Small loans to poor can change the world
Washington, November 22:
Declaring credit a human right, Nobel laureate Muh-ammad Yunus said yesterday that the successful micro-len-ding bank he laun-ched in his native Bangladesh show-ed wiping out wo-rld poverty was a goal within reach.
Yunus said Grameen Bank’s miniscule loans to the destitute have allowed people to launch their own small businesses and lift themselves out of poverty without any massive infusion of outside aid. “Poverty is an artificial creation of a system. Poverty is not in the person,” Yunus said in a speech in Washington.
The economics professor was awarded the Nobel Peace Prize last month jointly with Grameen Ban-k, which began with a loan of $27 and now lends nearly a billion dollars a year to the poorest of the poor.
“Fifty-eight per cent of Grameen borrowers have moved out of poverty, and every year, every month more and more people are getting out of poverty,” Yunus told an audience at the National Press Club. “If people can do business and get out of poverty, what happy news for the whole world. We can create a world completely free of poverty.” He said conventional financial institutions and services were closed to most of the world’s population, depriving people of a means to help themselves.
“Credit should be accepted as a human right,” Yunus said. “Human beings are very creative beings. All kinds of creativity and ingenuity is built into the person,” he said. And micro-credits were about ‘unleashing that creativity.’ Yunus set out to help the poor after famine struck Bangladesh in the 1970s, shaking his assumptions about economics.
“I started to dread my own lectures,” Yunus wrote in his autobiography, ‘Banker to the Poor’. “What good were all my complex theories when people were dying of starvation on the sidewalks and porches across from my lecture hall?” After learning that 42 people in the nearby village of Jobra were locked in deep poverty for want of $27, Yunus eventually established a bank that lent small sums of money at modest interest rates without demanding collateral in return.
Now the bank has close to seven million borrowers and has expanded its services, including education and pension funds as well as loans, to street beggars.
Yunus said the bank’s wide reach has helped reduce poverty in Bangladesh and that by 2015, the country would likely meet a UN goal of cutting poverty in half.