. "

Surprise choice

The winners were revealed by the Nobel committee chairman, Ole Danbolt Mjoes, in Oslo.

MUHAMMAD YUNUS
Bangladeshi economist
Founded concept of micro-credit
Started Grameen Bank in 1976

Mr Mjoes said Mr Yunus had shown himself to be a leader who had managed to translate visions into practical action for the benefit of millions of people.

He and the bank were being honoured "for their efforts to create economic and social development from below", Mr Mjoes said.

He said the bank's work in creating opportunities for large numbers of people to get out of poverty created the conditions for sustainable peace.

"Development such as this is useful in human rights and democracy," said Mr Mjoes.

The BBC's Lars Bevanger in Oslo says this year's winner caught most there by surprise.

Many commentators had expected an award to someone involved in peace talks, our correspondent says.

He says in awarding this prize to an economist, the Nobel Committee has again shown itself willing to widen the scope of the prestigious prize.

Mr Yunus set up the bank in 1976 with just $27 from his own pocket. Thirty years on, the bank has 6.6 million borrowers, of which 97% are women, according to the Grameen website.

Mr Yunus is expected to pick up the award and prize money during a ceremony in Oslo in December.

http://news.bbc.co.uk/2/hi/europe/6047020.stm

 

[Neo]

Profile: 'World banker to the poor'

Muhammad Yunus is often referred to as "the world's banker to the poor". His life's work has been to prove that the poor are credit-worthy.
His revolutionary Grameen (Village) banking system is estimated to have extended credit to more than seven million of the world's poor, most of them in Bangladesh, one of the poorest nations in the world.

The vast majority of the beneficiaries are women.

Mr Yunus came up with the idea in 1976 while professor of economics at Chittagong University in southern Bangladesh.

The first loans he issued had a value of $27 (£14.50). Their recipients were 42 women from the village of Jobra, near the university.

The women had relied until then on local money-lenders who charged high interest rates. The conventional banking system had been reluctant to give credit to those who were too poor to provide any form of guarantee.

The success of Mr Yunus' scheme exceeded all expectations and has been copied in developing countries around the world.

His "micro-finance" initiative reaches out to people shunned by conventional banking systems - people so poor they have no collateral to guarantee a loan, should they be unable to repay it.

Mr Yunus' has tried to tranform the vicious circle of "low-income, low saving and low investment" into a virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income".

As a result, even beggars have been able to borrow money under his scheme.

Legacy of change

The BBC's Roland Buerk in Dhaka says that Mr Yunus lives a simple life. The Grameen Bank is now majority owned by the rural poor it serves, with a 10% stake held by the Bangladeshi government.

Even beggars can get Grameen loans

Our correspondent says that Mr Yunus has already created a legacy of real social change in Bangladesh.

His work has been widely recognised. In 1999 he was awarded the Indira Gandhi prize for peace, disarmament and development in India.

And it is not just in the developing world that he has had an impact.

Hillary Clinton, wife of former US President Bill Clinton, said in 2000 that Mr Yunus had helped the Clintons introduce micro-credit schemes to some of the poorest communities in Arkansas.

In 2002 a report in the Wall Street Journal said the bank was running into trouble because of increased competition and a fall in the bank's loan repayment rate.

Mr Yunus responded by telling the BBC that the bank was in its "strongest position ever".

"Micro-credit is something which is not going to disappear... because this is a need of the people," he said.

"Whatever name you give it, you have to have those financial facilities coming to them because it is totally unfair... to deny half the population of the world financial services."

Now Mr Yunus hopes that the Nobel peace prize will provide a huge boost to Grameen.

"It's recognition of our movement to ensure the rights of the poor," he told the BBC's Bengali service.

"With this recognition, we expect that the model we have developed will spread across the world."

http://news.bbc.co.uk/2/hi/south_asia/6047234.stm

 

[Neo]

He's a great guy, a true rolemodel for businessmen who's lifted million out of poverty.
This way of banking should be introduced throughout the Sub Continent!

 

[EagleEyes]

Neo,

What is this all about? Shed some light on this. What system? What does it do? and how it runs?

How much effective is this system? Do you think it will really work in Pakistan where there are bunch of people who take the money from the bank and never pay back? There is almost nothing that then a bank can do. Those who run away usually have strong ties with the strong people mostly in the government, so its hard to get back on them. Now days Banks in Pakistan only give money to those who actually are able to pay them back, they look at the salary. I doubt they would give loan to someone who earns 3-4 thousand rupees per month.

 

[Neo]

What I've learnt from his intervews is that his inital loons are as small is $27, thats how he started with very little interest. There's no direct money handout without a feasible plan to prove how the money is to be spent and what returns it might give.
Once the investment is approved the loan is given on very easi terms.

For example a widowed woman with four children and a small piece of land came to him to beg for help. The bank advised her to grow shrimps on that wet piece of land which was too small to grow rice. She was also advised to buy two buffelo's with a loan.
Milk and shrimps retail would enable her to pay back the investment within three years while she had to work in the fields to earn her daily expenses.

She can't get rich but would certainly pull herself and her children out of poverty.

Far 80% of the clients are women who start small business like weaving, making cloths or even supplying lunchboxes to business community.

 

[Neo]

So basically without a plan there's no loan.
People can even have a joint loan like two or three households haveing one account and start a small business.

 

[Neo]

Allow me some time to study the concept and I'll come with the details.
If it works for Bangladesh, it should work for India and Paksitan.

 

[EagleEyes]

Allow me some time to study the concept and I'll come with the details.
If it works for Bangladesh, it should work for India and Paksitan.

I see. It seems to be a great idea, but what if poor people aren't able to payback or donot choose to pay back at all? There is a high risk!

But if there is trust, and people do what they should do, then it is perfect!

 

[zpak]

Congratulations to him. Its good to know that even in the midst of hard poverty there are those who are willing to help.

 

[sigatoka]

1. I see. It seems to be a great idea, but what if poor people aren't able to payback or donot choose to pay back at all? There is a high risk!

But if there is trust, and people do what they should do, then it is perfect!

1. I think they usually give the loan to a group of people. For e.g. from a village ten women might get the loan and all of them are responisble for the loan collectively. So if one doesnt want to pay then the other women can put pressure on her and also from the banks point of view this reduces the risk of individual loans and also reduces transaction cost because they give fewer loans and also they dont need to research as much on credit worthiness.

The problem with traditional bank lending is that they arent present in the poorest villages were they are needed and even if they were, they would not be willing to lend the very small amounts that these poor people needed.

The only revolution in this system is that it for the first time focused on lending very small amounts to the poorest. It can only succeed if ways are found of reducing transaction cost of lending small amounts And of checking credit worthiness (or reducing credit risk) in a cost effective manner.

 

[Thunder]

Well quite frankly, i belve that this plan would be more efficitve in the people don't have to give interset. They live in poverty already, we don't want them to worry about giving back interset, that money would be usefull to the poor.

But other then that, it's a very good plan, espically how they first give the idea and then the money to make that idea a reality, those people might not become millionaires, but they can certianly send their kids to school, who in turn might become millionaires

 

[araz]

Well quite frankly, i belve that this plan would be more efficitve in the people don't have to give interset. They live in poverty already, we don't want them to worry about giving back interset, that money would be usefull to the poor.

But other then that, it's a very good plan, espically how they first give the idea and then the money to make that idea a reality, those people might not become millionaires, but they can certianly send their kids to school, who in turn might become millionaires

My Brother AsSalam o Alaikum.
Brother even a small bank has administrative and other expenses. Plus if it needs to grow it needs to have some income from its venture. Even in Islam, you can have a contract whereby you may borrow X amount but have to return X+Y amount. This is the basis of all Islamic Banking. What this great man has done is to lend to the poor and given them advice on what to do with the money which would be suitable for her/him to get back on to her feet/his feet. It was mostly availed by women, who traditionally are burdoned with earning money as well as looking after family. It has been aremarkably successful venture. The man difference between it and ADBP and the various Co op Banks is the lack of Government influence, which allows one honest man to pass the benefits of his knowledge and expertise to so many people. May Allah give him reward in this world and the Here after. Ameen.
WaSalam
Araz

 

[Neo]

Yunus unveils vision for ending poverty

OSLO, Dec 10: Micro-credit pioneer Muhammad Yunus of Bangladesh, founder of Grameen Bank, unveiled a bold vision for ending global poverty as he was awarded the Nobel Peace Prize on Sunday.

“Poverty is a threat to peace,” the economist-turned-humanitarian banker said in accepting the 1.1 million euro ($1.4 million) prize. “The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society in the world.”

The Grameen Bank, which shared the award, has helped millions in Bangladesh extricate themselves from poverty through tiny, collateral-free loans, and has been successfully emulated throughout the world over the last decade.

In his prepared speech, Yunus outlined the contours of a parallel economy based on self-sustaining “social businesses” -- such as Grameen and several joint ventures he has created with multinational corporations -- that reinvest profits rather than paying dividends.

“By defining ‘entrepreneur’ in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market,” Yunus said.

Once recognized in law, Yunus predicted, these social businesses will eventually develop their own capital markets to attract investment.

Calling the 66-year-old Bangladeshi a “modern Ghandi”, the Norwegian Nobel Committee saluted his efforts “to create economic and social development from below.”

“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means,” said Committee Chairman Ole Danbolt Mjos, adding that such initiatives “advance democracy and human rights.”

Yunus also used the Nobel platform on Sunday to criticise purely military strategies for combating terrorism.

http://www.dawn.com/2006/12/11/top13.htm