Even though the Nobel Commitee gives awards to terrorists like Yasser Arafat, war criminals like Henry Kissinger and writers like Harold Pinter who is more famous for his anti-American rants, once in a while they give it to someone deserving like Mohammed Yunus.
“Every single individual on earth has both the potential and the right to live a decent life,” the Norwegian Nobel Committee said. “Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.”
“Eradication of poverty can give you real peace,” the 66-year-old Mr. Yunus told reporters in the Bangladeshi capital, Dhaka, according to Reuters. “Now the war against poverty will be further intensified across the world.”
Mr. Yunus, who has a Ph.D. in economics from Vanderbilt University, has said he was inspired to start Grameen by a chance meeting with a poor woman in 1974. She made bamboo stools for a living, but had to borrow money at rates as high as 10% a week to purchase materials. The exorbitant interest left her with the tiniest of profits.
Mr. Yunus, according to his autobiography, dipped into his own pocket and lent a group of 42 basket weavers the equivalent of $27. Even that small amount improved living standards. Equally importantly, he has said, the women repaid the loans.[Microloan’ Father Yunus Is Awarded Nobel Peace Prize]
Microfinance has now led to the idea of Microinsurance which is like life and disability coverage for low-income people in emerging markets to protect the family if the bread winner dies or falls sick.
Bajaj Allianz, an Allianz Indian joint venture, offered its first microinsurance product in the subcontinent in 2003. In August Allianz said its Indonesian unit started a microinsurance pilot project. The aim is to design and sell a product that will cover the outstanding balance of a loan in the event that the person who took out the loan dies. The policy would also pay the loan taker’s family double the loan amount.
Nonetheless, charitable groups such as the Bill & Melinda Gates Foundation, the Aga Khan Foundation USA, the Munich Re Foundation, and ACCION International are also pushing microinsurance. They see it as a complement to microfinance loans, something that can increase financial sophistication in far-flung places, while protecting people who are vulnerable from ruin when breadwinners get sick or die.[Out of ‘Microfinance’ Work Springs Insuring Loans for Impoverished]