I interviewed the founder of Grameen Bank Muhammad Yunus recently and asked him about the current financial crisis gripping the US and the world. He laughed and said that Grameen Bank’s portfolio of micro-loans to poor people in Bangledesh and elsewhere was more solid than the portfolios of the big American banks full of falling subprime financial products and option ARMs.
“Our loans are real, they are transparent and they are being paid back by the people,” said the Nobel Prize Winner. “You can’t say that about the states.”
There is an important point here. Every since Yunus started the micro-finance movement, criticism has existed on the financial soundness of the system. Do poor people pay back on time and do banks make a profit? Well, compared to commercial banking practices, the efforts of Grameen and other micro-finance banks look very good today.
Maybe Grameen Bank should buy the weakened Wachovia Bank. Hmmm…. Maybe not.
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