Bangladeshi wins Nobel Peace prize

I think it's about time he was recognized!!!

Grameen Bank is revolutionary, as it is:
1. Not derived from the largesse of the West or some Western institution.
2. Is one of the only solutions that I know of which poor people can use to lift themselves out of poverty.

Many in the West seem to think that giving people money, food or clothes helps them - IT ABSOLUTELY DOESN'T - it just breeds dependance and apathy. Grameen Bank helps people help themselves, which is the only real solution to poverty.

Great choice from the academy!! Cheers, Mr. Yunus! His work (and his book) are quite inspiring.

Alas, I'm soooo sorry for John Bolton...

I am delighted with the Nobel Committee's choice for the Peace and the Lit prizes. Not just because Grameen Bank, Mr. Yunus and Orhan Pamuk are worthy candidates but also because it sends a resounding message to their detractors - the usual suspects.

The popularity of microcredit seems to have much more to do with how its been succesfully pitched as the market solution to poverty than with any solid empirical results. This article reviews some the less than flattering outcomes of the microcredit appraoch, ones that tend to get glossed over in all the hype surrounding it.

http://taylorandfrancis.metapress.com/(0uzvsqy3x2pmvg45zn3wtmm4)/app/home/contribution.asp?referrer=parent&backto=issue,4,11;journal,21,62;linkingpublicationresults,1:101798,1

Despite charging high interest rates, these banks usually aren't economically viable, they operate with considerable subsidies from governments or aid agencies, and it appears that the loan recipients would have had equal financial benefit if these funds had been delivered to them directly as economic assistance. As for the premise of empowering women, this seems to at best be a mixed bag. Rather than overturning the traditional gender-based power differential, loan officers of the Grameen Bank have taken advantage of it to enforce repayment by playing on the dymanics of domestic violence. Bank workers also directlu humiliate women as a means of coercing repayment, one of their attempts actually driving a woman to hang herself.

I think I botched that URL, try

taylorandfrancis.metapress.com/index/YWH5NC61HYC14JAP.pdf

The article is,

Implementing and evaluating microcredit in Bangladesh
Ross Mallick

I had never heard of Yunus, but having now read about the Grameen Bank he seems a lot more worthy than most of the Peace Prize winners. And whatever defects the scheme may have, the default rates, if correctly reported, compare favourably with conventional banks.

And whatever defects the scheme may have, the default rates, if correctly reported, compare favourably with conventional banks.

No, they compare favorably to local money lenders but these banks charge about twice the rate of commerical banks in Bangladesh, and still need about half their funding from grant money to stay afloat.

Some cancelling out is taking place here. Micro-banks really are not a substitute for "handing out money", but a superior method of making gifts, and should be understood as such.

Commercial banks never lend to the borrowers Grameen lends to. The higher interest rates are probably a function of very high risk.

A completely mellow lender would be abused. I don't know the specifics of the harsh collection methods, and they might be abusive, but one of the problems with a lot of aid loans is that the receivers know that there will be no consequences to default.

Another problem with large-scale aid is that almost all the money is creamed off by politicians and bureaucrats. In many cases the aid is given knowing that this will happen -- as a kind of bribe. One of Grameen's triumphs is avoiding that.