PROFESSOR Muhammad Yunus spoke for the disadvantaged of the world everywhere when he, reacting to the news that he had won the Nobel Peace Prize, said that it was “fantastic news for all of us, for Grameen Bank, Bangladesh, and all the poor countries and all the poor people all around the world.” The Norwegian Nobel Committee too distinguished itself when it chose to honor a man who had no big names lobbying for him and whose name was not among the short-listed. Unlike many of the recent winners of the peace prize, his work had nothing to do with wars or conflicts. He got the prize for working quietly with the poorest of the world, creating no headlines.
Yunus’ Grameen (from the Bengali “Gram”, meaning “village”) philosophy has always been startling and in the early days many in Bangladesh dismissed him as mad. His view is that the poor do not create poverty; the institutions and policies that surround them create it. Yunus speculated that in order to eliminate that poverty it was necessary to change the institutions and policies or create new ones. The Grameen microcredit movement was the new vehicle he established. From Bangladesh the movement has spread to poor and emerging economies throughout the world.
One of the more unusual features of Grameen in Bangladesh is that the bank’s 19,000 staff visit its 6.6 million borrowers on their doorsteps in over 71,000 villages every week to provide loans averaging $130 and to collect tiny repayments. Though interest is charged, it is never allowed to exceed the original sum borrowed. Borrowers, over 90 percent women, are encouraged to form collectives. This reinforces the principle of trust, because if a loan is not repaid there is no legal action to recover the debt. Most important, these aren’t consumer loans; they’re collateral-free loans for micro-businesses, which are typically shut out from conventional commercial bank loans, especially where they are most needed.
In 2003, Yunus extended the Grameen scheme to the absolute bottom of the social entrepreneurial ladder: Bangladesh’s tens of thousands of beggars. These folks are lent on average $9 to buy small items that they can sell on the streets. So far 50,000 beggars have become Grameen customers. The value of the nugatory sums Grameen disperses is incalculable, offering resources to people who would never have dreamed that they were eligible for proper credit and whose only recourse was the type of predatory usury practices that target the poor the world over, be they from organized criminal loan sharks in Bangladesh or paycheck-cashing loan sharks in US inner-cities.
What Yunus and his extraordinary Grameen movement have done is allow society’s least fit the means to do more than to barely survive. He has given the most economically disadvantaged a taste of the benefits of capitalism, and a chance to relish the pride and confidence that a savagely indifferent, savage-capitalist society normally denies them.
This latest Nobel Peace prize honors both a great idea and a great man.
