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Bangladeshi Economist Awarded Nobel Peace Prize for Micro-credit Lending Schemes

Muhammad Yunus of Bangladesh and the Grameen Bank were jointly awarded the 2006 Nobel Peace Prize for their pioneering work developing micro-credit lending schemes for the poor. An expert discusses microfinance schemes.

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  • JIM LEHRER:

    But first, the winner of the Nobel Peace Prize.

    In 2001, we profiled economist Muhammad Yunus and the pioneering bank he created in Bangladesh. NewsHour correspondent Fred de Sam Lazaro of Twin Cities Public Television has our encore report.

  • FRED DE SAM LAZARO, Correspondent, Twin Cities Public Television:

    Nurul Islam has an unusual routine for a bank loan officer. Once a week, he comes to this shack to meet with his small business clients and to collect their loan installments.

    Unusual doesn't start to describe the borrowers: Most are female, illiterate, and, before they joined this group, very poor, not exactly a lucrative group to most bankers, especially since their typical loan is about $100. But these are preferred customers of the Grameen Bank; 2.4 million of them have made Grameen one of the most prosperous financial institutions in the developing world.

  • MUHAMMAD YUNUS, Grameen Bank:

    I didn't have a blueprint of any kind. I was not looking for a destination. All I was trying to do was to be helpful for today.

  • FRED DE SAM LAZARO:

    Muhammad Yunus was a young economics professor in 1974, when the idea of offering banking services to poor people — an idea that came to be called micro-lending — occurred to him. It was in the midst of one of this country's legendary natural disasters.

  • MUHAMMAD YUNUS:

    We had a famine in 1974, people were dying of hunger. And I found myself in a very strange situation: teaching elegant theories of economics, telling all my students that every economic problem has beautiful solutions. And I walk out of the classroom. Those elegant theories have no use for people who were dying.

  • FRED DE SAM LAZARO:

    Yunus wanted to apply some of his economic theories to the real world he saw. So he surveyed 42 small business owners — fruit vendors, artisans, rickshaw pullers — and found that just $27 would free the whole group from debts to local money lenders, debt that kept them in almost lifelong bonded labor. Yunus decided to bankroll the group himself, after failing to sell local bankers on the idea.

  • MUHAMMAD YUNUS:

    I soon found out that people are paying back, and they paid back every penny without any hitch. So I got very excited. So I thought I should have my own bank. So I went to the government with a proposal that I should be allowed to set up a bank.