Muhammad Yunus and Grameen Bank win Nobel Peace Prize by AP / The Guardian 10:39am 14th Oct, 2006   Nobel peace prize 2006 citation:    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 translate visions into practical action for the benefit of millions of people, not only in Bangladesh but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea.    From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.    Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilisations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development. Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions.    Economic growth and political democracy cannot achieve their full potential unless the female half of humanity participates on an equal footing with the male.    Yunus"s long-term vision is to eliminate poverty in the world. That vision cannot be realised by means of micro-credit alone. But Muhammad Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major part.    Below is a telephone interview with Professor Muhammad Yunus immediately following the announcement of the 2006 Nobel Peace Prize, 2006. The interviewer is Adam Smith, Editor-in-Chief of Nobelprize.org.    Two very quick questions. The first is, obviously the prize will bring greatly increased publicity for your work, is there any particular message you would like to use the opportunity to get across?    [MY] – The one message that we are trying to promote all the time, that poverty in the world is an artificial creation. It doesn"t belong to human civilization, and we can change that, we can make people come out of poverty and have the real state of affairs. So the only thing we have to do is to redesign our institutions and policies, and there will be no people who will be suffering from poverty. So I would hope that this award will make this message heard many times, and in a kind of forceful way, so that people start believing that we can create a poverty-free world. That"s what I would like to do.    [AS] – Does your work with the Grameen Bank over the last three decades make you more hopeful that this is possible?    [MY] – Oh yes, very much, we see the demonstration of it every day. People come out of poverty every day. So it"s right in front of us what happens and it can be done globally, it can be done more forcefully, we can organize more things to go with it, so this is something not theoretical issue, it"s a very real issue. People can change their own lives, provided they have the right kind of institutional support. They"re not asking for charity, charity is no solution to poverty. Poverty is the creation of opportunities like everybody else has, not the poor people, so bring them to the poor people, so that they can change their lives. That"s all we are doing. We didn"t do anything special; lend money to the people so – but they never lent it to the poor people – all we did was we lent it to the poor people, and that makes the trick. That makes the change.    Muhammad Yunus said he would donate his share of the $1.8 million prize money. Mr Yunus said he would use his share to fund a project to produce cheap, nutritious food for the poor, an eye hospital, a drinking water project and a health-care scheme. "I will donate all my money to these enterprises," he said. "These will be purely social business enterprises - not-for-profit organisations."    October 14, 2006    Banker to the world"s poor wins Nobel peace prize, by Randeep Ramesh. (The Guardian)    A Bangladeshi economist yesterday won the Nobel peace prize for helping to lift millions out of poverty by lending tiny amounts of money directly to the neediest people on the planet.    Muhammad Yunus, the microcredit pioneer, and the bank he founded in Bangladesh, Grameen, were presented with the award and the 10m kronor cheque (£800,000) for his work in creating a nation of entrepreneurs.    The Nobel committee said their efforts showed how working to eliminate poverty could result in peaceful development.    "Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty," it said in its citation. "Microcredit is one such means. Development from below also serves to advance democracy and human rights."    Mr Yunus became the first Bangladeshi to win the Nobel peace prize and was immediately feted in his home country, where he is already a national hero.    Bangladesh"s prime minister Khaleda Zia, a childhood friend and schoolmate, thanked him for the "selfless service that you have rendered to the poorest of the poor bringing hope to the hopeless and giving them a cause of life".    Although not a household name in the west, Mr Yunus is a familiar name on the international development circuit where he is known as "banker to the world"s poor". Such was his reputation that in 1987, when Bill Clinton was the governor of Arkansas, he approached Mr Yunus to help them replicate its model in his state.    Mr Yunus"s insight was to recognise that the surest route out of destitution was to help the poor to help themselves. As a professor of economics in 1974 he was astonished to learn that women in a nearby village making bamboo stools could not make money because they were being charged extortionate rates of interest. The outstanding loan, which ensured a life of penury, was just $27 (£15).    Instead Mr Yunus lent the villagers the money to buy their own materials and cut out the middleman. They all paid him back, day by day, over a year, and his impulsive gesture slowly became a fully fledged business with the founding of Grameen Bank in 1983. "In showing that poor people could be productive and make money he broke with the old mindset that all aid should be about providing services like education and health," said Kevin Watkins, director of the UN human development report office.    Since then Grameen has lent $5.7bn, in a country where almost half the country"s 140 million people live in poverty.    Today Mr Yunus" bank has 6.5 million borrowers in Bangladesh, 97% of whom are women.    Many say this alone has changed the fabric of the Islamic nation. "This is a significant change empowering women. I think Grameen is powering a social revolution in our country. We have seen evidence of this in sharply increasing primary school enrolment rates," said Debrapriya Bhattacharya, director of Policy Exchange, a thinktank in Dhaka.    Mr Yunus has recently pointed out that Bangladesh has been reducing poverty by 2% a year since the turn of the millennium. If sustained this rate of poverty reduction will see the country halve the number of poor people by 2015.    Mahfuz Anam, editor of Bangladesh"s Daily Star, said: "He passionately believes that, like freedom of speech, credit is a fundamental human right and everybody should have access to it. Without access to money how can you live is his view."    But Mr Yunus" hard-nosed approach extends to a refusal to respond to beggars. "I feel bad - sometimes I feel terrible - that I"m denying the person," Mr Yunus told Reuters in a 2004 interview.    "I would rather try to solve the problem than just give them a hand and take care of them for the day."    How it works    Microfinance is lending to poor, often illiterate, people who have no collateral, no business experience and who therefore cannot normally borrow from the banks.    In the developing world the poor often work at home with raw materials bought with borrowed money.    The finished wares have to be sold back to the moneylenders, leaving scarcely enough, after repaying the loan with interest, to feed the family. So to make the next batch of goods poor people have to return to the moneylenders.    A failure to repay a debt ends up with people paying by working. The result is bonded labour, often with the children bearing the burden of unpaid debts.    Microfinance banks break the cycle by lending to the poor to buy raw materials. This means the workers can sell at a fair price on the open market, a price which means enough to service the debt, feed the family and make a profit.    To ensure that debts are paid, money is lent to groups, often women, who appear to respond better to financial terms.    Less than a dozen clients guarantee each other"s loans and a default by one could result in the entire group being penalised.    The resulting peer pressure means repayment rates exceed 95%.    The idea has spread across the globe. More than 10,000 microfinance institutions are in existence with a loan portfolio exceeding $7bn (about £3.8bn).    Most of them are very small, with a client base of less than 2,500.    Click on the link below to visit the homepage of the Grameen Bank.    13 October 2006    Annan hails new Nobel Peace Prize laureates for championing the poor. (UN News)    United Nations Secretary-General Kofi Annan today hailed the award of this year’s Nobel Peace Prize to microfinance economist Muhammad Yunus and the Grameen Bank of Bangladesh as a victory for efforts to help to “break the vicious circle of poverty” and set low-income families on the path to prosperity.    “They have provided a powerful weapon to help the world reach the Millennium Development Goals, by helping people change their lives for the better – especially those who need it most,” Mr. Annan said in a statement issued by his spokesman, referring to the targets set by the UN Millennium summit of 2000 to dramatically slash poverty, illiteracy, maternal and infant mortality and a host of other global ills by 2015.    “The Secretary-General is delighted that the Nobel Peace Prize for 2006 has been awarded to Professor Muhammad Yunus and the Grameen Bank of Bangladesh, pioneers of the microfinance movement and long-standing allies of the United Nations in the cause of development and the empowerment of women,” the statement added.    “He notes that thanks to Professor Yunus and the Grameen Bank, microfinance has proved its value as a way for low-income families to break the vicious circle of poverty, for productive enterprises to grow, and for communities to prosper.”    The specialized UN agency dedicated to eradicating poverty and hunger in rural areas of developing countries also welcomed the award.    “Professor Yunus’ leadership has brought opportunities to millions of poor rural families worldwide,” International Fund for Agricultural Development (IFAD) president Lennart Båge said.    “Professor Yunus challenged IFAD and other international financial and humanitarian institutions to question their approaches and to find better ways to serve poor people” said Mr. Båge.    Mr. Yunus and Mr. Båge are champions of the nine-year Microcredit Summit Campaign launched in 1997 to reach 100 million of the world’s poorest families, especially the women of those families, with credit for self employment and other financial and business services.    IFAD was one of the first UN agencies to support Professor Yunus initiatives on behalf of poor rural people. From 1981 to 1995, it provided capital to the Grameen bank through three projects. As the bank gained momentum and became an ever more successful and sustainable institution, donor financing was reduced. Visit the related web page
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