Rashed's View

The 2006 Nobel Peace Prize has been awarded jointly to The Grameen Bank and to its founder, Prof. Muhammad Yunus. It was awarded “for their efforts to create economic and social development from below. Lasting peace can not 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.” 

Prof. Yunus created the concept of micro-credit, and made it a reality by initially lending money from his own pocket in his village ($27), to then founding the Grameen Bank. Grameen now gives over a billion dollars in micro-loans to help more than 5 million poor. He has appropriately been called Banker to the Poor, which is also the title of his book. I read the book in 2001, when it first came out and was very impressed with the concepts.

Prof. Yunus concept of micro-credit was revolutionary. Small loans are given to the very poor to start some kind of business, for example buying a cow to be able to sell milk. Once they are selling milk, they can pay back the load – to be able to get bigger loans in the future – and they can feed the family, and improve their living conditions in general. One stroke of genius in the implementation of Prof. Yunus’ micro-finance was setting up groups of 4-5 people to give the loans to. One person gets the loan, once they successfully start to pay back the loan, the next person will get it. This creates both peer pressure to get the loan repaid, and also gives an incentive to the others to help the first person out in case they are having trouble. In this way, Prof. Yunus has created a banking system where the default on loans is one of the lowest of any bank in the world. This is amazing.

Beyond micro-credit, he has created processes for helping the loan takers with knowledge of how to run the business, and even how to live a better life (education, nutrition, etc.). He has also started initiatives to empower the poor in Bangladesh through technology and communication. In the 1990’s, Prof. Yunus took his ideas to a higher level – to fight world poverty. He has set his goal to end world poverty. This is a pretty lofty goal. And, for once, it seems achievable – the way he has laid it out. He has been one of the primary drivers for this initiative, getting most of the world leaders together to set these goals at the United Nations. I find this incredibly inspiring.

The Grameen Bank is one of less than 20 organizations to win the Nobel Prize, some multiple times. to Prof. Yunus is the first Bangladeshi to win a Nobel Prize. Another Bangaldeshi whom I admire for the work he has done is Fazle Hasan Abed, the founder of BRAC, one of the largest non-government development organizations in the world. I met him when I was very young, in 1986 when he visited my parents at our house. Unfortunately my interests in development did not form until years later. BRAC recently won the Gates Award for Global Health, with this citation from Bill Gates:

BRAC has done what few others have – they have achieved success on a massive scale, bringing life-saving health programs to millions of the world’s poorest people. They remind us that even the most intractable health problems are solvable, and inspire us to match their success throughout the developing world.