3 december 2008

Muhammad Yunus gives Romanes Lecture

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Muhammad Yunus, Nobel Laureate and pioneer of microcredit, gave this year’s Romanes lecture last night on ‘A poverty-free world: When? How?’.

Yunus, who called himself “a compulsive optimist as far as poverty is concerned”, is one of the world’s leading proponents of economic advancement.

Muhammad Yunus, who gave the 2008 Romanes lecture in the Sheldonian on ‘A poverty-free world: When? How?’.
Nobel Laureate Muhammad Yunus who gave this year's Romanes lecture

Speaking to a packed Sheldonian Theatre of University members and the public, he talked about his vision for a world free from poverty and criticised the “social failings of the existing capitalist system”, with particular reference to the global financial crisis.

'One major institution that needs to be redesigned is the financial institution', said Yunus. 'There is something fundamentally wrong with an institution that leaves out more than half the population of the world, because they are considered not credit-worthy.'

A Bangladeshi banker and economist, Yunus is famous for his successful application of microcredit - the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. He is the founder of Grameen Bank, which provides credit to the poorest people in rural Bangladesh to encourage the growth of very small business. 97% of its borrowers are women, and despite asking for no collateral the bank has a 98% repayment rate.

One major institution that needs to be redesigned is the financial institution. There is something fundamentally wrong with an institution that leaves out more than half the population of the world, because they are considered not credit-worthy.

Nobel Peace Prize winner Muhammad Yunas

In 2006, Yunus and Grameen Bank were jointly awarded the Nobel Peace Prize "for their efforts to create economic and social development from below." Yunus believes that, since credit is the last hope for those with no money, the right to credit should be recognized as a fundamental human right.

'Banks explain that poor people are not credit worthy. But the real question to ask is whether banks are people worthy,' said Yunus in his lecture. 'In the context of the total collapse of the financial system, this question becomes more relevant and urgent. We are still in the midst of the worst financial crisis of the century. In Grameen Bank there are no legal instruments between lender and borrower, no guarantees, no collateral. You can’t get riskier than that, and yet our money comes back while the prestigious banks all over the world are going down with all their intelligent paperwork, all their collateral, all the lawyers and legal systems to back up their lending.'

Yunus called for social business, whose aim is the improvement of lives rather than profit. 'The financial crisis that has gripped the world economy illustrates the social failings of the existing capitalist system', he said.

The Romanes Lecture is an annual public lecture at Oxford University. The first was given in 1892 by William Gladstone. Subsequent speakers have included Theodore Roosevelt, Winston Churchill, Sir Isaiah Berlin, Iris Murdoch, Edward Heath, AJP Taylor, Tony Blair and Sir Paul Nurse.

The full lecture is availble to listen to on iTunesU.