Nobel Prize Grameen Bank

I rather liked the 2006 Nobel Prize selection, Mohammad Yunus. His Grameen Bank micro-loan project seems to be a ringing success. I did find it interesting in last weekends Globe and Mail that the econ PHDs they talked with admitted that it was only a limited benefit since the average standard of living increase for participants was only 5 percent. Surely these guys must understand that five percent higher than just barely getting by is a pretty big difference in quality of life? Another economist warned that since all of these micro-loans were secured without credit, there is a risk that they wouldn’t be paid back. In fact, the Grameen bank has a 98.8% repayment ration. Pretty good for a system that runs in complete opposition to the industrial worlds banking!

I also thought that the Nobel committee’s’ politics (there’s always politics) were curiously in line with Bill Clinton’s current philosophical drive. He’s been criss-crossing the lecture circuit reminding people that security is best achieved buy buying someone a sewing machine and increasing their standard of living rather than waiting till a society has broken down and then spending a thousand times more with military pressure. To me it seems no accident that Yunus was given the Peace Prize rather than the Economics Prize. It is a pretty big advertisement for the Clinton school of security.

For the other 2006 Nobel winners, go here.

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One Response to Nobel Prize Grameen Bank

  1. The size of the loans is the entire reason that this system works so well. These people aren’t playing the stock market. They are buying a dozen chickens, or setting up a produce stand in the local market place. Unless your chickens get sick and die in the first few months, you should have no problem getting back in the black. I expect culture helps as well. Without companies breathing down your neck constantly, urging you to spend way more than you need to every moment, there may just be a bit more of a sense that perhaps the loan really should be paid off before buying the next titanium case for your cellular phone.

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