When we heard about the
announcement of the joint
winners – Muhammad
Yunus & Grameen Bank –
of the 2006 Nobel Peace
Prize, we couldn’t help but
feel excited for them: 30
years of accomplishments
and progress on behalf of
some of the world’s poorest
of the poor recognized at
one of the highest levels
possible in society today.
We are also proud that
Professor Yunus was our
closing speaker at the IE
AA’s 2004 Annual
Conference.
It is unlikely that many people
have missed the naming of the
unexpected 2006 Nobel Peace
Prize winner(s). Why unexpected?
First off, Professor Yunus is
a Ph.D. in Economics, originally
specializing in econometrics.
Second, Grameen Bank is a
bank; it is unusual in its non-traditional
banking practices and in its
workforce – its own borrowers.
Today, Grameen Bank gives
loans to nearly 7.0 million poor
people, 97 per cent of whom are
women, in 73,000 villages in
Bangladesh. Over 98% of the
loans are paid back, a recovery
rate higher than any other banking
system. Muhammad Yunus
says, "Lend the poor money in
amounts which suit them, teach
them a few sound financial principles,
and they manage on their
own".
Yunus’ Biography
Professor Muhammad Yunus is
a revolutionary. His ideas couple
capitalism with social responsibility
and have changed the face
of rural economic and social
development forever. He is responsible
for many innovative programmes
benefiting the rural
poor.
A Fulbright Scholar at Vanderbilt
University, he received his Ph.D.
in Economics in 1969. Later that
year, he became an assistant
professor of Economics at Middle
Tennessee State University, before
returning to Bangladesh. He
joined the Chittagong University
Economics Department, of which
he became head in 1972. Since,
1974 he is the founder and managing
director of the Grameen
Bank. In 1997, Professor Yunus
led the world’s first Micro Credit
Summit in Washington, DC.
He also has served on many
UN advisory groups, committees
and commissions dealing with
women, as well as education,
population, health, disaster prevention,
banking, and development
programmes. He is on the
boards of many international
organizations, and has received
numerous international awards.
Banker to the Poor is his autobiography,
published in 1998.
Nobel Peace Prize 2006
Here’s what the Nobel Committee
had to say when announcing
this year’s honoree, and later at
the prize ceremony:"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
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.
... Muhammad Yunus has shown
himself to be a leader who has
managed to turn visions into
practical action for the benefit of
millions of people, not only in
Bangladesh but also in many
other countries.
... He is called the banker of the
poorest. And Grameen Bank,
which means “village bank”, is the
world's biggest bank for poor
people.
... Credit means to trust, to give
someone ‘credit’.”
Yunus’ Nobel lecture akin to IE Alumni
Conference 2004
At the award ceremony in Oslo
on 10 December, Yunus’ words
were reminiscent of the messages
we heard during his
presentation at the IE Alumni
Association’s Annual Alumni
Conference in 2004:
“In 1974, I was teaching economics
in one of the universities in
Bangladesh.
... immediately after Bangladesh
became an independent country
we had a terrible famine, so that is the context in which I was
teaching econometrics and elegaterian
economics.
... my theories are not quite relevant
to the lives of the people who
are suffering this extreme situation.
All I wanted to do is to see if
there is something that I can do...
make myself useful in some way.
... I decided to make a list of the
victims of this money-lending ‘business’ in the village next door
to our campus. When my list was
done, it had the names of 42 victims
who borrowed a total amount
of USD 27. I offered USD 27 from
my own pocket to get these victims
out of the clutches of those
money-lenders. The excitement
that was created among the
people by this small action got me
further involved in it. If I could
make so many people so happy
with such a tiny amount of money,
why not do more of it?
So first my loan and then I
thought if I want to continue I
should find the way to make it a
kind of regular business rather
than for me to come up occasionally,
make a list and give the
money. And I thought maybe I
should link the people in the village
with the bank, which is located
in the campus.
... The banker said: poor are
not creditworthy. Everybody told
me the same thing. The bank
isn’t lending money to the poor
people.
... So I did it and I came up with
some tiny little rules to make it
easy for them to pay back
... Everybody paid back.
... one village ... two villages
... five villages ... 20, 50, 100
villages.
... So I went to the government
to get the permission because
I need the permission to set up
a bank. To make the long story
short, it took me another two
years to persuade the government.
We got the permission and we
became a bank, a formal bank,
Grameen Bank. We were absolutely
delighted that it could
happen. And then we kept on
expanding and people later on
keep on asking me, how did you
find all these rules that you built?
... we look at the conventional
banks, how do they do it, and we
reversed it and we got Grameen
Bank. Banks do business on the
principle that the more you have
the more you can get. We reversed
it: we said the less you have
the more attention you get from
us. If you have nothing you get
the highest priority from us, so
this is the reverse of the basic
principle of banking.
... We said, if we abandon that we
are not looking at what you have,
we are looking at people, what
they could be.
... Grameen Bank is based on
trust... Convential banks are
owned by rich people. Grameen
bank is owned by its own borrowers,
who are extremely poor
people. And one of the basic principle
we adopted in our methodology
is that people should not
come to the bank, bank should go
to the people.
... So this is the challenge... Old
rules can reproduce old results.
To produce new results you have
to have the courage to break out.
Thank you very much.
The reach of micro-credit
Grameen Foundation works to
reach the world's poorest people
across the continents: North
America, Latin America and the
Carribean, The Middle East and
North Africa, Sub-Saharan Africa,
South Asia, East Asia. Grameen
methods are applied in projects in
58 countries, including the U.S.,
Canada, France, The Netherlands
and Norway.
For further information:
www.grameen.com
www.grameen-info.org
www.grameenfoundation.org/
nobelprize.org/nobel_prizes/peace
/laureates/2006/
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