Existing banking norms not for poor, says Yunus

Mansi Kapur / TNN / Feb 4, 2007, 23:19 IST

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Muhammed Yunus is not necessary. There is need for specific micro credit legislation.

Existing banking norms not for poor, says Yunus

Q: What does the Nobel Prize mean to you?
A: It's important. It gets you lot of recognition and people pay attention to what you were trying to say all these years.
Q: Is a Muhammed Yunus missing in India?
A: A Muhammed Yunus is not necessary. There is need for specific micro credit legislation. If Grameen Bank was not a legal entity dedicated to lending money to the poor, no matter what we did, we would be counting in only hundred thousands, not millions.

Q: Do the existing laws help?
A: The existing law was created for super tankers ocean going vessels which work differently. I'm talking about a dinghy boat. Create one specialised bank in one state, if it works then allow more states to follow. The boats do require a new regulatory body.
Q: How would you deal with farmer suicides?
A: It is not their fault; it is the fault of the system. Poor people always face situations where things don't go right. One explanation I have heard is that it is a collateral issue. We don't follow that system. If there has been a drought or a natural calamity and farmers neither have their crop nor money to start afresh, we give them new loans.

We change their old laons into a long-term payment. At Grameen, if you have borrowed Rs 1,000, even with accumulated interest, the maximum you'll have to pay is Rs 2,000. You can take 20 years, it'll never be Rs 10,000.
Q: Do you think profit-driven FDI would remove the essence of micro credit?
A: Micro credit can either be run as a social business, which is to do good for people without making profit, or as a profit making business. We call the second one as moneylenders. One can make profit but not for himself. This profit can be ploughed back into the system.
Q: If you had to do this all over again, what would you do?
A: It would basically be the same, with a little difference. Six years after we began, we started taking international money. Since 1995, we've been on our own.We could have removed the impression that you need external money to run such a programme. There's enough money available to help local poor people.
Q: What is the model?
A: You design your own or combine what you already know with it. Important question is whether you are delivering it to poor people. If you lose you are creating trouble for others also. Start somewhere, as long it works. People are waiting to find the best answer which is always elusive. You can only chase it and in the process you go ahead and make a difference.

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