Nobel Peace Prize for Micro Credit Pioneer

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Nobel Peace Prize for Micro Credit Pioneer

Saturday, October 14, 2006

Muhammad Yunus of Bangladesh and the Grameen Bank have been jointly awarded the 2006 Nobel Peace Prize. Mr Yunus, an economist, founded the bank, which is one of the pioneers of micro-credit lending schemes for the poor, especially women, in Bangladesh.

Grameen Foundation USA

Mr Yunus, 66, said he would use the 10m Swedish kronor ($1.35m, £730,000) prize money to "find more innovative ways" to help the poor launch businesses.

He said he was delighted at the news and proud of the bank's achievement. "I'm very very happy. It's a great honour for us and for Bangladesh. It's a recognition of our work," he told the BBC Bengali service. "As a Bangladeshi, I'm proud that we have given something to the world. Our work has now been recognized by the whole world. "

Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder."

As of May, 2006, it has 6.61 million borrowers, 97 percent of whom are women. With 2226 branches, GB provides services in 71,371 villages, covering more than 100 percent of the total villages in Bangladesh.

Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).

Surprise choice

The winners were revealed by the Nobel committee chairman, Ole Danbolt Mjoes, in Oslo.

MUHAMMAD YUNUS
Bangladeshi economist
Founded concept of micro-credit
Started Grameen Bank in 1976

Mr Mjoes said Mr Yunus had shown himself to be a leader who had managed to translate visions into practical action for the benefit of millions of people.

He and the bank were being honored "for their efforts to create economic and social development from below", Mr Mjoes said.

He said the bank's work in creating opportunities for large numbers of people to get out of poverty created the conditions for sustainable peace.

"Development such as this is useful in human rights and democracy," said Mr Mjoes.

Many commentators had expected an award to someone involved in peace talks, our correspondent says.

He says in awarding this prize to an economist, the Nobel Committee has again shown itself willing to widen the scope of the prestigious prize.

Mr Yunus set up the bank in 1976 with just $27 from his own pocket. Thirty years on, the bank has 6.6 million borrowers, of which 97% are women, according to the Grameen website.

Mr Yunus is expected to pick up the award and prize money during a ceremony in Oslo in December.
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