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Nobel Prize for the ‘Banker of the Poor’ hailed as anti-poverty boost

The award of the 2006 Nobel Peace Prize to Bangladesh economist Muhammad Yunus and his Grameen Bank for pioneering small loans to poor people to set up in business has been hailed as a major boost for what is now called microfinance.

"Muhammad Yunus gave a new perspective for life to the 1.1 billion people that live on less than a dollar a day," said Tor G. Gull, managing director of Oikocredit, an international church-supported microfinance institution based in The Netherlands. "Some 450 million of them have already been reached with small loans that help to build up their own sources of income and many more are yet to come."

Sixty-six-year-old Yunus has been nicknamed a "Banker to the Poor" for setting up his Grameen Bank in 1976. This gave small loans known as microcredit to the very poorest in Bangladesh, particularly women, enabling them to start up small businesses.

Since then, the bank has been a source of ideas and models for the many institutions in the field of microcredit that have sprung up around the world, the Norwegian Nobel Committee noted in its citation announcing the award on 13 October.

"Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Microcredit is one such means," it stated.

Yunus’s initiative also spawned the development of microfinance, the supply not only of loans but of other financial services to low-income households and groups.

"Microfinance helps people in developing countries to have access to credit and banking services they would never get in the commercial world. It has been proved that it can help get people out of poverty," Karima Wardak of Oikocredit told Ecumenical News International.

The Grameen Bank is a member of the International Share Foundation of Oikocredit, originally set up as the Ecumenical Development Cooperative Society in 1975 by the Geneva-based World Council of Churches to offer a socially-just means of investment.

"Many years ago, both Oikocredit and my Grameen Bank started with the big hope that we could reach out to many poor people with tiny loans," Yunus said in a statement released by Oikocredit. "And we managed to do so."

(c) Ecumenical News International