Profile: 'World banker to the poor'
Muhammad Yunus is often referred to as "the world's banker to the poor". His life's work has been to prove that the poor are credit-worthy.

His revolutionary Grameen (Village) banking system is estimated to have extended credit to more than seven million of the world's poor, most of them in Bangladesh, one of the poorest nations in the world.

The vast majority of the beneficiaries are women.

Mr Yunus came up with the idea in 1976 while professor of economics at Chittagong University in southern Bangladesh.

The first loans he issued had a value of $27 (£14.50). Their recipients were 42 women from the village of Jobra, near the university.

The women had relied until then on local money-lenders who charged high interest rates. The conventional banking system had been reluctant to give credit to those who were too poor to provide any form of guarantee.

The success of Mr Yunus' scheme exceeded all expectations and has been copied in developing countries around the world.

His "micro-finance" initiative reaches out to people shunned by conventional banking systems - people so poor they have no collateral to guarantee a loan, should they be unable to repay it.

Mr Yunus' has tried to tranform the vicious circle of "low-income, low saving and low investment" into a virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income".

As a result, even beggars have been able to borrow money under his scheme.

Legacy of change

The BBC's Roland Buerk in Dhaka says that Mr Yunus lives a simple life. The Grameen Bank is now majority owned by the rural poor it serves, with a 10% stake held by the Bangladeshi government.

Our correspondent says that Mr Yunus has already created a legacy of real social change in Bangladesh.

His work has been widely recognised. In 1999 he was awarded the Indira Gandhi prize for peace, disarmament and development in India.

And it is not just in the developing world that he has had an impact.

Hillary Clinton, wife of former US President Bill Clinton, said in 2000 that Mr Yunus had helped the Clintons introduce micro-credit schemes to some of the poorest communities in Arkansas.

In 2002 a report in the Wall Street Journal said the bank was running into trouble because of increased competition and a fall in the bank's loan repayment rate.

Mr Yunus responded by telling the BBC that the bank was in its "strongest position ever".

"Micro-credit is something which is not going to disappear... because this is a need of the people," he said.

"Whatever name you give it, you have to have those financial facilities coming to them because it is totally unfair... to deny half the population of the world financial services."

Now Mr Yunus hopes that the Nobel peace prize will provide a huge boost to Grameen.

"It's recognition of our movement to ensure the rights of the poor," he told the BBC's Bengali service.

"With this recognition, we expect that the model we have developed will spread across the world."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/south_asia/6047234.stm

Published: 2006/10/13 14:13:53 GMT

© BBC MMVI

Q&A: So what is microfinancing?
The award of the Nobel Peace Prize to Bangladeshi economist Professor Muhammad Yunus has focused the attention of the world on the microcredit scheme he pioneered.

So what are microcredits?

They are very small loans, typically less than $100 (£54), made to the rural poor in developing countries who normally do not qualify for traditional banking credit.

This is often the only way they can establish a business and lift themselves out of poverty.

Professor Yunus founded his Grameen Bank in 1976 during a devastating famine in Bangladesh.

Today it has 6.6 million borrowers of whom 97% are women.

This focus on female borrowers in a society where women are frequently forced to take responsibility for their entire family is one of the characteristics that caught the Nobel Committee's attention.

Grameen, which means village, is an idea that has spread to more than 40 countries including Sri Lanka where women's banks were already a familiar concept.

How do microcredits work?

Grameen transactions take place at the village level, usually in a local hall or temple.

Typically a Grameen borrower will use a loan to buy tools and equipment to set up on their own.

As the microcredit idea has grown the Grameen organisation has extended into foundations dedicated to fisheries and irrigation.

By avoiding both employers and unscrupulous local money lenders the Grameen loan aims to break a circle of exploitation that frequently condemns rural villagers to lives of poverty.

The Nobel Committee cited how his Grameen Bank aids the poor "to bring about their own development".

And the concept of extending loans to a largely female client base has also been credited with reducing domestic violence by giving women a previously unattainable degree of independence.

So it's worry free money then?

Not quite. Critics argue that the Grameen idea is in danger of being oversold.

And because the loans are often repaid by villagers banding together in loan clubs, this has led to accusations that some of the poor can come under peer pressure to repay the money they owe when times are tough.

Grameen Bank has also survived accusations that it lacked adequate funds, though Professor Yunus was adamant that his bank could repay all of the money it raised from the commercial sector.

Despite some concerns, Professor Yunus and his ideas have attracted a growing band of advocates, including the former US President Bill Clinton and his wife Hillary.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6047364.stm

Published: 2006/10/13 13:32:43 GMT

© BBC MMVI

Text: Nobel Peace Prize citation
Here is the official English text of the Norwegian Nobel Committee's citation in awarding the 2006 Peace Prize to Muhammad Yunus and his Grameen Bank.

The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below.

Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.

Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries.

Loans to poor people without any financial security had appeared to be an impossible idea.

From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty.

'Liberating force'

Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.

Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.

Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions.

Economic growth and political democracy can not achieve their full potential unless the female half of humanity participates on an equal footing with the male.

Yunus' long-term vision is to eliminate poverty in the world. That vision cannot be realised by means of micro-credit alone.

But Muhammad Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major part.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/6047286.stm

Published: 2006/10/13 09:48:11 GMT

© BBC MMVI

Bankers for poor win peace Nobel
October 13, 2006, CNN News/Associated Press
http://www.cnn.com/2006/WORLD/europe/10/13/nobel.peace.ap

Bangladeshi microcredit pioneer Muhammad Yunus and his Grameen Bank were awarded the Nobel Peace Prize on Friday for their work in advancing economic and social opportunities for the poor, particularly women. The economist and the bank he founded will share the prize. They were cited for their efforts to help "create economic and social development from below" in their home country by using innovative economic programs such as microcredit lending. Grameen Bank has been instrumental in helping millions of poor Bangladeshis, many of them women, improve their standard of living by letting them borrow small sums to start businesses. Loans go toward buying items such as cows to start a dairy, chickens for an egg business, or mobile phones to start businesses where villagers who have no access to phones pay a small fee to make calls. "Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development," the Nobel Committee said in its citation. Microcredit is the extension of small loans, typically US$50 to US$100, to entrepreneurs too poor to qualify for traditional bank loans. 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.

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