- The Washington Times - Friday, October 13, 2006

OSLO — Bangladeshi economist Muhammad Yunus and the Grameen Bank that he founded won the Nobel Peace Prize yesterday for their pioneering use of tiny, seemingly insignificant loans — microcredit — to lift millions out of poverty.

Through Mr. Yunus’ efforts and those of the bank he founded, poor people around the world, especially women, have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead.

The 66-year-old economist said he would use part of his share of the $1.4 million award to create a company to make low-cost, high-nutrition food for the poor. The rest would go toward setting up an eye hospital for the poor in Bangladesh, he said.

The food company, to be known as Social Business Enterprise, will sell food for a nominal price, he said.

“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,” the Nobel committee said. “Microcredit is one such means. Development from below also serves to advance democracy and human rights.”

Mr. Yunus is the first Nobel Prize winner from Bangladesh, a poverty-stricken nation of about 145 million people on the Bay on Bengal.

“I am so, so happy; it’s really a great news for the whole nation,” Mr. Yunus said from the Bangladeshi capital Dhaka.

Grameen Bank was the first lender to hand out microcredit, giving very small loans to poor Bangladeshis who did not qualify for loans from conventional banks. No collateral is needed, and repayment is based on an honor system.

Anyone can qualify for a loan — the average is about $200 — but recipients are put in groups of five. Once two members of the group have borrowed money, the other three must wait for the funds to be repaid before they get a loan.

Grameen, which means rural in the Bengali language, says the method encourages social responsibility. The results are hard to argue with — the bank reports a 99 percent repayment rate.

Since Mr. Yunus gave out his first loans in the 1970s, microcredit has spread throughout the developing world and is considered a key to alleviating poverty and spurring development.

Mr. Yunus established Grameen Bank in 1983. In the years since, the bank says it has lent $5.72 billion to more than 6 million Bangladeshis.

Worldwide, microcredit financing is estimated to have helped 92 million families last year alone, said Jove Oliver, spokesman for the Microcredit Summit Campaign, part of the Washington-based Results Educational Fund.

“Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development,” the Nobel citation said.

One of Mr. Yunus’ aides, Dipal Barua, said the award was an “honor for millions of poor women who have made this possible.”

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