For $1 a day, a Nobel Prize that is truly noble

In a world where everyday we read of killings on a global scale, of terrorism and the pathos of unending poverty affecting billions of people, last Friday brought wonderful news.

Muhammad Yunus and his Grameen Bank in Bangladesh won the Nobel Peace Prize in recognition of his pioneering work on micro-credit. Through Yunus’ leadership, tens of million of people have been brought out of poverty through micro-loans, some as low as $20. The Grameen Bank gives out these loans in countries around the world, with no collateral, no papers to sign and based on trust alone. In giving the award, the Nobel committee said “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty and micro-credit is one more such measure.”

I met Yunus seven years ago, when I sat next to him at a dinner given in his honor. I asked him to explain his program, and he invited me to come to Bangladesh and see it in action. I did that, spent time with him, went into the villages (Grameen means “village” in Bengali), saw the effectiveness of the work and have been deeply involved ever since. I joined the Grameen Foundation’s board of directors, serve on its executive committee and program committee, and am very active on a continual basis. These micro-loans are given mostly to women, are short-term in length and are granted repeatedly to those who resubmit. Not only has the economic situation of the recipients improved, but for the women — many of whom had never even touched money before — it has given them a boost in self-esteem and in status within their families and communities.

My wife, Lois, and I have seen micro-lending programs in action in several sites in India, China and Vietnam, and a program started here in North Hollywood. Grameen activity is expanding throughout the world.

The story of how this program began is quite remarkable. Yunus is an economist who earned his doctorate in the United States and was teaching here when he decided to return to Bangladesh to teach economics. One day he went into a local village, saw a woman making wicker baskets and asked her how much she earned. She replied that she was making two cents a day, and when Yunus asked her why so little, she said that she bought the reeds from a man who required her to sell him the completed baskets. He set both the purchase and the sales prices, and the two cents was all that was left.

When he asked her whether, if she had the money to buy her own reeds, she could sell the baskets herself, she replied that it would be easy to do so. When he asked how much money she needed to buy the reeds and be free of her current arrangement, she said she was part of a group of 40 women who worked together. She asked Yunus to wait while she checked with her group, and she soon came back and told him it would take a total of $27 for the 40 women to go into business for themselves. Yunus gave her the $27 from his pocket, came back a few weeks later and saw this new plan was working well.

That was the birth of his micro-lending, which eventually evolved into the Grameen Bank. The bank now has more than 6.6 million borrowers, with loans averaging just over $100 each. The bank has loaned more than $5.7 billion since it opened in 1983 and has a loan repayment rate of 98.5 percent.

Micro-lending has grown so rapidly that as of December 2004, more than 3,000 micro-enterprise institutions reached about 92.3 million people around the world. Through the use of credit and their own profit-making activities, millions of people are pulling themselves up from the scourge of grinding poverty into a new life, where they can feed, clothe and educate their families and live their lives with some dignity and hope for the future.

Yunus is a Muslim whose life is dedicated to tikkun olam, repair of the world. Today, the media so often links terrorism with the Muslim people, but Yunus may be doing more to repair the world than any other individual on the planet.

There are more than 1.2 billion people on earth who live on less than $1 a day, and more than 2 billion people living on less than $2 per day. Micro-lending functions at both the micro and macro levels. Micro in that you pull people one at a time out of the horrors of poverty, and macro in that you are attacking this massive problem of world poverty, a burden that 20 years ago seemed so vast that there was no way to even think of dealing with this catastrophe.

But through his great vision, incredible persistence and personal magnetism, Yunus has led micro-lending onto the world stage as an effective force in the battle against poverty.

I feel blessed to follow the leadership of a truly great man, Muhammad Yunus, who so richly deserved the Nobel Peace Prize. I urge you to get involved with Grameen as well.

For more information, visit grameenfoundation.org.

Richard S. Gunther is on the Grameen Board of Directors.