Microcredit Pioneer Wins Nobel Peace Prize for Macro Impact
Bangladeshi economist Muhammad Yunus and the
Grameen Bank he founded won the 2006 Nobel Peace Prize for their
pioneering use of
microcredit to lift millions out of poverty.
"Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Microcredit is one such means. Development from below also serves to advance democracy and human rights," says the Nobel Committee citation.
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.
Here are some key metrics, facts, and figures:
- Yunus is the first Noble Prize winner from Bangladesh, a poverty-stricken nation of about 141 million people.
- In the years since Grameen Bank was founded in 1983, the bank has lent $5.72 billion to more than 6 million Bangladeshis.
- Of this, $5.07 billion has been repaid, as the bank says it has a 99% repayment rate.
- Today, the bank claims to have 6.6 million borrowers, 97% of whom are women, and provides services in more than 70,000 villages in Bangladesh.
- The bank is now 94% owned by the rural poor it serves and 6% by the government.
- Worldwide, microcredit financing is estimated to have helped some 17 million people.
- The World Bank estimates that 1.2 billion people representing 240 million families live on less than $1 a day. The Microcredit Summit estimates that $21.6 billion is needed to provide microfinance to 100 million of the world's poorest families. The goal of the NGO members of the Summit is to reach 175 million borrowers by 2015.
