Bank that lends to the poor!

Those who can, do; those who can't,  teach. An old maxim-but one that
does not account for the likes of  Muhammad Yunus, a Bangladeshi
profes sor whose achievements are the stuff of  lore among
development economists.

Yunus is the founder of Grameen Bank,  a Bangladeshi credit
organisation that has  pioneered lending to the rural poor and  in the
process stood normal banking con ventions on their head.

The customers of Grameen (whose  name means rural in Bengali) are
almost  exclusively those who have no collateral to  offer against their
loans. Yet defaults are so  low its repayment rates would be the envy  of
most mainstream lenders. "Compared  to Grameen Bank," says Yunus,
"other  banks look like charity outfits for the rich."

Two other things are immediately strik ing about Grameen. First, the
vast majority  of its customers are women--a fact not  unconnected with
the low number of de faults--and, second, its vision extends be yond
mere finance. Grameen is perhaps  the only bank in the world that
encourages  birth control, sanitation and a clean envi ronment as part of
its lending policy.

As a pioneer in the growing field of  "micro-lending," Grameen has
shown that  the rural poor --even in a country virtually synonymous
with deprivation--can  make productive use of credit. To many,  this
approach is a more effective antidote  to poverty than traditional
giveaways.

The bank's success since it was set up in  1983 has spawned Grameen-
type institu tions in 30 countries. A group of seven US  Congressmen
recently urged President Bill  Clinton to make micro-enterprise
develop ment efforts, modelled specifically on  Grameen, the
"hallmark" of his foreign-aid  programme. Yunus already has the admi
ration of Clinton, who once met Yunus in  Washington and deems him
worthy of a  Nobel prize.

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