China invites Bangladesh's Grameen Bank for microcredit system trial

from Yahoo News India

By ANI

New Delhi, Bangladesh's Nobel Peace Prize winner, Muhammad Yunus, will be working with the Chinese government to bring his Grameen Bank lending system to rural China within a year.

Yunus said China had invited him to begin a trial of the "microcredit" system, which specializes in making loans of 100 dollars or less, in one of three remote locations of the country.

The test could lead to expansion of the program throughout the country, reports China Daily. In Yunus's native Bangladesh, Grameen Bank has provided collateral- free loans to five million people - 96 percent of them women - since 1976.

Yunus and Grameen were awarded the Nobel in October for their achievements in reducing poverty. Grameen is also noted for its loan repayment rate of more than 98 percent. Yunus said China already had more than 100 separate microcredit programs, but they had attracted only about 100,000 customers over the past 12 years.

As of now, China has given Grameen permission for the market test, and invited Yunus to select "a difficult spot" so that he could prove the value of the system. The Chinese trial is expected to begin with fewer than 50,000 borrowers, said Yunus.