Think bankers are evil? Muhammad Yunus, the only banker to win the Nobel Peace Prize (and one of the few to have Bono and Peter Gabriel on speed dial), will make you think again. The pioneer of microcredit has been lending small sums of cash to the poor since the mid-70s through his bank Grameen, allowing thousands of small businesses to thrive and fueling an economic surge in his native Bangladesh.
On Monday, Grameen opened a branch in upper Manhattan, the third branch of the bank’s upstart US venture, Grameen America, which already counts locations in Brooklyn and Omaha and hopes to open in San Francisco and Washington D.C. by the end of the year.
Yunus, 69, spoke at an event celebrating the grand opening on Monday. “New York City is the world capital of banking. They do the banking for the whole world, but they don’t do the banking for their neighbors, and we’re here to show there’s nothing wrong with doing banking with neighbors.”
The neighbors Yunus spoke of are the city’s small business owners — those selling flowers on the street, the newspaper vendors and fruit cart attendants whom Wall Street businessmen pass daily on their way to work, and largely disregard as legitimate business partners.
So, how does Grameen America work? Pretty much just like any other bank, except at nonprofit margins. Grameen America lends first-time loans of $1,500 or less to small business owners, many of whom live under the poverty line, and asks for 15 percent interest on what’s not immediately paid back.
ABC News spoke with one of Grameen America’s satisfied customers. Rosa Lopez, a mother of two from the Dominican Republic who sells jewelry and hair accessories in upper Manhattan, is on her second Grameen America loan after paying back her initial $1,500 debt. “I used to borrow money from money lenders or other people and the interest I had to pay meant I didn’t see much profit,” she said through a translator. “Now I see a profit.”
Lopez is one of more than 300 borrowers already doing business at the Manhattan branch and one of 2,800 mostly female borrowers across America who have been loaned over $6 million since Grameen America was founded in 2006 — the same year Yunus won the Nobel. More than 99 percent of Grameen America’s debtors repay their loans, says Yunus. Add up the numbers, and you’ve got success.
“What we are doing is something rock solid,” Yunus said on Monday. “It will not shake, it will not collapse, it will not melt away. It will be part of a bigger banking system.”
Photo by the World Economic Forum via Wikimedia Commons.
