Microcredit as a means of fighting poverty
By establishing Grameen Bank in 1983, Muhammad Yunus sought to realise his vision of self-support for the very poorest people by means of loans on easy terms. The bank has since been a source of inspiration for similar microcredit institutions in over one hundred countries.
Banks in the traditional system have been reluctant to lend money to anyone unable to give some form or other of security. Grameen Bank, on the other hand, works on the assumption that even the poorest of the poor can manage their own financial affairs and development given suitable conditions. The instrument is microcredit: small long-term loans on easy terms.
When Grameen Bank was awarded the Peace Prize in 2006, more than seven million borrowers had been granted such loans. The average amount borrowed was 100 dollars. The repayment percentage was very high. Over 95 per cent of the loans went to women or groups of women. Experience showed that that ensured the best security for the bank and the greatest beneficial effect for the borrowers' families.