It might not be strewn across TV screens and newspaper headlines every day like the pictures of Kim Jong-il or Mahmoud Ahmadinejad, but right now poverty is a bigger threat to the health and stability of this world than the “Axis of Evil.” Every day 30,000 people die because they are too poor to afford food or medicine. Half the world’s population, three billion people, lives on less than $2 per day and 800 million live on less than $1 a day. Clearly, poverty is one of greatest global challenges humanity has ever faced,which is why I was overjoyed to hear that Muhammad Yunus and his inspirational Grameen banking model were being internationally recognized.
Muhammad Yunus, the so-called “Banker to the Poor,” was awarded with the Nobel Peace Prize on Friday for his pioneering of micro-crediting, which has helped millions escape the strains of poverty. Yunus’ revolutionary lending system originated modestly enough with his Grameen bank in the poverty-riddled streets of Bangladesh in 1976.
Grameen began lending out micro-credit, small loans to poor Bangladeshis who did not qualify for loans from conventional banks because they lack either the collateral, steady employment or a verifiable credit history. Borrowers use the loans, which average about $200, to buy their own tools and equipment, thus cutting out middlemen and empowering them through self-employment and entrepreneurship. Even to this day there aren’t many requirements needed for a Grameen loan. However, there is strong social pressure to repay, because loan recipients must form groups of five and group members can only qualify for future loans when all other members have resolved their current loans.
Despite being unconventional, one can’t argue with the results as the Grameen bank proudly claims to have a 99 percent repayment rate. The success of the Grameen model has inspired similar efforts around the world. The World Bank estimates there are now more than 7,000 microfinancing institutions, serving 16 million poor people in both the developing and the industrialized world, and these auspicious numbers are only expected to keep rising.
Considering the times we live in, I am overjoyed that the Nobel Committee decided to choose Muhammad Yunus. More often than not the Nobel Peace Prize is given to people who excel in the area of conflict resolution, and you can’t blame the committee members considering the media’s daily reminders of the threats posed by terrorists and rogue regimes.
Nevertheless, this time the committee decided to look beyond the battlefield to remind people that there are many other peace-related issues existing that deserve equal attention, like the global poverty problem. More importantly the committee also reminded us that solutions like micro-crediting and people like Muhammad Yunus do exist.
Patrick Molnar is a business sophomore and Mustang Daily political columnist.