Bank on peace

By awarding this year8217;s Nobel Peace Prize to Bangladesh8217;s Muhammad Yunus and the Grameen Bank, the prize committee has attempted a new definition of what constitutes 8216;peace8217;. Yunus has brought banking to some of the poorest people in one of the poorest nations of the world. This in itself is cause enough for celebration. The committee has observed that lasting peace cannot be achieved unless large groups of people find ways to escape their disempowered condition and are beneficiaries of democracy and human rights.

The Grameen movement has small, poor borrowers and lenders who would not have been seen to be credit-worthy by traditional finance companies. Lack of collateral would have kept them in deep poverty, or pushed them into the clutches of moneylenders. As an alternative system of credit, the Grameen Bank has been able to provide a lifeline to millions, especially to women in rural Bangladesh. There have been questions raised, of course, about the use to which such credit was put. Did these loans actually help to empower women and reduce social inequalities? Today, as the Grameen family has grown into something no less than a large corporate, with businesses spanning IT, telecom, internet services, education and telephony, there are rumbles of protest from the emerging corporate sector which does not get the same treatment as the non-profit sector. Are Bangladesh8217;s corporate NGOs, like the Grameen Bank, then a viable and sustainable alternative to profit-making firms or are they riding a wave funded by aid organisations and supported by tax breaks? Also, while Yunus8217;s model may succeed in a small country like Bangladesh, the scale of the aid and tax breaks required to make it work in a large country like India could pose very difficult challenges.

These questions and conundrums do not, however, detract from the power of the idea Muhammad Yunus had. The Nobel could be an occasion to rework some of the details.