Nobel Peace Prize For Bangladeshi Economist Muhammad Yunus and the Grameen Bank

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Fighting poverty leads to peace, says Nobel Committee.

We saw that money that went to women brought so much more benefit to the family than the same amount going to the family through the man

When economist Muhammed Yunus started a movement in the 1970s that overturned many conventional ideas about banking and helped millions of Bangladeshi families break away from poverty’s grip, little did he know it would lead to the Nobel Peace Prize.

Once steeped in poverty and misery Bangladesh has made significant progress in reducing poverty and improving the lives of its people. Yunus started his micro-credit banking system when he found that, even for a very small amount of money, people had to go to the moneylender. Banks would not lend money to poor people.

“Our principle is that the less money you have, the higher priority you are given,” explained Yunus in an interview with Vision Magazine. “We lend to people without any jobs, without any land, without any income. And we focus on women.”

Today the Grameen Bank has 6.4 million borrowers, and 96 percent of them are women. This too is a complete reversal of the conventional banking system, because conventional banks focus on men. “We saw that money that went to women brought so much more benefit to the family than the same amount going to the family through the man,” comments Yunus.

In the 1990s poverty in Bangladesh shrank by 9 percent, stemming in large part from strong, sustained economic growth -- twice the average rate of other low- and middle-income countries. Every year around one million jobs are created for new entrants to the country’s work force, many of whom are women.

Over the past thirty years this new banking policy has brought remarkable changes to Bangladesh. There are now more than 2000 branches of the Grameen Bank across the nation. The results show in the social development index: in 2005, China was first; Cape Verde was number two and Bangladesh was third. And it’s happening because female empowerment in Bangladesh freed millions from the grip of poverty.

"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 in Oslo, Norway. "The causes of war, such as hunger and poverty, must be treated at their roots. Microcredit is one such means."

The Nobel Peace Prize this year is distinct because it's really focused on Yunus' contribution to alleviate poverty. Read the full interview at Vision Magazine.

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Edwin Stepp
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