Nobel Prize Winner Muhammad Yunus' Economic Impact
Friday, October 13, 2006SUSIE GHARIB: The Nobel peace prize was awarded today to an economist from Bangladesh. Muhammed Yunus pioneered what's called micro-credit and founded the Grameen bank, which shares the prize. As Darren Gersh explains, Yunus proved that small amounts of money can make a big difference to the poor.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Nobel committee praised Muhammad Yunus for showing it is possible to create economic development from the bottom up. In an interview with NIGHTLY BUSINESS REPORT's Linda O'Bryon last year, Yunus explained he began Grameen bank after seeing how moneylenders abused the poor.
MUHAMMAD YUNUS, NOBEL LAUREATE: So I made a list of people who needed that kind of money and when the list was complete, there were 42 names on my list. The total money they needed was $27 and I was shocked. Here we are talking about economic development, about (INAUDIBLE) plans billions of dollars to invest in and so on and I see it's not billions of dollars people needed right away. They needed tiny little money.
GERSH: Over three decades that little money has added up to $5.7 billion in loans, parceled out in amounts as small as $50, there's no collateral and almost all of the borrowers are women.
ALEX COUNTS, CEO, GRAMEEN FOUNDATION: Women have proven to be the poverty fighters in the micro-finance context who have the longest term perspective, who take their profits and make the investments in children's education, health care and nutrition that help break the generational cycle of poverty.
GERSH: Some analysts are more cautious, pointing out a long-term study in Bangladesh found micro-lending only raised borrower incomes by 5 percent.
DAVID ROODMAN, RESEARCH FELLOW, CENTER FOR GLOBAL DEVELOPMENT: And that's better than a negative number. It shows that, on average, it's not hurting people. But it's not something that we would expect to transform people's lives.
GERSH: But Yunus believes his approach can be ramped up, and he's now laying plans to reach another five million families around the world.
YUNUS: The poor people are the Bonzai people. Society has not allowed them the real soil. If you allow them the real soil, real opportunities, they will grow as tall as everybody else. It's in the (INAUDIBLE)
GERSH: Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
