Citzen bankers and Peace Prizes

Condy over at the State Gov had this to say about Muhammad Yunus winning the Nobel Peace Prize:

Statement on Nobel Peace Prize Recipients Muhammad Yunus and the Grameen Bank

Secretary Condoleezza Rice Washington, DC October 13, 2006

I wish to extend my warmest congratulations to the 2006 Nobel Peace Prize recipients from Bangladesh, Dr. Muhammad Yunus and the Grameen Bank. With the aim of “creating social and economic development from below,” Dr. Yunus and the Grameen Bank he founded have done extraordinary work in promoting microcredit lending in South Asia. By extending more than 6.6 million small loans to individuals from the least privileged segments of South Asian society–and a vast majority of them women–Dr. Yunus has empowered millions through access to finance to improve their own lives.

I congratulate the Nobel Peace Prize Committee on an excellent choice for this year’s Laureate, to whom we also send our warmest appreciation for his outstanding work on behalf of world’s impoverished.


I am intrigued by that final figure (did they know on the 29th Sep when the rest of the world didn’t find out til Oct 13? Or did Ms Rice hand out 929 congratulations this year?)

Tidak apa apa (doesn’t matter), I want to talk about Crikey’s email yesterday. Which I pay for and you don’t (go subscribe!) so I’m just going to quote the paragraph about the Nobel prize thingie. And besides, the journo who wrote it, Guy Rundle is in London and he wont’ find out I nicked it if you dont’ tell him. Right?

With microcredit pioneer Muhammad Yunus winning the Nobel Peace Prize you’d think we’d got someone who everyone can feel good about. Practical, non-doctrinaire, solving a problem and changing the world, right?

Wrong, according to Australia’s favourite grinch economist, Helen Hughes, who thinks the whole practice of microcredit is a communist plot.

In an interview with the CIS’s Greg Lindsay in 2000, Hughes noted that microfinance’s advocates believe it “‘empowers’ poor people by giving them, following Marx, access to “the means of production”. Microfinance loans are made to members of groups chosen by lot. All borrowers have to contribute savings, but wait to take out loans until the initial borrowers’ loans are repaid. Microfinance is the very antithesis of the market system”.

Don’t you love the Marx bit? Actually all loans give access to the means of production. We call this “capital” and I can send Hughes some leaflets on it if she’s confused.

The rest of Hughes’s observations are simply wrong. As Yunus has observed, microcredit via the Grameen bank has a lower rate of bad debt than standard lenders.

What Hughes hates is the collective nature of the process – the way it uses trust and social connection, rather than collateral, to guarantee repayment.

She finishes by observing that the collective process places limits on people and that the most entrepreneurial may be penalised, because:

“….he or she may never get a loan”

Right. Because Citibank is just queueing up to lend to your average Bangladeshi.

Hughes was part of the international finance machine during the years when it impoverished vast tracts of the planet. I wonder if she’ll now admit that she was wrong and the Nobel committee was right?

I bolded the super duper important bit. In July I wrote about Citizen banking here. Ben Barren of gnoos.com.au at WD06 mentioned Prosper.
Here’s the original article by Richard Burnett Loan deals are being found through online auctions. You’re not silly – you are seeing where this is going. 1. It’s not just media that are facing the Web 2.0 squeeze, other industries will be affected almightily as well. Including “secure” institutions such as banks. Don’t believe me? Ask Dymocks or Borders if they felt threatened by Web 1.0 until Amazon opened their non-storefront doors. 2. It’s not just Bangladeshis benefitting from a grassroots collective banking. It’s also people in Orlando, Florida (according to the article) and London, Uk (zopa.com) And, remember when I quoted Schwartz from Sun Microsystems off hand comment about eBay maybe becoming a bank? Hmmm. Let’s see: Nobel Prizes, grassroots movement, Prosper, Zopa, Web 2.0 – methinks a large company will jump on this. Betcha 1,000 bucks. Borrowed of course!

Laurel Papworth

Named by Forbes™ Magazine in the Top 50 Social Media Influencers globally, named Head of Industry, Social Media (Marketing Magazine™) and in the Power150 Media bloggers (AdAge™). CERT IV Training and Assessment certified trainer (Diplomas and Certificates etc) Adult Education. Laurel has manager Facebook Pages for Junior Masterchef, Idol, Big Brother etc. and have consulted on private online communities for banks Westpac, not for profits UNHCR & governments in SE Asia. Lecturer, social media, University of Sydney for 10 years and Laurel has 11,000 online students. Laurel Papworth personally connects to 6 million followers online and has taught around 100,000 people in the last 10 years how to be social media managers.

2 thoughts on “Citzen bankers and Peace Prizes

  1. Is it not extraordinary how much some people hate bottom up, simple, inspiring, world changing ideas?

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