Muhammad Yanus, founder of Grameen Bank, won this year’s Nobel Peace Prize. This is a fitting recognition for someone who thought outside the box and revolutionized micro-financing. As someone who had a short stint with a development NGO, I know that the Grameen-style micro-financing scheme remains the gold standard.
Recognizing that traditional lending institutions ignore the poorer sectors which are considered too risky because of inadequate collateral and know-how in managing finances, Grameen turned this perception upside down by lending to marginalized sectors in small amounts and instituting a system that ensures payment in place of collateral. Yanus found a way to facilitate access to credit for those belonging in the lower economic rungs of society.
In addition, the fact that women comprise the main market of Grameen means the bank’s lofty ideals represent a step in the right direction as it empowers women in impoverished areas.
The well-deserved recognition raises not only Grameen’s profile but the importance of micro-financing in developing nations in general.
Here’s hoping other worthy organizations like Caritas and Medicins sans Frontieres get recognized for their quiet but trailblazing development work as well.
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