The lack of micro-credit laws in many African countries is denying millions of the continentâ€™s poor access to loans, a Nobel Prize winner Mohammad Yunus, has said. Yunus, who won a Nobel Prize in 2006 for championing tiny loans to the poor in Bangladesh, is now pioneering an idea he calls â€œsocial businessâ€ as a way to fight poverty around the world — business not for profit but to solve social problems.
â€œTo create a new kind of bank, which works with the poor people, we need new legislation. In most of the countries in Africa that legislation has not taken place, we have left micro-credit scenario to the NGOs,â€ Yunus told Reuters in an interview.Â Nicknamed the â€œbanker to the poor,â€ Yunus started his movement 30 years ago with a 27 dollars loan to women in Chittagong, Bangladesh.
It has mushroomed and delivered millions of tiny loans to poor people who do not have access to mainstream banking. â€œPeople are ready in Africa, there is no problem with the people; itâ€™s a question of institutional and conceptual arrangement and micro-credit could be wonderful social business,â€ he said.
Yunus is attending an annual micro-credit summit in Kenya, where Africaâ€™s micro-finance institutions hope to emulate the success and growth of the industry in Asia, which hosts more than 80 per cent of the worldâ€™s 150 million micro-finance beneficiaries.
â€œAfrican women are very active compared to women anywhere in the world and micro credits have the best chance of succeeding in Africa particularly with women, but the financing is never brought to them,â€ he said. Most African governments are still heavily dependent on donor aid from the West and some micro-finance institutions are run by NGOâ€™s.
Yunus warned against continued channeling of donor aid through governments. Since you focus aid through the government, it encourages bureaucracy, it encourages corruption, it encourages inefficiency and we still have the African and Asian development banks doing the same repetitive thing,â€ said Yunus.
Since winning the Nobel Peace Prize in 2006 jointly with Grameen Bank, the micro-credit organisation he founded, he has committed his portion of the $1 million prize money to developing social businesses and is trying to change the way the world views helping the poor. He said the global financial crisis that hit western economies hardest, showed that the world needed to embrace social business as well.
â€œLetâ€™s make it two models, profit maximising business and also social business, business to change the world. If we donâ€™t redesign the global economy, we risk to fall in that trap again,â€ he said