Banker To The Poor Wins Nobel Peace Prize

Muhammad Yunus, the founder of the Grameen Bank, which makes microloans to the poor, is this year's Nobel Peace Laureate. Yunus founded the bank as a way to harness the fierce entrepreneurialism of the poor, who are held back by a lack of reasonably priced capital. It's not only good for the poor, but the bank now apparently makes a profit.

As I wrote in Reason back in 2000:

An authentic hero, Muhammad Yunus, the Founder and Director of the Grameen Bank in Bangladesh gave a keynote speech during lunch. Yunus was introduced as the person who has done "more than anyone in history to empower the poor." The Grameen Bank, founded by Yunus in the 1983, makes very small loans to very poor people in Bangladesh who use them to establish tiny businesses. Grameen has 2.4 million borrowers, 95 percent of whom are women. The bank concentrates on lending to women because bank research has shown that women tend to have a longer term planning horizon and spend more business profits on family members than do men. The example of Grameen has inspired a global microcredit movement that has spread to 65 developing countries and has reached 17 million borrowers around the globe. Grameen, organized like a credit union, is profitable. "It is not a charity; it is a business and its funds are recycled and continues to grow," underscored Yunus.

Yunus is also extremely excited about the potential of information technology to help the poor in developing countries, and he's not just being theoretical about it. Grameen Phone has distributed more than 2,000 mobile phones to "phone ladies" in 2,000 villages. The phone ladies sell phone service to villagers and thus pay for the phones while earning double the national average income. Yunus is also working with Hewlett Packard to bring internet kiosks to villages. The Grameen Digital Centers will be operated by touch screens and voice commands so that even illiterate villagers can use them.

In making the award, the Nobel Committee declared:

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.

Hearty congratulations to Muhammad Yunus and his colleagues at the Grameen Bank.

Addendum: Yunus also won the World Food Prize in 1994. Awarded annually, the World Food Prize is the foremost international award recognizing the achievements of individuals who have advanced human development by improving the quality, quantity or availability of food in the world.