Muhammad Yunus, this year's Nobel Peace prize winner's greatest accomplishment may be that he has figured out a way of fighting poverty while restoring dignity to the poor.
The sheer numbers of his Grameen Bank micro-credit project are well known; millions of the poor helped, practically all women, $5.7 billion given out in loans with a repayment rate of 98.5 percent. In a poor country like Bangladesh , the benefits of a successful loan increase exponentially, as for each person helped a family is lifted out of poverty. Prior to this, the women recipients of these loans were virtual economic slaves to the local moneylenders.
The basis for this successful scheme is compassion and trust. The close-knit village community is partially responsible that the loans are paid back. Relying on the honor system to repay the loans and accomplishing a repayment rate of close to 100 percent is a tribute to old-fashioned honesty.
By loaning, rather than giving money away in charity, Yunus frees the recipients of the crushing burden of others generosity. In the usual way of giving an unequal relationship between those who give and those who receive develops, which may lead to a sense of humiliation and sometimes resentment.
In the Yunus system, this differential between the donor and recipient does not exist as the recipients have a chance to repay their loans. The recipients are helped without losing their dignity, which is an invaluable boost to the self-esteem of those who are poor mostly because of circumstances beyond their control.
The way in which Muhammad Yunus has conceived his scheme, the poor are at the heart of the economy. His system takes inspiration from the Islamic view of economy that Michael Bonner has called "the economy of poverty." It is no trickle-down economics.
Although it may not be possible to replicate this methodology in some urban societies, designing economic models that keep the poor at their heart is feasible. What is required is imagination and genuine compassion, which would be a paradigm shift in the current banking models where increasing wealth and dividends is paramount. If the Grameen Bank system were to succeed on an even larger scale, its transforming powers on reducing poverty would be massive and result in healthy social change. Societies that are prosperous, where citizens feel they have a fair shot at improving their lot are predictably peaceful.
While managing billions of dollars, Muhammad Yunus has refused to enrich himself.
Muhammad Yunus, a Muslim economist from the poorest country of the world, is a role model for all in the anti-poverty business. The recognition of his work by the Nobel committee is a morale booster for Muslims, as he is the third Muslim recipient of this award in past four years.
Founding member of a Chicago based Muslim American think tank, "The International Strategy and Policy Institute"
VOICE OF THE PEOPLE (LETTER)
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