“Finance-in-Society”

Sincere congratulations to Professor Yunus and Grameen Bank of Bangladesh for winning the Nobel Peace Prize. When Professor Yunus started the Grameen Bank as an action research project in 1974, nobody on earth at the time had ever heard of or thought of "lending" to the poor. Before the announcement of this exciting news, my doctoral supervisors and I have actually made an appointment to visit Grameen Headquarters and to meet with Professor Yunus in this December. The Nobel Peace Prize awarded to Yunus and Grameen definitely means more than a micro-credit model which has lifted a few millions of poor people out of poverty, but it also signifies the "recognition" given to an alternative model of banking, which has been largely dominated by the western capitalistic conventional manner in the past centuries.

As an ex-investment banker and financier, I have been working on a "finance-in-society" model for China in the last few years with a hope to lessen the country's wealth disparity and to enhance human sustainability. If we take a closer look at the Grameen Bank, its success is built upon the principles of "integrity", "trust" and "honesty" and the "root" of these principles is the strong embedment of the local Bangladesh rural culture. Or to say, it is both critical and essential to be firmly "rooted" in a local cultural before integrity, trust and honesty are fostered and manifested. There is no legal instrument between the lender and the borrower in the Grameen methodology and this communal-based, peer-monitoring credit model refutes the general perception that the poor people are not credit-worthy.

Out of a total population of around 147,365,352 (July 2006 est.) (CIA -The World Factbook, 17 October 2006), Grameen has extended micro-loans to close to 6 million rural poor from around 60,000 villages. Despite the success and impact made by Grameen, according to the data from CIA – The World Factbook (2006), 45% population of Bangladesh is still living below the poverty line. It may well mean that if taking into account the other sizeable micro-finance institutions such as BRAC (serving over 5 million members) and ASA (serving over 2.7 million active members), there are still tens of millions of the poor in Bangladesh who are due to be taken care of.

Taking China into consideration, the country is estimated to have a total population of 1,313,973, 713 (July 2006 est.) (CIA -The World Factbook, 17 October 2006) and 10% (2001 est.) of this total is living below the poverty line. This implies that over 130 million Chinese are in poverty, almost double the number of poor people in Bangladesh. Having said so, the Chinese Government is trying its best endeavour to build a harmonious society. The methodology of the Grameen Bank is highly valued by the Chinese Government and Professor Yunus had just attended the Grameen International Conference on Microcredit held in Beijing. Nevertheless, although various micro-credit initiatives have been taken place in China since 1994, none of these organizations has been granted legal status from the Chinese Government. These organizations include Grameen Foundation. Moreover, China has not yet established a regulatory body for microfinance and only with such the Chinese people may have the opportunity to truly experiment and benefit from the applicability of micro-credit.

J Therese

Keywords: Mohammad Yunus, Nobel Peace Prize, Grameen Bank, lending to the poor, wealth disparity, human sustainability, rural culture, credit-worthy, micro-loans, poverty, micro-finance institutions, Beijing, China, CIA - The World Factbook, harmonious society, micro-credit.