Micro-loan pioneer and Bank win Nobel Peace Prize

[ISiddiqui]

http://www.nytimes.com/aponline/worl...rtner=homepage

October 13, 2006

Microloan Pioneer and His Bank Win Nobel Peace Prize

By THE ASSOCIATED PRESS
Filed at 7:58 a.m. ET
OSLO, Norway (AP) -- Bangladeshi economist Muhammad Yunus and his Grameen Bank won the Nobel Peace Prize on Friday for their pioneering use of tiny, seemingly insignificant loans -- microcredit -- to lift millions out of poverty.
Through Yunus's efforts and those of the bank he founded, poor people around the world, especially women, have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead.
''Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,'' the Nobel Committee said in its citation. ''Microcredit is one such means. Development from below also serves to advance democracy and human rights.''
Yunus, 65, is the first Noble Prize winner from Bangladesh, a poverty-stricken nation of about 141 million people located on the Bay on Bengal.
''I am so so happy, it's really a great news for the whole nation,'' Yunus told The Associated Press shortly after the prize was announced. He was reached by telephone at his home in the Bangladeshi capital Dhaka.
Grameen Bank was the first lender to hand out microcredit, giving very small loans to poor Bangladeshis who did not qualify for loans from conventional banks. No collateral is needed and repayment is based on an honor system.
Anyone can qualify for a loan -- the average is about $200 -- but recipients are put in groups of five and once two members of the group have borrowed money, the other three must wait for the funds to be repaid before they get a loan.
Grameen, which means rural in the Bengali language, says the method encourages social responsibility. The results are hard to argue with -- the bank says it has a 99 percent repayment rate.
Since Yunus gave out his first loans in 1974, microcredit schemes have spread throughout the developing world and are now considered a key approach to alleviating poverty and spurring development.
Yunus's told The Associated Press in a 2004 interview that his ''eureka moment'' came while chatting to a shy woman weaving bamboo stools with calloused fingers.
Sufia Begum was a 21-year-old villager and a mother of three when the economics professor met her in 1974 and asked her how much she earned. She replied that she borrowed about 5 taka (nine cents) from a middleman for the bamboo for each stool.
All but two cents of that went back to the lender.
''I thought to myself, my God, for five takas she has become a slave,'' Yunus said in the interview.
''I couldn't understand how she could be so poor when she was making such beautiful things,'' he said.
The following day, he and his students did a survey in the woman's village, Jobra, and discovered that 43 of the villagers owed a total of 856 taka (about $27).
''I couldn't take it anymore. I put the $27 out there and told them they could liberate themselves,'' he said, and pay him back whenever they could. The idea was to buy their own materials and cut out the middleman.
They all paid him back, day by day, over a year, and his spur-of-the-moment generosity grew into a full-fledged business concept that came to fruition with the founding of Grameen Bank in 1983.
In the years since, the bank says it has lent $5.72 billion to more than six million Bangladeshis.
Worldwide, microcredit financing is estimated to have helped some 17 million people.
''Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development,'' the Nobel citation said.
Today the bank claims to have 6.6 million borrowers, 97 percent of whom are women, and provides services in more than 70,000 villages in Bangladesh. Its model of micro-financing has inspired similar efforts around the world.
The success has allowed Grameen Bank to expand its credit to include housing loans, financing for irrigation and fisheries as well as traditional savings accounts.
One of Yunus' aides, Dipal Barua, said the award was an ''honor for millions of poor women who have made this possible.''
Yunus and the bank will share in the $1.4 million prize as well as a gold medal and diploma.
The peace prize was the sixth and last Nobel prize announced this year. The others, for physics, chemistry, medicine, literature and economics, were announced in Stockholm, Sweden.
------
Associated Press writers Julhas Alam and Matt Moore contributed to this report.

I guess it was a weak year for 'peace'. The guy is doing great work, but does it really make the world a more peaceful place? Then again, I'm not sure who else deserves it.

[QuikSand]

I could easily be persuaded that a society where people feel that they have opportunity would make a great difference in advancing peace in many parts of the world. If this effort furthers that sense, and it certainly sounds like it does or could, I have no problem with the award.

I see your point... but in times when some of the biggest concerns about global unrest are not about traditional organized government-on-government fighting but about factions, causes, and militants... this might actually be a well-timed message.

[JPhillips]

I don't know whether he deserves the Nobel Peace Prize, but Yunus has made an incredible contribution to the third world. I saw an interview with him a couple of years ago and I was amazed at how a relatively small amount of money could be used to make such a difference in people's lives. I don't think its an exaggeration to say that Yunus is one of the most important people in the past century.

[ISiddiqui]

I know the argument that people who have some more economic means may be less violent, but I think that's a far too optimistic view. Economic power is simply going to lead to people wondering about why they don't have social power and the violence will continue. And it isn't like microloans will make these people into a expanding middle class... it'll make them less poor, surely, but they'll still be part of the lower classes (though far better off than before).

Its a great thing he's doing, but I don't think he intended it to extend peace and I don't think it really is doing so. But perhaps it could be a 'message' prize (ie, give people you are oppressing an oppertunity and peace will flourish).

[JPhillips]

To be fair, there aren't a whole lot of good candidates this year. It hasn't been a good year for peace.

[Toddzilla]

It's always easy to give the prize to some figurehead leader who has some token participation in a peace treaty or peace talks. It takes a real leader, and real effort, to put social justice to work, and this guy deserves the prize as much or more than any of the other recent winners. Weak year my ass, this guy is a real hero.

[Crapshoot]

Originally Posted by QuikSand

I could easily be persuaded that a society where people feel that they have opportunity would make a great difference in advancing peace in many parts of the world. If this effort furthers that sense, and it certainly sounds like it does or could, I have no problem with the award.

I see your point... but in times when some of the biggest concerns about global unrest are not about traditional organized government-on-government fighting but about factions, causes, and militants... this might actually be a well-timed message.

"". Is Yassar Arafat and Rabin can win the award, Grameen and its efforts at allowing people some hope is certainly deserving.

[Buccaneer]

Better for someone winning Peace that is making a real difference in people's lives than some false political peace that would be rendered moot in the near future.

[Buccaneer]

But I also believe that those taking a stand for peace in a hardship country (against tribal dictators, against opressive regimes, etc.) should win Peace as well. Burma comes to mind (if I remembered the correct country).

[ISiddiqui]

Originally Posted by Buccaneer

But I also believe that those taking a stand for peace in a hardship country (against tribal dictators, against opressive regimes, etc.) should win Peace as well. Burma comes to mind (if I remembered the correct country).

That would be my opinion. Don't get me wrong, I think that Yunis is doing some great stuff here and should be recognized. But this is a Nobel Peace Prize, not a do gooder prize.

Peace prizes have been issued posthumoursly before (Dag Hammarskjold), so I think Pope John Paul II would have been a pretty good choice.

[Marc Vaughan]

I think its a worthy winner imho.

Most violence involves people who see no other option than violence for obtaining whatever end they want.

This 'end' is often at least partially economic in nature and aimed at obtaining goods or power, thus by enabling people to have more control over their lives and the chance to improve their situation through honest hardwork he has cut-down on the chance of people choosing a violent solution to their situation.

(at least thats my take)

[SportsDino]

Peace is not found written in the words of a piece of paper signed by two politicians, it is in going to sleep at night without dread of tommorrow.

Peace of mind creates peace among people, for less money than we spend on any number of insignificant things you can create a valuable resource for someone in poverty that will allow themselves to push their way out on their own. This is not a handout, this is a BUSINESS force, it doesn't depend on the generosity of people, there are economics behind this that shows it is a viable, profitable activity. More banks should try to understand what is going on here, indeed, I would rather all the aid money we give to nations with corrupt leaders have gone to programs like this which allow large numbers of individuals to pull themselves out of the hole.

Think of what something like this could do in the United States, for instance, instead of extending billions in credit to large hedge funds for wealthy billionaires that need multi-billion dollar bail outs from the federal government when they screw up the economy... come up with some social/economic mechanism like this which will yield high repayment, low interest options to lower and middle class people (and hell those in the huge bottom portion of the 'upper class' that don't have billions but a good business possibility). We would probably see a lot more real economic growth, instead of just watching the Dow fluctuate which really only concerns wealthy speculators in terms of the bottom line.

We are in an age of stock option scoundrels at the high-end of the business community, it would be nice to provide more entry for the bottom to give that established aristocracy some competition.

[ISiddiqui]

Originally Posted by Marc Vaughan

I think its a worthy winner imho.

Most violence involves people who see no other option than violence for obtaining whatever end they want.

This 'end' is often at least partially economic in nature and aimed at obtaining goods or power, thus by enabling people to have more control over their lives and the chance to improve their situation through honest hardwork he has cut-down on the chance of people choosing a violent solution to their situation.

(at least thats my take)

But I don't see many Bangladeshis (or at least not the people who are getting these loans) as doing much violence .

I'd rather see the prize go to those that directly impact peace (which would also fit with the description of the award in Nobel's will), or else we may soon see Mosanto win a Nobel Peace Prize for GM food having the ability to decrease world hunger with its great yields .

[Desnudo]

"poor people around the world, especially women, have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead."

What a range of examples.

[Galaxy]

Originally Posted by Desnudo

"poor people around the world, especially women, have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead."

What a range of examples.

I can understand the first two, but cell phones?

[Galaxy]

Do you think Bill Gates and his wife will win it then sometime in his life?

[Klinglerware]

Originally Posted by Galaxy

I can understand the first two, but cell phones?

In developing countries, land-line infrastructure tends to be terribly incomplete, especially in rural areas. Cell-phones in many of these countries are seen as a way to "bridge the gap" in terms of bringing telephone service to underserved rural areas.

[Masked]

Originally Posted by Galaxy

I can understand the first two, but cell phones?

Cell phones play a very different role in the developing world than they do in the U.S. where they are more of a luxury than a necessity. Countries, such as Bangladesh, lack landlines so most people do not have any phone service. When starting from scratch, a cell system is much cheaper to build. Therefore, cell phones in the developing world are a basic necessity for building a business.

[stevew]

Wow, this actually does sound like a great winner.

[Galaxy]

Thanks for the explanation about the cell phones.

[JonInMiddleGA]

Originally Posted by ISiddiqui

But I don't see many Bangladeshis (or at least not the people who are getting these loans) as doing much violence .

Well, that pretty much sums up the first thing that crossed my mind when reading the article.

Like you, I'm just not really seeing the peace angle of this being significant enough to warrant the award.

[NevStar]

Originally Posted by SportsDino

Think of what something like this could do in the United States, for instance, instead of extending billions in credit to large hedge funds for wealthy billionaires that need multi-billion dollar bail outs from the federal government when they screw up the economy... come up with some social/economic mechanism like this which will yield high repayment, low interest options to lower and middle class people (and hell those in the huge bottom portion of the 'upper class' that don't have billions but a good business possibility). We would probably see a lot more real economic growth, instead of just watching the Dow fluctuate which really only concerns wealthy speculators in terms of the bottom line.

www.prosper.com

[bulletsponge]

better than the winner of last year or a year before. the lady that went around planting trees in Africa