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Poor people in developing nations have difficulty getting loans because they normally have no collateral, and if they have access to finance, their interest rates are very high. Most banks are only prepared to offer substantial loans, which is often more money than the people need. They virtually have no access to credit and if they have money, they are not going to reinvest to secure investment, but to purchase food and alcohol.

2. Why did Muhammad Yunus develop his microfinance system?

Muhammad Yunus developed his microfinance system to turn a “vicious circle to low income, low saving and low investment” into “a virtuous circle of low income, injection of credit, investment, more income, more savings, more investment, and more income”. In other words, to help widen his nation’s economic base and promote the kind of growth that leads to real increases in living standards. Expressing that every strong, well balanced economy is based upon thousands of very small businesses that form the underbelly of a notion’s social and economic life. Loans to poor people without any financial security had appeared to be an impossible idea. Microcredit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy cannot achieve their full potential unless the female half of humanity participates on an equal footing with the male.

3. Do you think his goals for the credit program can be achieved?

Yunus’ goals can be achieved because he has shown that even the poorest of the poor can work to bring about their own development. Yunus’ long-term vision is to eliminate poverty in the world. If new micro-finance banks continue to grow, they will be able to provide far more funding to more people in every nation. Microcredit is gaining momentum in mainstream finance as traditional finance...