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Sarid Staff, October 13, 2006

The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development and for lifting millions out of poverty.

Muhammad Yunus was born in 1940 in Chittagong, Bangladesh, as the third of fourteen children. After studying at the Chittagong Collegiate School and Chittagong College, and earning his BA and MA at Dhaka University, he came to the United States, where, in 1969, he got his PhD in economics from Vanderbilt University. Soon after he returened to Bangladhesh, where he joineded Chittagong University as a professor of economics.

When in 1974, during the famine in Bangladesh, he failed to persuade a local bank to give villagers regular credit, he went on to establish a rural economic program, which reached out to the poor and those in severe debt. His first small loan -- known as microcredit -- consisted of $27 from his own pocket, which he lent to local women who made bamboo furniture.

Yunus' Grameen Bank, which means village in the Bengali language, does not require collateral and promotes repayment based on an honor system, which, Yunus notes, encourages social responsibility in the local communities. Interest ranges from zero percent for the poor, 5 percent for student loans, 8 percent for home loans, and 20 percent for businesses that generate income. Today, Grameen has 2,226 branches in 71,371 villages, with more than 6.5 million borrowers, 96% of them women, to whom the Bank has issued more than US$ 5.1 billion so far.

Yunus’ work has been widely recognized and admired. In more than 40 countries from South-East Asia, to South and North America, there are more than 10,000 microfinance institutions operating on the Grameen model. Moreover, Yunus has been sought to serve on and consult for several global development institutions, including the World Bank’s Advisory Council for Sustainable Economic Development and UNESCO’s International Advisory Panel. He has also has won over 50 prestigious international awards, including the 1994 World Food Prize, and has received 22 honorary degrees from universities all over the world.

“Muhammad Yunus,” says the Nobel Committee in their press release, “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. 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. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.”

Yunus, whose long-term vision is to eliminate poverty on the global level, looks at the prize as a great boost in his noble quest. “This award will encourage me further to dedicate myself to improving the lives of the poor," Yunus told the reporters. "It will be a great source of inspiration for me in my days ahead."

(Sarid, October 13, 2006)

The Grameen Bank

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