Microloans and the Nobel Prize...well earned!

From International Herald Tribune :

Giving credit where it's due
Muhammad Yunus
Published: December 8, 2006

DHAKA, Bangladesh: When I stepped out of my classroom at Chittagong University 30 years ago and into Jobra, the village next to my campus, I had only one goal in mind: to see if I could be of service to a few starving human beings.

Little did I know that those walks into Jobra village would lead me to walk across a stage in Oslo, Norway this Sunday afternoon to receive the Nobel Peace Prize. What I learned in that village changed my life and the lives of hundreds of millions of others around the world.

In 1976, I met Sufia Khatum, who made bamboo stools. This hardworking woman, who could neither read nor write, became my teacher. She didn't have the money to buy the bamboo for her stools and so she borrowed from a local moneylender on the condition that she sell the finished stools back to him at a price he set.

The moneylender's price barely covered the cost of the bamboo, leaving her with only a two- penny return on her work. This forced her to continue borrowing from the moneylender and placed her in a condition of slave labor. My students found 41 other people like Sufia who needed a grand total of $27 to free themselves from this debt trap.

She and the other 41 microentrepreneurs were the first borrowers of what would become Grameen Bank, the institution with which I share the Nobel Peace Prize.

They, and our nearly 7 million current borrowers, who are the owners of the bank, will be with me on that stage receiving the prize. Ninety-six percent of Grameen's clients are women, affecting a total of 35 million family members. We have lent nearly $6 billion over the last 30 years in loans that average $130 each.

The $27 I lent to 42 people 30 years ago was my first lesson in a new kind of banking. The first rules to be broken were the rules of banking. We made small loans to women without collateral, not large loans to men with great holdings. We required no paperwork of our illiterate borrowers, only that they learn to sign their names, and we did our banking in the villages.

Our work is built on the realization that our society has not only marginalized the poor, but also marginalized women. That is why our housing loans are in the name of the woman and require that the title to the land on which the house will be built is also in the name of the woman. We have made nearly 600,000 housing loans on these conditions.

One of our sister organizations, GrameenPhone, has 10 million cellphone subscribers in Bangladesh. There is no revolution in getting cellphones to better-off people in poor countries. Our revolution, however, is placing cellphones in the hands of 300,000 village phone ladies who use the phone as a profitable business.

The Nobel Peace Prize has established the link between poverty and peace, and underscored that poverty is a threat to peace. Microcredit plays a very important role in reducing poverty.
From humble beginnings 30 years ago with a loan of $27 to 42 people in Jobra, this work has now spread rapidly worldwide, empowered by the Microcredit Summit, a global campaign committed to ensuring 100 million microcredit families rise above the $1 a day threshold by the end of 2015, thus lifting half a billion people out of extreme poverty.

Poverty does not belong in a civilized society. It belongs in museums. We are committed to building a world in which our children and grandchildren will have to go to museums to see what poverty looked like.

Muhammad Yunus, founder of the Grameen Bank in Bangladesh, was awarded the Nobel Peace Prize for 2006.

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