Rural institutional credit has not yet reached many small borrowers in India, and the time has come to bring about a legislation for setting up banks for the poor, where credit is provided without collateral security, says Nobel laureate and founder of Grameena Bank Muhammad Yunus.
In between obliging for photographs with the delegates and signing on the cover pages of his new book, ‘A World of Three Zeroes - The New Economics of Zero Poverty, Zero Unemployment and Zero Net Carbon Emissions,’ Prof. Yunus took time for a quick chat on the current economic models and their failure to address the problems of poverty.
“Banks have become super tankers with a huge cargo providing credit to the rich, while micro credit institutions are like dingy boats enduring the rickety rides and economic upheavals. It is time to bring in a legislation for setting up rural banks for the poor, where small and micro credit is disbursed in a hassle-free manner,” Prof. Yunus told The Hindu on the sidelines of the centenary conference of the Indian Economic Association (IEA) under way at Acharya Nagarjuna University on Thursday.
Prof. Yunus, who is credited for inventing micro credit and social business models that had brought about a massive change in rural Bangladesh, said that social business could act as a remedy for many impacts of poverty.
Charity
“Charity is one way of doing things, as you put money in the system and it never comes back. I think social business is the only answer as money put in creates solutions. After establishing Grameena Bank, I set up financially sustainable projects and enterprises to address the problems faced by the poor. We started selling vegetable seed as a way to address the issues of malnutrition and night blindness. Each family is given vegetable seed packets. Loans were given to the poor to build latrines. I started companies to provide renewable energy to the poor households, and bring health care and IT within the reach of the rural poor,’ he said.
