Nobel Peace Prize goes to micro credit founder

Perro de Jong and Wendy Braanker*

13-10-2006

The Nobel Peace Prize has gone not to one of the highly tipped winners like pop stars Bono and Bob Geldof, but this year to the Bangladeshi economist and pioneer of microcredit, Muhammad Yunus. Last May, Professor Yunus was in the Netherlands in order to receive another prize: the Four Freedoms Award, for his unique take on the battle against poverty.

The system which Professor Yunus founded became known as microcredit: small, local loans without collateral where poor people can break out of the spiral of poverty. He shares his prize with the Grameen Bank - which he set up - literally meaning 'the village bank' - which has existed for thirty years in Bangladesh handing out small loans to poor entrepreneurs.

Some 100,000,000 people all over the world have already benefitted from microcredit, but that's still not enough, according to Professor Yunus. During the presentation of the Four Freedoms Awards in Middelburg he told Radio Netherlands Worldwide that in Africa and Latin America in particular, more people need to be made aware of the importance of microcredits. 'Bonsai people' is what Yunus calls the poor people who he's helped to assist,

"because society doesn't give them enough space to grow. That is why they remain small. There is no problem with the seed of the poor people. They are as good as human beings... as creative as human beings... as everybody else. Simply we did not have the institutions to support them."

"We did not have the policies to support them. So they remain in a flower pot. So I'm saying that it changes those things. Unless we change those - no matter how much growth you bring to the economy… that will not touch the poor people."

Poor people don't have the systems necessary to back them up financially. Professor Yunus hopes that the Nobel Prize will change all this. After the news became public he told RNW that he was
"delighted. I'm very very happy. Because it's not only personally me, it's a whole movement of microcredit. We have been trying to build up this movement, but still we couldn't get attention at the top level of governments."

"Today, with your endorsement, with the endorsement of the Nobel Peace Prize, this is a completely new picture. A lot of governments will be coming forward to make this happen now."
Interests
Commercial banks too have recently shown more interest in the ideas of Professor Yunus and the award of the Nobel Prize to the founder of microcredit will awaken even more interest. Arnold Kuipers of Dutch banking giant Rabobank believes the interests of the commercial banks will eventually be no different to those of Professor Yunus' Grameen Bank:

"It's in the interests of everyone and every institution and every individual - in the world - that by giving more economic prosperity - to individuals - it benefits world peace - and there are fewer tensions in the world."

The development organisation Cordaid is supporting the setting up of microcredit schemes in Bangladesh among other places. Director René Grotenhuis is happy that the prize went to Mohammed Yunus. It gives people the chance to organise their own future and it is not only a financial stimulus… it also means that the people who receive microcredit can believe more in themselves. But René Grotenhuis was also surprised at the recipient:

"I think that the Nobel Prize for Peace is more about people who specifically work in the area of war and peace… and so it is a surprise. But at the same time it is, I think, a fantastic prize, because it shows that work in the area of poverty and fighting poverty - are seen as a contribution to peace."

But there's also criticism about the fact that Professor Yunus received the Nobel Peace Prize. The Bangladeshi economist Rashed Al Mahmud Titumir from the development organisation Unnayan Onneshan thinks that poor people should of course have access to credit, but, he says, that doesn't solve the problem of poverty.

"Access to credit is important, especially to the poor. But what is disturbing is the process that has been followed in microcredit. If you take any village, you'd find a host of organisations providing microcredit. Then why, at the same time, do you find people languishing in poverty?"

"If it has been so successful, why do you find more people languishing in [more] poverty than what used to be the case when we just got our independence? …You can't show that microcredit has been graduating people out of poverty which is sustainable, in no country."

"Are we really interested in reducing poverty, or are we interested in making some showcases? This is a political question one has to ask. And simultaneously, if one looks at the whole history of Nobel Prize giving, in most cases these are related to political events."

*Translated and Edited by RNW Internet (cc)