Friday, October 13, 2006

a well-deserved nobel prize

I was glad to see Bangladeshi banker and economist Muhammad Yunus and his Grameen Bank win the Nobel Peace Prize. Yunus and his Grameen Bank launched the concept of microcredit by making tiny loans -- sometimes just a few dollars -- available to poor Bangladeshis way out at the low end of the income distribution. Such people could never hope to get credit from traditional financial institutions. These borrowers -- many of them women -- use these small loans to invest in very small businesses, buying things like sewing machines or cell phones that they could use to earn a living.

The Grameen model has been copied in many developing countries, and frankly has probably had a concrete impact on more poor Bangladeshis and others than the big development projects. Well done, Nobel committee.


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