Microcredit economist wins Noble Peace Prize

BANGLADESHI economist Muhammad Yunus and his Grameen Bank won the Nobel Peace Prize yesterday for their pioneering use of tiny, seemingly insignificant loans — microcredit — to lift millions out of poverty.

Through Mr 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 mobile 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.”

Mr Yunus, 65, is the first Noble Prize winner from Bangladesh, a poverty-stricken nation of about 141 million people located on the Bay of Bengal.

“I am so so happy, it’s really great news for the whole nation,” Mr Yunus said shortly after the prize was announced.

Grameen Bank was the first lender to hand out microcredit, giving small loans to poor Bangladeshis who did not qualify for loans from conventional banks. No collateral is needed and repayment is based on an honour system.

Anyone can qualify for a loan — the average is about $200 (€160) — 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 says the method encourages social responsibility. The results are hard to argue with — the bank says it has a 99% repayment rate.