MercoPress. South Atlantic News Agency

Nobel Peace Prize for the “banker of the poor”

The Norwegian Nobel Committee announced Friday the Nobel Peace Prize for 2006 was awarded, divided into two equal parts, to Bangladesh economist Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below.

"Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means and development from below also serves to advance democracy and human rights", said the Nobel Committee.

"Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea, but from modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty".

Muhammad Yunus is often referred to as "the world's banker to the poor" and his revolutionary Grameen (Village) banking system is estimated to have extended credit to more than seven million of the world's poor, most of them in Bangladesh, one of the poorest nations in the world. The vast majority of the beneficiaries are women.

Mr Yunus came up with the idea in 1976 while teaching economics at Chittagong University in southern Bangladesh.

The first loans he issued had a value of 27 US dollars and their recipients were 42 women from the village of Jobra, near the university.

The success of Mr Yunus' scheme exceeded all expectations and has been copied in developing countries around the world.

"Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity participates on an equal footing with the male", underlined the Nobel Committee.

"Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development".

"I'm absolutely delighted. I can't believe it happened, it's a great honor for Bangladesh, it's a recognition of our work" said Yunus on hearing of the award. The 66 year old economist said he would use the 10m Swedish kronor, approximately 1.1 million Euros to "find more innovative ways" to help the poor launch businesses.

"Micro-credit is something which is not going to disappear... because this is a need of the people," he said.

"Whatever name you give it, you have to have those financial facilities coming to them because it is totally unfair... to deny half the population of the world financial services. Besides poor people pay back, it's the rich that usually don't return the money".