Spotlight

 
The financial innovator who revolutionized lending in developing countries is bringing his concept to America, said Daniel Pimlott in the Financial Times. Muhammad Yunus, who won a Nobel Peace Prize for pioneering the use of “microloans,” has opened a branch of his Bangladesh-based Grameen Bank in New York City. Microloans are small, short-term loans of $200 to $1,500 to poor people without access to financial institutions. The model has been exported to more than 40 countries, but the U.S. is the first developed country to try the experiment. Yunus considers the U.S. a prime market because “as many as 28 million people, earning $510 billion a year, do not have a relationship with a financial institution.” They rely instead on “fringe banking services such as check cashers, pawnshops, and payday lenders” which charge interest as high as 1,560 percent a week. Yunus charges about 16 percent. “In just over a month Grameen has lent out more than $50,000 to 35 women” in the U.S., for enterprises such as hair salons and nail parlors. “If it makes an impact in the USA,” Yunus said, “then the whole world will come around.”