The Nobel committee has made some dubious choices for its literature and peace prizes, but in selecting Muhammad Yunus and his Grameen Bank for the peace prize this year, it could not have done better. Yunus should be a hero to every political persuasion. He has helped countless poor people make better lives for themselves, and he has done so through non-violent, non-confiscatory means. He doesn’t take from the rich; he enables people to make themselves rich (or, at least, comparatively so). Perhaps most important, his microcredit endeavors underscore the crucial lesson that economics is not a zero-sum game; asking about the causes of poverty is to misunderstand everything important about it. Poverty isn’t caused; it exists ab initio, without volition on anyone’s part. The proper question is, “What are the causes of wealth?“ Yunus’ answer: A few seeds and a lot of sweat.

Mr. Lipton, thank you for the information. I did not realize how complex and comprehensive the program was. The additional support systems are well worth the cost, as without them, many would be doomed to fail, with only monetary support. Congradulations on a program that everone, regardless of political affiliation, can get behind, trust and believe in. The good it does is immeasurable and should be expanded into every country in the world. You personify hope for the despairing millions. Here’s hoping that the Nobel Peace Prize, richly deserved, will boost your efforts.

Margie - here’s some information on microfinance interest rates.  More available in our <a href =“http://www.grameenfoundation.org/what_we_do/microfinance_in_action/faqs/#11”>Microfinance FAQs</a>.

Like other financial institutions, microfinance institutions (MFIs) charge interest for the loans they make to their clients. The interest covers the high cost of making very small loans and personally servicing each client every week. It also covers the cost of managing the “center meetings”; the peer support group process; and providing information on social services, personal development, health and other critical information that helps clients improve their lives and the future of their families. Their rates are also affected by the rates MFIs themselves pay for borrowing the funds that they in turn lend to their clients. MFI interest rates can range from 15 to 35 percent, depending on the conditions in each MFI’s service area. Without microfinance programs, the only alternative for very poor people is often borrowing from local “money lenders,” who regularly charge between 120 and 300 percent.

P.S. Is 20% interest really necessary to continue the program, which sounds like the best I’ve ever heard, when repayment is 98.5%? Why should poor people pay far higher interest rates than the rich when defaulting on a loan is not an issue? I would be interested in hearing the logic behind this.

Sorry, to complete the sentence: Just how practical would such a program be in this country? It wouldn’t, without a great deal of capital.

It’s just a rationalization to say that unfair wages, unjust treatment of employees,( cancelling retirement benefits after years of loyal work, cutting health benefits that were promised when you were hired,ect.) are in no way responsible for poverty! It’s unrealistic to imply that everyone could be successful if they would just try. Would that it were so easy. We could just mandate a college education for everyone, rich or poor and then we could all be wealthy! Nevertheless, those floors would still have to be mopped, someone would still have to make sure your eggs are over-light at Waffle House. And those workers would continue to be under-valued and under-paid, forever and ever, Amen! Not to detract from a wonderful program that really helps people, but

Thanks for posting this excellent news.  At Grameen Foundation, were working to spread the Grameen Bank microfinance model around the world.  For those new to microfinance: Learn more about microfinance and our worldwide programs.  For more details on the Grameen Bank, Muhammad Yunus has published the very useful Grameen Bank at a Glance.

Excellent point - if you want to deal with poverty, rather than studying how people become poor, study how people become wealthy - or at least self-sufficient.  Rather than teach people how not to be poor, teach them how to become financially stable.

If you want to get in better physical condition, do you study illness?  No, you study diet and exercise and physical fitness.  Same idea.

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