Mohammed Yunus, a 2006 Nobel Prize winner for championing microcredit and the founder of Grameen Bank, a microfinance institution (MFI) located in Bangladesh, recently was reported to have said that the dearth of microcredit laws in many African countries is preventing access to loans for millions of the continent’s poor people.

“To create a new kind of bank, which works with the poor people, we need new legislation, but in most of the countries in Africa that legislation has not taken place, so we have left microcredit scenario to the NGOs [non-governmental organizations],” Professor Yunus said in an interview. Professor Yunus lamented the fact that most African governments continue to be heavily dependent on donor aid from the West and that some MFIs are run by NGOs. “Since you focus aid through the government, it encourages bureaucracy, it encourages corruption, it encourages inefficiency,” said Professor Yunus.

These comments were made in an interview with Reuters, ahead of the 2010 Africa/Middle East Regional Microcredit Summit taking place in Kenya that Professor Yunus is attending.

By: Christine Chang, Research Associate

About Grameen Bank:

Grameen Bank is a Bangladeshi microfinance institution that provides collateral-free loans to poor entrepreneurs in rural areas. It was founded in the late 1970′s by Mohammed Yunus, who, along with Grameen Bank, won the 2006 Nobel Peace Prize for their work in developing the concept of microfinance. As of February 2010, it reports 8 million borrowers, 97 percent of whom are women. With 2,563 branches, Grameen Bank provides services to 81,343 villages. Grameen Bank has the equivalent of USD 1.2 billion in assets.

Additional Resources:

Reuters Africa: Africa’s banking laws shut out the poor: Yunus, April 6, 2010: http://af.reuters.com/article/topNews/idAFJOE6350AO20100406

MicroCapital Universe: Grameen Bank: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Bank

MICROFINANCE EVENT: 2010 Africa/Middle East Regional Microcredit Summit (AMERMS) on April 7-10, 2010 in Nairobi, Kenya: http://www.microcapital.org/microfinance-event-2010-africamiddle-east-regional-microcredit-summit-amerms-on-april-7-10-2010-in-nairobi-kenya/

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