Yunus calls for legislation on microcredit banks

Feb 2007
Mumbai, India, February, 01 2007 - Grameen Bank founder and Nobel laureate Prof Mohammed Yunus on Thursday made a strong pitch for enactment of a special law by the Indian government for setting up of micro credit banks and its regulation. These banks, essentially to be set up by the private sector, should provide loans to the poorest of the poor at the lowest interest rates possible.

Yunus, who inaugurated the Grameen Trust India's office, told FE that as a beginning the Government of India can implement the law on a pilot basis for one state allowing the formation of such bank on the lines of Grameen Bank and subsequently spread it all over the country after taking into account that state's experience. "Legal framework is like a mould. You need a mould for the growth of micro credit," he noted. Yunus admitted that he was not aware of the exact percentage of poor who have an access to the credit. "If it is just five million of the total one billion population of India then the obvious question comes to my mind is who gets the credit? If 2% gets 98% credit and 98% get 2% credit that means there is a lot to be done to reach out to those poor who have no access to credit. The credit should be available at low cost. India can find out various solutions to this problem including legal and regulatory framework," he added.

Although India is booming, it cannot neglect those who are left without credit availability. He made an obvious reference to the Tata-Corus deal and said, "One side of India is looking up and the other not catching up. Grameen Bank, which lent to 7 million poorest of the poor in Bangladesh, has set the target of reaching out to every household by 2010. On these lines, India should try to reach out to the poorest of the poor," he opined. Yunus praised the self-help group model for providing credit linkage but asserted that it does not cover all poor but other segments also.

Earlier, Yunus inaugurated the Grameen Trust India office. The Grameen Trust India director BN Kulkarni said that office would assist those who need the financial and technical support. Besides, the Mumbai office would also provide a platform to Grameen Trust partners in India for knowledge sharing, networking and exchange of innovations.


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