Nobel Laureate Announces Growth of Micro-Loan Program

By Aru Pande

Washington
12 August 2009

Global recognition including the Nobel Peace Prize and the Presidential Medal of Freedom has not kept Muhammad Yunus from his main goal - getting people out of poverty with the help of small loan-interest loans. The Nobel Laureate announced that his banking organization, Grameen America, has issued micro-loans to 1000 low-income borrowers in the United States.

Muhammad Yunus says he is on a mission to make the financial system accessible to every human being on the planet, whether they reside in a village in his native Bangladesh, or in the financial capital of the world - New York City.

Hours before receiving the Presidential Medal of Freedom from U.S. President Barack Obama in the White House Wednesday, Yunus told reporters in Washington that credit should be a human right available to anyone who needs it.

"Now we can build a new kind of financial system, a financial system which can work just like we do in Jackson Heights, giving people who are never able to open even a bank account, forget about taking a loan," said Muhammad Yunus.

Yunus began giving small personal loans to women in Bangladesh in the 1970's. The villagers eventually paid him back with interest, and this money was put back into the system, to provide loans to more low-income women.

Yunus was awarded the Nobel Peace Prize for his work in 2006, and his micro-lending program has launched into a worldwide movement.

Since January of last year, Yunus' Grameen America has lent over $2 million to U.S. women at or below the poverty line, allowing them to start or expand a small business. The loans are low-interest and collateral free, and so far, Yunus says they have been paid back at a rate of nearly 100-percent, despite a recession.

The Nobel Laureate says his locally-based micro-credit programs are unaffected by the global economic crisis.

"It's tied to real economy, not paper based economy where you create a fantasy world of finance, and that's what created the crisis, so we don't belong to the fantasy world," he said.

Yunus says micro-credit programs are especially vital at a time when unemployment rates are rising. He encourages governments to give people options that include the ability to become self-sufficient with the help of small, low-interest loans.

"They will build their own employment and in the process they will inspire other people that look I can handle myself, because I am an experienced person, I am a skilled person, why should I be sitting around and taking government money and live my life," said Yunus.

Yunus is taking this message and his micro-lending services to other parts of the U.S., as well as China, hoping to help lift more people out of poverty.