UNF board member Mohammed Yunus and his Grameen Bank won the Nobel Peace Prize today. In the 1970’s Yunus pioneered the use of micro-loans to give rural entrepreneurs in the developing world start-up capitol needed for their small businesses. These loans typically range around $200, and are overwhelmingly directed toward women in the developing world who need funds to buy basic equipment or materials to get their small business off the ground. Fascinatingly, the Grameen Bank, which was founded in Bangladesh, claims a rate of return of over 90%. Yunus is an economist, and the idea that he pioneered over 20 years ago has become an established part of development strategies worldwide. Micro-lending is not philanthropy, but a win-win-win investment strategy in which the creditor earns some interest, the recipient receives her capitol, and the community benefits from the new business.
The benefits from micro-lending continue to pay dividends to diverse sectors of people worldwide. For example, philanthropists have begun to use the idea to expand the reach of their philanthropy. Last year, Ebay Founder Pierre Omidyar donated $500 million to start a micro-lending bank, of which the proceeds from the interest earned will go to Tufts University.
Yunus has well earned this honor, and deserves our congratulations and thanks.