Yunus questions traditional banking model, cites its recent failure

Microfinance Focus, Dec. 10, 2009: Poverty is not created by the poor nor is it an inherent character of any society which can be removed with a viable and effective banking model, said Bangladesh Nobel Laureate Mohammad Yunus.
Delivering the second Hiren Mukherjee memorial lecture in the Central Hall of Parliament here on Wednesday evening, Yunus said: “Poverty has not been created by poor people, but by the systems and institutions made by certain privileged and monopolised strata of society.”
Poverty is an artificial external imposition on a human being and since it is external, it can be removed, he insisted.
Tracing his micro-finance movement to the famine in Bangladesh in 1974, Yunus said that within a generation, the little money lent mostly to women changed the way people lived. “While big conventional banks with all their collateral were collapsing, microcredit programmes, which do not depend on collateral, continued to be as strong as ever,” said Yunus, managing director of Bangladesh’s pioneering Grameen Bank.
“Poverty has been created by the deficiencies in institutions that we have built, for example, financial institutions. Financial institutions refuse to provide financial services to merely two third of this population. For generations they claim that it could not be done and everybody accepted that. Grameen Bank questioned this assumption and demonstrated that lending money to the poorest in a sustainable way is  possible,” he said.
Vice President Hamid Ansari, Prime Minister Manmohan Singh also addressed the function. Governors, chief ministers, presiding officers of state legislatures, MPs and others attended the lecture.Parliament instituted the annual lecture series in the memory of Professor Hiren Mukherjee – an eminent communist parliamentarian of India. The inaugural lecture was delivered by Nobel laureate Amartya Sen on August 11, 2008.

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