Friday, October 13, 2006
Mr Yunus, an economist, founded the bank, which is one of the pioneers of micro-credit lending schemes for the poor in Bangladesh.
The bank is renowned for lending money to the least well-off, especially women, so that they can launch their own businesses.
Grameen uses a very clever scheme to assure repayment of uncollateralized loans: Potential borrowers are placed in groups of five, and loans are made to two of them. The others can receive loans only from the repayment of the initial two.
Building the institutions of market capitalism include recognizing, as Grameem does, that access to credit for creating new goods or housing is something to be available to all, determined only by the creditworthiness of the project. Expanding the circle of those able to truck, barter and exchange improves lives for us all. That's a Peace Prize worth celebrating.
Worth reading: a recent AEI report on Grameen.
Filed in: economics