September 25, 2004
Banmujer quoted as the "answer to the loan sharks"
By William Key
(Independent) - "A modest genius strode into the City the other day: a Muslim who, I am convinced, will change the way we help the poor. His name is Dr. Muhammad Yunus, head of Grameen Bank in Bangladesh. He lends to beggars.

Dr. Yunus virtually invented micro-credit in its modern form. Grameen has 3.7 million borrowers, mainly women, who live in 45,000 of Bangladesh's 68,000 villages. The bank is currently lending them the equivalent of £280m, an average of only £75 each. But that is enough for someone to buy beads, trinkets, toys or food to sell, instead of begging.

Dr. Yunus, a former economics professor at Chittagong University, had the insight to see that lending to the poor - shunned by orthodox lenders in all but the most exceptional circumstances - could be made to work and the money would be repaid. Grameen encourages its customers to keep a clean credit record by offering their children scholarships and by creating a star system for its 1,300 branches as they become more successful (…)

Dr. Yunus said: 'It can be done anywhere in the world, and we have demonstrated umpteen times that not only are the poor creditworthy, in many countries they are more creditworthy than the rich'. He launched the embryo of Grameen nearly 30 years ago, and a number of other Third World countries have spawned micro-finance institutions (MFIs).

Ockenden International, one of the three charities supported by The Independent's Christmas appeal last year, enables Cambodian villagers to buy a cow, paying in instalments. In Venezuela the Women's Development Bank Banmujer lends only to women who combine to develop a viable community project.

We are going to hear a lot more about this sort of finance, as the United Nations has designated 2005 its International Year of Micro-credit. The mainstream banks are going to come under pressure to explain why they do not undertake more or - in many cases - any micro-lending (…)".