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Bangladeshi
Economist, Grameen Bank Win Nobel Peace Prize |
Posted:
10.16.06
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Bangladeshi economist Muhammad Yunus, who developed a system
of micro-credit loans for the poor, won the Nobel Peace Prize
last week.
Printer-friendly version: PDF
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In awarding the prize to Yunus and his Grameen Bank, the Norwegian
Nobel committee said that peace and poverty cannot coexist.
 "Lasting
peace cannot be achieved unless large population groups find ways
in which to break out of poverty. Micro-credit is one such means,"
Ole Danbolt Mjoes, director of the Nobel committee, said when
announcing the prize.
"Development from below serves to advance democracy and
human rights," he added.
The 66-year-old Yunus becomes the first Bangladeshi to win any
Nobel prize.
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The Grameen
Bank |
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Yunus founded the Grameen Bank, which means "Rural or Village
Bank" in the Bengali language, in 1976.
The idea came when he lent $27 to a small group of village women
because they could not get the money on their own.
 He
realized that small loans to the poorest people could make a big
difference in his rural south Asian nation Bangladesh.
"Their poverty was not a personal problem due to laziness
or lack of intelligence, but a structural one: lack of capital,"
Yunus said in 1996, The Washington Post reported.
Half of the 147 million people in Bangladesh live below the poverty
line.
The economy is primarily agricultural and more than one-third
of the population lives on less than $1 a day, according to the
World Bank.
Since its founding, the bank has made an estimated $5.7 billion
in loans to more than 6.6 million people, mostly poor people shut
out of traditional banks and loan systems.
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Micro-credit
loans |
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Without having to put up collateral -- something of value to
guarantee the payment of the loan -- groups of borrowers are given
small sums of money, averaging about $200.
 The
funds are used to buy such things as a cow, a few chickens or
a cell phone, to start new businesses.
Because borrowers are organized into small groups and given education
about topics ranging from money management to good nutrition,
the repayment rate is 98 percent.
The bank charges most borrowers interest, allowing it to make
enough to give no-interest loans to beggars for necessities such
as blankets or mosquito nets.
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One borrower |
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One business owner who got her start from the Grameen Bank is
Dilwara Begum, who used her money to buy a cow. Eventually with
a second loan she was able to expand her business into a poultry
barn that sells 7,000 eggs a week.
 Her
life has changed dramatically.
"In the past, we used to eat nothing more than rice and some
vegetables. Today in each meal there is egg, meat, or fish --
at least one of them. Also, in the past we used to grow enough
rice for about six months of the year; the rest we had to buy.
Sometimes we had to borrow money to buy the rice. Today we grow
enough rice for the whole year," Dilwara Begum told the NewsHour
in 2001.
The lives of her children changed, too.
Although Begum and her husband, NazimUddin, have only four years
of formal education between them, their son and daughter will
both go to college.
This is not unusual, according to Yunus. The bank encourages education.
He says that nearly 100 percent of the bank's families send their
children to college.
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The role
of women |
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Over 96 percent of Grameen's borrowers are women. Many are illiterate.
Yunus has said that dealing directly with women is critical to
making real change in rural society.
 "Women
are very cautious with the use of the money, but the men were
impatient; they wanted to enjoy it right away. They will entertain
friends, they will go to the movies, they will do whatever they
could to enjoy for themselves personally. But women didn't look
at it personally," he told the NewsHour.
"Women looked at it for the children, for the family and
so on, and for the future."
Some traditionalists in largely Muslim Bangladesh have criticized
the bank because it gives women more power in family relationships
by making them the primary money-makers and encourages contact
with men outside their immediate families.
Yunus said he will dedicate his share of the $1.4 million Nobel
Peace award to creating a company to make low-cost, high-nutrition
food and an eye hospital for the poor in Bangladesh.
--Compiled
by Annie Schleicher for NewsHour Extra
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