Nobel Prize winner discusses work in microcredit
Lucy Lynch | Friday, April 13, 2018
Muhammad Yunus, the 2006 Nobel Peace Prize winner, spoke at the 2017-2018 Notre Dame Going Global Forum on Thursday night, addressing his work in social business. Yunus, who has been a pioneer in the realms of human development and microcredit, was named as this year’s recipient of the Ford Family Notre Dame Award for International Development and Solidarity.
Prior to the presentation of the Ford Family Award, University President John Jenkins praised Yunus not only for his work in microcredit and microsavings, but also for his interest in social entrepreneurship.
“Professor Yunus teaches us that a new way of doing business is possible,” Jenkins said. “One that leaves room for selflessness, for social concern and mutual responsibility. Economic development must not come at the expense of human dignity.”
Ray Offenheiser, director of the Notre Dame Initiative for Global Development in the Keough School of Global Affairs, led the conversation with Yunus.
Yunus discussed how his upbringing in Bangladesh exposed him to the economic and social issues he has fought to change throughout his life. Yunus said he saw how banks and the wealth distribution did not enable poor people to prosper.
“What good is economics if it doesn’t solve the problems of the people around them,” Yunus said.
Yunus felt overtaken by the concept of loansharking and the poor people who were victimized by the act, so he decided loan small amounts of money to these people himself in the form of a microloan.
There are some academics who are skeptical of microfinance, Offenheiser said. However, Yunus said the system is very effective — the microloans are always eventually paid back by the borrowers.
“The bank is owned by the borrowers themselves,” Yunus said. “This is the most well-managed bank in the whole country [of Bangladesh].”
Despite Yunus’ development in microcredit, there is a “right” and “wrong” type of way to conduct this business, he said. Yunus warned against those who have taken his practices and ultimately used it for loansharking.
“Economic services are like oxygen,” Yunus said. “If we don’t have oxygen, we cannot breathe, we cannot function. That’s what happens when we don’t have financial services. If you don’t have connection to the financial services, people cannot function. And then we call them poor people.”
Yunus encouraged people to change the wealth distribution system. In order to aid human development, he said, it is necessary to make sure that wealth flows downward rather than upward.