Nobel Peace Prize, cheapest loans and economy for the poor.

Bangladesh is a very poor country, with a very high rate of unemployment, and little life expectative. Established in South Asia, and with boundaries with India and Burma, this young country was settled in 1947, with the separation of India and Bengal. But independence was not still conquered: Pakistan ruled the region, until the war of independence, that happened in 1971 and led Bangladesh to become an autonomic country. As many other countries of the region, Bangladesh was ruled by coups d’etat, and full of famines and civil conflicts, and attained certain stability in 1991 when democracy was recovered. Why talk about Bangladesh? Because a Bangladeshi economist, Muhammad Yunus, has pionereed what today can be named as the cheapest loans a bank ever offered. The 13 October, 2006, Yunus won the Nobel Peace Prize for making his bank, founded in 1976, give very little loans to poor people in need of little amounts of money. As cited in Wikipedia, “millions of poor people no commercial bank would touch –destitute widows and abandoned wives, landless laborers and rickshaw drivers, sweepers and beggars” had the possibility to acceed to a money loan, in the very cheapest way. This type of loans was thought by the Grameen Bank and Yunus to try to find a solution to the poverty of the country, and even intended to reach other countries in develop. In an article on the New York Times, Yunus said that “microcredit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions”. Why did cheapest loans were thought as a solution? Because, as Yunus and his economy group studied, poor people is much more prone to paying the installments than people with more resources. That’s why he came to a scheme of almost insignificant loans, the minimum of them set at 12 dollars, to help the poorest people, and with very low interest (almost nothing). Of course, this type of credits was never thought as a business itself: it was thought as a way to solve poverty all around the world, and by now we can surely say that not other bank has taken this kind of measure, as they are all focused on business and making more and more money, every time. In the cheapest loans ever in history, “borrowers used the money to buy milk-giving cows, or bamboo to craft stools, or yarn to weave into stoles, or incense to sell in stalls, among myriad other money-making schemes”, according to the cited newspaper. The anecdote that marked Yunus’ idea tells that one day Yunus lent money to some workers (like 30 dollars), who repaid him fully, even though they had no goods attached to the loan, and no contract signed. As everything good in this world, Yunus was criticized, specially by people pointing out that cheapest loans were not a solution for poverty at all. What is true is that Yunus gave people the possibility to ask for loans of maybe a hundred dollars, without taking them collaterals that guarantee the payment, and without imposing tremendous interests on that loans. He was also put under the public eye when critics on him lending money to the poor to pay bills was a common action of Grameen bank. When he won the Nobel, the committee stated: “Yunus’s long-term vision is to eliminate poverty in the world. That vision cannot be realized by means of microcredit alone. But Muhammad Yunus and Grameen Bank have shown that, in the continuing effort to achieve it, microcredit must play a major part.” That makes pretty much clear what his vision is on the issue: poor people need to have access to loans, the cheapest they might be, and they should not be left alone when they need help, such as paying bills, solving debts, or affording their children’s education. Capitalism tries to teach us that the people with no resources is like that because in some way or other they chose to be like that –not because they were born in poor regions, or worse, not because they are lazy, as capitalists usually say. The poorest people are the ones that are more demmandant for work, for small sums of money, maybe to start a small business or to have something to survive, day by day, as an extra for their wages.

But in interviews yesterday, Mr. Yunus’s skeptics and fans alike credited him and Grameen with helping to fundamentally change the way the world saw the potential of poor people and to popularize the movement to provide financial services to the poor. Maybe you might see strange that Yunus, with his policy on economy, has been awarded the Nobel Peace Prize, but this goes into a wider definition of “peace”: in this case, peace involves the possibility for the poor to develop, to have their own possessions, to start business and, why not, to have their own money. As for figures related in the New York Times, in 2005, “more than 100 million people received small loans from more than 3,100 institutions in 130 countries, according to Microcredit Summit, a Washington-based nonprofit advocacy group that Mr. Yunus helped found. The average loan from Grameen Bank was $130”. Average loan of 130 dollars?, you might ask with your eyes wide open. Well yes, that’s the policy, a very fine strategy to fight against poverty.

What cheapest loans have also achieved thanks to Yunus is giving women a much more important role in society. By lending them money, it was allowed to them doing things that otherwise they wouldn’t be able to, in a society that promotes domination and their lives are always supported by men, as in most countries of Eastern Asia and Africa. This kind of loans proved to be a very useful remedy to fight also for equity, between men and women.

In this case, we can guarantee you that there’s no trick hidden. Yunus’s move was to promote a fight that no international do actually want to give: a fight against the absence of social justice.