Johannesburg - The world's conventional banks have lost a
trillion dollars since the onset of the financial crisis, yet they
still do not favour lending to the poor, Nobel laureate Muhammad
Yunus said on Saturday.
The former Bangladeshi Grameen Bank founder and economist who
developed the concept of microcredit and won the Nobel Peace Prize in
2006, made the comments in delivering the Nelson Mandela Annual
Lecture in South Africa.
'I had to create Grameen Bank because the conventional banks
refused to lend to the poor, this is the same for conventional
banks the world over,' Yunus said.
'They do not mind writing off a trillion dollars in a sub-prime
crisis, but they still do not lend 100 US dollars to a poor woman
despite the fact such loans have near a 100 per cent repayment record
globally,' he added.
Conventional banks complained that the poor were not credit
worthy, but the real question was 'whether banks are people worthy,'
he said.
There were no legal instruments between lender and borrower, no
guarantees, no collateral at the locally-based Grameen Bank that had
no link with international banks and therefore no risk of being
caught up in crisis, he explained.
'And yet our money comes back while the prestigious banks all over
the world that went down had all their intelligent paperwork, all
their collateral, all the lawyers and legal systems to back up their
lending.'
'The banks that are collapsing were based on chasing papers. It
was a race to create a fantasy world of papers. And when something
went wrong, the whole thing collapsed.'
USA
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