Posted on July 9, 2009 - by boris

Access to credit is a human right – Yunus…

BusinessReport posted:

THIRTY years since launching his pioneering microfinance credit scheme in Bangladesh, Nobel Prize winner Muhammad Yunus is now looking for ways to provide financial assistance to the children of his initial borrowers.

Yunus, who is in the country as a guest of the Nelson Mandela Foundation, said extending loans to second-generation members would ensure that they stayed in school, and would address other social problems facing them.

The Bangladeshi-based Grameen Bank, which he founded in 1976, focuses on microfinance and serves entrepreneurs too poor to qualify for traditional bank loans. Grameen has nearly 8 million borrowers, 97 percent of whom are women.

Microcredit exists in some form in every country. Yunus said that his work involved extending banking services to the poor, as two-thirds of the world’s population fell outside the banking system.

According to Yunus, the sole motive of profit maximisation does not give justice to human beings. He argues that access to credit is a human right, adding that the aim of true microfinance is not to make money but rather to help people.

Banks are often reluctant to give loans to the poor.

Meanwhile, entrepreneurs complain that inflexible lending criteria inhibit the growth of their businesses.

Yunus, however, claims that the poor are better at repaying loans. Since Grameen’s inception in a small Bangladeshi village, the bank has lent more than $7 billion (R57.3bn) to the poor, with a repayment rate of almost 100 percent.

Today the bank has branches globally, even lending to poor residents of New York City.

Yunus advocates social businesses that impact directly on the lives of people – something he said was not addressed by conventional businesses.

He says that while the levels of technology around the globe are at record levels, this technology is in the hands of business and only used for making money.

But utilised in creative ways by social businesses, technology could solve many problems, he said.

He pointed out that while several financial institutions had collapsed and others were taking strain, Grameen Bank had not been affected by the global financial crisis. This was because it gave loans against real assets, sometimes even goats and chickens.

Source:http://www.busrep.co.za/index.php?fSectionId=2880&fArticleId=5073621