Banker gains Peace Prize.Oslo -- The Nobel awards committee has awarded the 2006 Peace Prize to a Bangladeshi economist, Muhammed Yunnus, who founded the Grameen Bank Grameen Bank: see Yunus, Muhammad. Grameen Bank Bank in Bangladesh, the first bank to specialize in small loans for poor individuals. Originated by economist Muhammad Yunus, the Grameen banking model is based on groups of five prospective borrowers in 1983. He pioneered the idea of microcredit microcredit, the extension to poor individuals of small loans to be used for income-generating activities that will improve the borrowers' living standards. The loans, which may be as little as $20 for very poor borrowers in some developing countries, typically are , lending out small sums to poor people, a majority of whom were women, so they could buy supplies and equipment to set themselves up in their own businesses. Though criticized for the high rate of interest charged (20%), Grameen awards loans without collateral and with flexible repayment schedules. The average loan is about $200 and the bank has millions of customers who no longer have to rely on loan sharks A person who lends money in exchange for its repayment at an interest rate that exceeds the percentage approved by law and who uses intimidating methods or threats of force in order to obtain repayment. In most jurisdictions Usury laws regulate the charging of interest rates. . Today it is the largest rural bank in Bangladesh, with a repayment record of 98%. It is credited with helping many Bangladeshis escape the poverty trap poverty trap Noun the situation of being unable to raise one's living standard because any extra income would result in state benefits being reduced or withdrawn Noun 1. . "Poverty alleviation is peace" is Yunnus' watchword (Nat. Post, Globe, Oct. 14, 2006). |
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