Micro-credit programmes beat global meltdown: Muhammad Yunus

Microcredit programmes were able to weather the global meltdown as compared to the big conventional banks that were on the verge of collapse, Nobel laureate and noted economist Muhammad Yunus said here Wednesday.

"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.

"Will this demonstration make the mainstream financial institutions change their minds? Will they finally open their doors to the poor?," he asked while delivering the second Professor Hiren Mukerjee Memorial Annual Parliamentary Memorial Lecture in the Central Hall of Parliament.

"I am quite serious about this question," Yunus said, adding: "When a crisis is at its deepest, it can offer a huge opportunity."

"When things fall apart, that creates the opportunity to redesign, recast, and rebuild. We should not miss this opportunity to redesign our financial institutions. Let's convert them into inclusive institutions."

Yunus said that poverty is created by deficiencies in the institutions that we have built. Pointing fingers at big financial institutions in the world, Yunus said: "They refuse to provide financial services to nearly two-thirds of the world's population. For generations, they claimed that it could not be done, and everybody accepted that explanation."

This allowed loan sharks to thrive all over the world, Yunus said and added that his Grameen Bank in Bangladesh questioned this assumption and demonstrated that lending money to the poorest in a sustainable way was possible.

He said nobody should be refused access to financial services. "Because these services are so vital for self-realisation of people, I strongly feel that credit should be given the status of a human right."

Vice President Hamid Ansari, Prime Minister Manmohan Singh and Lok Sabha Speaker Meira Kumar also addressed the function. Governors, chief ministers, presiding officers of state legislatures, MPs and a large number of other dignitaries 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 Aug 11, 2008.

Last updated on Dec 9^th, 2009 at 21:42 pm IST--IANS