[Comment] Story of microcredit's Nobel Peace Prize an inspiring one

from The Desert sun

Rhonda Abrams

Entrepreneurship can change the world. For the first time, the Nobel Peace Prize was awarded to the founder of a profit-making business and his company - a bank that grants microloans to millions of the poor, helping them start businesses.

On Dec. 10, the Peace Prize was awarded to Muhammad Yunus and Grameen Bank for their pioneering work in microcredit.

Yunus' story is inspiring, demonstrating the incredible impact one person can have on the world.

Yunus was an economist overwhelmed by famine and poverty in his native Bangladesh. In the 1970s, with $300 of his own money, he began lending tiny amounts of money - sometimes as little as $1 - to help women pull their families out of poverty, primarily by starting small businesses.

In doing so, Yunus launched a worldwide microcredit movement - giving tiny loans to low-income people. Grameen Bank's loans average about $200.

Today, Grameen bank has almost 7 million borrowers - 97 percent of whom are women. The bank has loaned more than $6 billion. More than 80 percent of poor families in Bangladesh have been reached with microcredit. Yunus hopes that by 2010, 100 percent will be reached.

Remarkably, Grameen Bank has a repayment rate of 99 percent. Last year, the bank had a profit of $20 million and a staff of 20,000. The Grameen Trust has more than 100 partner microfinance institutions around the world.

Most importantly, according to their records, 58 percent of the women who have borrowed from Grameen Bank have risen above the poverty line. Many borrowers' children have become doctors, engineers and other professionals. These women pulled themselves and their families out of poverty through their own hard work, ingenuity and just a little bit of financial help.

Yunus says he dreams of a day "when nobody will be a poor person." But he believes in capitalism and entrepreneurship to achieve this.

"By defining 'entrepreneur' in a broader way, we can change the character of capitalism radically and solve many of the unresolved social and economic problems within the scope of the free market," Yunus said in his Nobel Prize acceptance speech. "Let us suppose an entrepreneur, instead of having a single source of motivation ... now has two sources of motivation ... a) maximization of profit and b) doing good to people and the world."

In the U.S., microlending is often achieved through credit cards because microlending is too expensive administratively for traditional banks. But many of the most needy do not have credit histories, and credit cards can have very high interest rates.

Congress approved $2 million in direct microloan funds for fiscal year 2007 (used to leverage another $28 million of private money) and $10 million in microloan technical assistance.

In 2005, the microloan program resulted in 2,474 loans averaging $13,042 and totaling over $32 million. About 45 percent of the loans went to women.

You can support microlending in several ways:

Encourage groups in your community to start and support microcredit programs.

Donate to microcredit organizations.

Spread the word. Tell your fellow entrepreneurs and members of community, religious or ethnic groups.

Urge your elected officials to support the U.S. microloan program.

You'll find a directory of microenterprise programs in your state, along with other resources on microcredit, at the Web site of the Aspen Institute, www.fieldus.org.

Microcredit works. Yunus and Grameen Bank have proved that assisting hard-working but poor people to borrow small amounts of money to start their own businesses can change a community - whether in Bangladesh, Boston or Boise.