Week of 12.8.06
Nobel Cause: Vinod Khosla on Microcredit
How can a $20 loan completely change the life of a farmer in India? In this web-exclusive video, billionaire venture capitalist Vinod Khosla tells David Brancaccio how making tiny loans, a process called micro-lending or micro-credit, can make a tremendous difference to the lives of people in developing countries.
Video: Nobel Cause
"It may be to buy a buffalo for milk. It may be to buy a little rickshaw to be able to transport stuff," Khosla tells NOW. Such loans are freeing people from abusive, local moneylenders. "They were virtually slaves without being called slaves," Khosla says, adding that these loans are more likely to be repaid than modern American credit card debts.
More About Micro-lending
Micro-lending is the act of loaning small amounts of money, usually less than $200, to people, mostly women, who use the capital to turn their lives around. The Nobel Peace Prize for 2006 was divided between Muhammad Yunus and the Grameen Bank for their efforts to create and inspire economic and social development with these loans.
When awarding the prize to Yunus and the Grameen Bank, the Nobel Committee said: "Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea."
"From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world."
» NOW: Climate Change and this week's Media Senate Hearings
» More on the 2006 Peace Prize from Nobelprize.org
Microfinance Success Stories:
» Dieula Calixte, The Dominican Republic
» Marie-Claire Ayurwanda, Rwanda
» Yuli, Indonesia