Lend to beggars, Nobel laureate urges banks

[deadparrot]

OSLO (Reuters) - World poverty could be consigned to museums if banks and governments stimulate the creative energies of millions of poor people, Muhammad Yunus, the winner of the 2006 Nobel Peace Prize, said on Saturday.

Mainstream banks will come under pressure to lend to the poor after the award to Yunus and his Grameen Bank, the pioneer of microcredits, the maverick Bangladeshi predicted.

"When it's said that a banker got the Nobel Peace Prize it sounds funny," he told a news conference on the eve of the award ceremony in Oslo, triggering laughter.

"A Nobel Peace Prize for a banker? Other (bankers) will say: 'What are we? Why can't we get one?"'

http://news.yahoo.com/s/nm/20061209/wl_nm/nobel_peace_dc

[pinto]

1. He's right, the prize gives him a platform he wouldn't have had otherwise,

in all likelihood. I remember when the award was first announced. I read about his work with micro credit for the poor and was floored at the simple insight to it all, as well as the vision he champions - in the world of banking, no less. Kudos, again. I hope this gets some further press.

[Mythsaje]

2. Wasn't Cindy Sheehan nominated for this one?

It sounds like this guy definitely deserved it too. It's an awesome idea and they SHOULD look to implementing more ideas like this one. Here in the U.S. it might be a little rougher, since 50 bucks doesn't exactly go very far.

But I'm sure there's more than one street person out there with some great ideas that could be turned into money makers.

[ckramer]

3. The US banks have already done that in the current housing bubble

LOL

[AtomicKitten]

4. He was on Jon Stewart's TDS recently

Bill Clinton has promoted this fellow's theory of micro-lending and said it has been proven to work wonders in Third World countries to improve peoples' lives.

[Nikki Stone1]

5. How exactly does microlending work?

Thanks

[pop goes the weasel]

8. it depends on the rules of the lenders

Some microlenders--the ones with the best track records--only loan to women who first have to go through an educational program and who are required to meet together on a weekly or monthly basis to discuss their business strategies and personal problems that interfere. They are also the ones who decide who gets a loan, which is a good policy since they know what familes can be trusted to act in the family's best interest. But the more that the programs get away from that model, the more abuses creep in.

Anyway, you can look at the Kiva site for information about one sort of program: http://www.kiva.org/

[Nikki Stone1]

16. Interesting. It almost sounds like a self-help group

Thanks for the link

[rebel with a cause]

6. A little rain on the bankers parade

I will not swear to this, but this is what I learned on the subject from a professor doing research on the matter. In the beginning the loans were made to poor men, but they did not pay back the debts. Then the loans were made to women, who are oppressed in these societies. The women took the loans and some of them were successful, but more of them have found themselves caught up in a world of debt enslavement. First of all, many of these women had the men in their families take the borrowed money, leaving them with nothing to invest and no way to pay it back. They then borrowed more money to pay back the debtors and so on. Some of these women have ended up in prostitution to make the money to pay back the borrowed money, others continues to borrow more and more in an attempt to find a way to get out of debt to the Grameen Bank. I know quite a few people from Bangladesh, where this all began, and they say this is true and it is a very bad thing. Mr. Yunus has become very, very rich off of this system.

[Vidar]

7. Sounds about right. Welcome to DU.

[Richardo]

9. ...and yet the Nobel Committee knows nothing of this. Hm.

How curious.

[rebel with a cause]

12. Like I said

I am only repeating what I was told. I was also told that the micro-loan program was designed to really look good on paper. This information could all be wrong and the people who talked to me might have been lying through their teeth, but I don't know any reason they would have to do so. But stranger things have happened and I have known liars extraoridinare in my life time. This is one of those things that you have to make up your own mind what to believe. Personally, if it was only the professor, I would probably be a little doubtful. But because of testimony of the actual people that were its victims and the word of my Bangladesh friends, I have to believe it until I learn differently.

[newyawker99]

10. Hi rebel with a cause!!

Welcome to DU!! :toast:

[rebel with a cause]

11. hey newyawker99

Thanks. Wish I was there.

[Bridget Burke]

19. Got a link?

Surely there's at least one reputable source online that will substantiate your claims.

[rebel with a cause]

20. Sorry

but not really. My information came from five years ago when I was a Sociology graduate student. Since then, I have nearly died twice, been moved to a different town and most of my research papers have either been destroyed or are lost somewhere in storage. If anyone wants to look for such information, I imagine the best place to look would be in Sociology journals or such. I don't have access to such material/search engines. Dr. Kathryn B Ward was one researcher who has published articles on women's lives in Bangladesh, and her work would probably address this subject.

[Bridget Burke]

22. If you don't want to back up your statements, that's OK.

But your opinions simply remain--your opinions.

[rebel with a cause]

23. As yours

If you read my posts, you would have noted that I plainly stated that this was based on things that I had heard, because I have no data to back it up. I also stated that it was up to the individual to believe what they would, meaning that if they had questions about it they could check it out for themselves. It is not up to me to prove what someone else has said any more than it is necessary for you to believe anything that I say. Since I have never been a poor woman in Bangladesh, or even visited the country, I cannot swear to anything that has happened there. What I saw was videos of said women who supposedly were complaining about their debt, I don't speak the language so had to take the word of the interrupter of what they were saying. I also had persons from that country tell me that this was true, but I have no proof of that either. I happen to be someone who believes the "people" more than I believe the media or those who hold the power. Enough of this, I am tired and have to rest.

[gorbal]

26. I found a link in 5 seconds

You should use google to find a link before you get frustrated and give up on a discussion-

http://www.newsline.com.pk/NewsNov2006/newsbeat4nov2006.htm

The more critical section-

(snip)

However, there have been critics. The high rate of interest is seen to be exploitative and there have been accusations that the methods of recovery frequently employed by overzealous bank officials have led to extreme hardship. Many feel the skyscraper that now houses the bank distances it from the poor it represents. Close links with former U.S. President Bill Clinton and American media mogul Ted Turner, and the uncritical position taken by Yunus in his public interactions with them, have also been viewed with suspicion. Regarding the criticism of his economic model, Yunus has a simple answer: “The problem has to be solved. Should someone come up with a better solution, I would happily adopt it.”

In Bangladesh, a country largely known for its natural disasters, Yunus has provided the people with a sense of pride that they desperately needed. For years now, many have hoped that he would enter politics and provide a welcome alternative to power-hungry politicians. But despite being an adviser to the 1996 caretaker government, he has so far stayed away from mainstream politics.

That this teacher-turned-banker received the Nobel Peace Prize this year is not only a source of great joy to Bangladeshis, but also an honour they feel was long overdue.

(snip)

SO yeah, I will do some more research before I build this guy an altar and pray to it, but if you read the whole article you get the feeling he means well. It's just that some people are using his idea in a way he doesn't have much control over.

[Bridget Burke]

28. I don't build altars & pray to anyone....

Nor do I pray at any the existing altars.

[rebel with a cause]

30. Thank you for your advise and for finding a link

Unfortunately, my health does not allow me the luxury of having anything other than friendly discussions. That is why I was reluctant to post on this site in the first place. I am not being defensive, only honest. I could be wrong, but the poster didn't seem to me the type of person that really wanted prove of anything, was just upset at what I had written. Didn't want to waste any more time on it, but ended up doing so anyway. My bad.
:silly:

[Bridget Burke]

27. So--the rest of us should take the word of an anonymous stranger....

On the internet?

Yes, you need to rest a while.

[rebel with a cause]

29. Bridget

:-) Whatever. I have enough frustration in my life without looking for it here.

Bridget I have a feeling you have a bone to pick with me, something personal maybe from a blog long ago, but for me I have no time or energy to take you on. Bye-bye.

[Bridget Burke]

32. I have no personal bone to pick with you....

And I'm truly sorry that you've had such a sad life. And that the only stories you can repeat are negative ones.

[rebel with a cause]

33. Oh Bridget

My life has not been all sad or bad, although I have been told that if something could somehow go wrong, they would do so for me and that I would somehow survive it. All my stories are not negative ones, I call my life a comedy of errors and I love to laugh with people over things that have happened (good and bad) during said life. My sense of humor has gotten me through many hard times and it is doing so today. I have been given only a short time more to live, but then we all have to die some time, don't we?

The information I gave about the micro-loans was four years old, which I clearly stated, and I will be more than happy to find out it was wrong. I have read the other posts and am reminded that there are usually two sides to a story. I am sorry that I have upset you so much. Relax and enjoy the day.

Don't bother posting back to me, unless you just need to, because I really do need to exercise some restraint and stay away from this site. My daughter would be very upset if she knew I was posting at all. For some reason she wants to keep this "bitter old woman" (my self imposed nick name) alive as long as she can. She calls me three to four times a day just to talk and to make sure I am okay. Can't help but love the girl. My son is pretty special to me also. You see, I have some very positive things in my life. People who love me no matter how bad the times (and I) may be.
:silly:

[charlie and algernon]

13. 'Banker to poor' receives Nobel Peace Prize

http://www.cnn.com/2006/WORLD/europe/12/10/nobel.awards.ap/index.html

OSLO, Norway (AP) -- Bangladeshi economist Muhammad Yunus accepted the Nobel Peace Prize on Sunday, saying he hoped the award would inspire "bold initiatives" to fight poverty and eradicate the root causes of terrorism.

Yunus, 66, shared the award with his Grameen Bank for helping people rise above poverty by giving them microcredit -- small, usually unsecured loans.

"I firmly believe that we can create a poverty free world if we collectively believe in it," Yunus said after accepting the prize at City Hall in Oslo, Norway. "The only place you would be able to see poverty is in a poverty museum." (Watch Muhammad Yunus accept peace prize to standing ovation )

The Nobel Prizes, announced in October, are always presented in Oslo and Stockholm, Sweden, on December 10 to mark the anniversary of the 1896 death of their creator, Alfred Nobel, a Swedish industrialist who invented dynamite and stipulated the dual ceremonies in his will.



I met Yunnus last year, he's an amazing man with a heart of gold. He's done so much for Bangledesh and poor people around the world. You need to read his book, he talks about all the things the grameen bank has accomplished.

[MadAsHellNewYorker]

14. Congrats to Yunus!!!!!! Read his book if you haven't!

I highly recommend it
http://www.amazon.com/Banker-Poor-Micro-Lending-Against-Poverty/dp/1891620118

[smirkymonkey]

34. I'm sorry, but something about giving a BANKER a Nobel

Peace Prize just doesn't sit well with me. He's still charging interest and still making money off them.

I agree that the man is head and shoulders above most other bankers, but as long as there is any kind of profit involved, it just doesn't seem right to me, and certainly not Nobel Prize worthy.

[BridgeTheGap]

35. I doubt Junus has gotten filthy rich of this enterprise

The rates charged on these loans are extremely low. Someone has to pay for administering this program, right? He did something that established banks wouldn't even consider doing.

[comtec]

15. I hope he really has helped people

more than hurt. However it is not surprising either that the system was abused (at the top not the bottom ) The loaners of the world are generally evil, cruel people. I hope that what they say is true, and not the rumors.

I heard about this some time ago on NPR about micro lending in the 3rd world where it has helped women, in general, a great deal have their own lives apart from men. The best way to support woman's rights/freedom is to let them manage their own money.

anyway, lets hope the abuse is minor. if not, that's no surprise either. Remember all that Nazi gold the swiss still have?

[jwirr]

17. I think they are right. When you are trying to lift people up it would

be good to remember the early history of our own country. The small farms/cottage businesses that produced enough food/supplies for the individual family also created the wealth/capital that allowed them to prosper. Land reform is among the most important issues when it comes to defeating poverty. When a family is not spending every moment just trying to survive they will then be able to turn to creating extra income sources. Small is still beautiful, like E. F. Schumacher said in the 60s-70s.

[Vinca]

18. A good idea as long as the philosophy of our own bankers and

credit card companies isn't followed. They will lend to the poor, but the interest is out and out usurious. You can't get ahead if it's impossible to pay off the creditor.

[rebel with a cause]

21. exactly!

Been there, done that!

[comtec]

24. I declaired bankrupcy a year before the new law took effect...

And it was a great weight off my shoulders. if you look at the principle I paid that off twice. But the interest was killing me. I am a IT guy and I could not make enough after 9/11 because bush raped the economy so much, and sent phone support jobs to india faster than you can saw, wtf! I was a mid level tech then, and could not get permanent work to save my soul! All the mid level stuff was taken by senior tech, and all the low level stuff was shipped off.

I didn't have that much debt, less than 25k, but I was still drowning in it. I tried to work with my creditors, to get them to freeze the account and stop the interest for a bit, to WORK WITH ME, and they just refused and treated me like scum. I could have paid off several of my bills (principal) if they would have let me, but that was just not in the dice.

I hated doing it, i actually put it off for months - ironically because declaring bankruptcy it self is a VERY expensive process. In eh end it cost me 500 dollars and 8 months late filing. But it was done. everything but my student loan was gone. IMHO student loans should be included, but that might be too fair... oh well.

Now the new law is beyond corrupt.

Bankruptcy is a horrible, degrading, belittling process. We are Americans dammit, we work our way out god damned it... but sometimes you just can NOT win. I was paying credit cards off with unemployment money. Money for rent and gas and food.

well it's past now. and I am moving on with my life. My parents (mega blush) paid off my loans, they were able to pay off the principal because it was one lump sum. I can't tell you the shame I feel towards that. but grateful towards them as always. I'm lucky, very much so. Most people aren't and that's the real crime. That eduction should ruin someone forever.

[rebel with a cause]

25. I feel your pain

You are very lucky to have parents that can help bail you out. I was a housewife in the eighties that the credit card companies convinced to take out cards in their names, so as to build up credit of their own. Come the nineties and there was a divorce, with me left with the debts and no job. Unfortunately, I am not the only woman who was in the same boat, but I will stick with my own story. Went back to school so I could have an occupation and support my children. Wasn't that what they said we should do???

Well, it worked out fairly well, until I found out something was going on in my agency, did the right thing, and was rewarded by being forced out of my job and black listed. Now I was not the only one for this to happen to, but that did not make it any better. The government employment agencies then advised me to go back to school and get more education, and more student loan debt. All this time I am trying to pay off my debt, but the interest is going up and no matter how much I paid, I owed the same. Like you, the debtors were not interested in working with me.

By the time I got my master's degree I was older than most employers wanted and disabled on top of that. Three years I lived off the charity of my daughter, then a year ago I had my first heart failure. (Real fun.) This was followed by another failure, more serious, about four months later. I suddenly was given a small pension for my disability and Medicaid. Finally, I could get the care and the medicine I needed. (My children had been paying what they could to get medicine for me before this, but it would have been impossible for them to pay for what I take now.) As for my debt, my student loans are on hold and if I am still disabled in three years they will probably be forgiven. As for the credit cards, after seven years they are still calling for their money. Funny thing is, that they have spent much more in trying to collect the debt than I owe them. In fact, I owe them a penance. I am just poor beyond belief. :nopity:

Now I really do have to leave the site again, due to fatigue. :hide:

[groovedaddy]

31. Lobbying for the Grameen Bank

Making a Difference –

During the 1980’s, I worked with a group called R.E.S.U.L.T.S. lobbying Congress on hunger and development issues. This was at a time when the Reagan administration was recommending drastic cuts in funding for many development programs that the U.S. had been supporting. We also lobbied the media to bring attention to programs that were effective and in the process got the editorial support of many major U.S. newspapers, including the New York Times.

I’m proud to say that we supported Dr. Muhammad Yunus, current winner of the Nobel Peace Prize and founder of the Grameen Bank. Most current news media coverage does not mention the fact that traditional banks & lending institutions initially wouldn’t support Dr. Yunus’ goal of founding a bank that would make loans to the poorest of the poor. They were of the opinion that unsecured loans to the poor would result in default. Dr. Yunus, who received his PHD in Economics from Vanderbilt University, persisted in his mission and found private funding. The repayment rates of Grameen Bank loans are substantially better than at the banks that initially turned him down. Vindication is sweet!

In an Islamic country where women traditionally have played subservient roles, the Grameen Bank program has vaulted the status of women in this poor country. As these mirco-businesses became successful, women were financially able to build homes for their families. In a country where women are not allowed to own land, the Grameen Bank women pressed successfully to have the titles to the homes in their names. The husband owns the land, the wife owns the house! In a 1996 national Bangladesh election, women turned out in far greater numbers than men, a phenomenon attributed in part to the organizational help of the Grameen Bank. As a result, the Islamic Fundamentalist party went from 17 seats in the Parliament to 3.

My experience with R.E.S.U.L.T.S. proved to this political science major that a small group of committed citizens can make a huge difference. We wrote, called and met with Senators and Representatives, many of whom we rarely found ourselves in agreement with, and made our case for programs such as the Grameen Bank. Typically, these political representatives would have no knowledge about the programs we lobbied them about. We were educating them. I learned through this process that even though you may disagree with your representatives’ political affiliation, you can still influence some of the decisions they make. Senator Mitch McConnell (R-KY), whom I’ve never voted for, co-sponsored several pieces of legislation for our group. It’s also interesting to note that in 1992, then Presidential Candidate Bill Clinton, was asked about the Grameen Bank. To the reporter’s surprise, Clinton was very aware of Dr. Yunus and his work, saying “I think Muhammad Yunus should receive a Nobel Prize.”

Dr. Yunus currently serves on the R.E.S.U.L.T.S. Educational Fund board.
For more info: http://www.results.org/website/article.asp?id=19

Facts about the Grameen Bank

• The Grameen Bank was founded by Dr. Yunus in 1976 in Bangladesh to provide credit to the poorest of the poor.
• The Bank provides “micro” loans to individuals (primarily women) through group organizations. The group guarantees the loan. If one person in the group fails to repay their loan, it can jeopardize the credit standing of the entire group. Obviously, it is in the interest of the entire group that each borrower succeeds.
• The Bank has 2,226 branches in Bangladesh which serve 71,371 villages or approximately 6.61 million borrowers, 97% of whom are women.

For more info on Dr. Yunus
http://en.wikipedia.org/wiki/Muhammad_Yunus

Interview with Dr. Yunus
http://www.yesmagazine.org/article.asp?id=878