Loan Adviser

«Not enough to save only banks»

For

developed his system of microcredit to the poor Muhammad Yunus, received three years ago, the Nobel Peace Prize. Today, he criticized the summit goal of «big twenty». In an interview, he expressed views on the globalization and the future of micro-credit.

– Mr. Yunus, the Nobel laureates' life as something different?

– Definitely (smiles). Actually, I have 30 years of telling the same thing about my idea of microcredit. But before people thought that I was crazy. And after I won the Nobel Prize, I have been saying suddenly deemed wise.

– We probably had in mind the practical advantages …

– (smiles again). Their prize also gives? Now I can call anyone in the world, the chairman of the board. Maybe he did not share my opinion. But he will not refuse to listen to me. The Nobel Prize is considered to be «Oscar» for good ideas.

– Financial summit will focus on in the first place. This is the correct question?

– Of course, there is a problem of excessive debt, because credit is too easily granted. This should stop. We must get rid of the greed in this system, transformed the economy of the roulette.

– Easy to say, but how to do it?

– The state should intervene if the market is no longer functioning. Market participants who do not know the framework, must be held accountable. A good step would be a requirement that all should have themselves to acquire the share of those products that disseminate.

– This will require new rules, applicable throughout the world.

– crisis – this one-time opportunity to change things. Save only some of the banks – this is not the solution. In general the structure of global financial summit is wrong.

– Who should have in it?

– It must be presented not only a major industrial state. In the end, it comes to the rescue of individual economies and the world. Real victims of the financial crisis are those who lose their jobs in poor countries, because there is no social safety net. Therefore, should disappear from the market even more participants. Who is now strong in the future will not be able to be so.

– What should be industrialized countries?

– One of the most important points must be the conclusion of the Doha negotiations.

– But is it not acontradiction? You argue that the microcredit sector benefits from separating the world's financial markets. Now you are pro-integration in world trade.

– None. This is no contradiction. It has long been proved that globalization helps poor countries. Otherwise, Bangladesh and today would remain the same as 50 years ago. Otherwise, there would be no development in China. I am not against globalization, but everyone should be able to enjoy their benefits. Completion of the summit in Doha to prevent certain to give a 99% advantage. We need to find compromises.

– But it will not be easy because of the current crisis.

– Of course, some countries will try to close the border. But this is impossible. The solution is a globally integrated system. If we are out of the crisis without reforms, we are faced with more serious problems.

– What is it?

– meeting in London called the world financial summit, but in reality there are a set of simultaneous problems. The crisis of food will not did he go – only in rich countries, none of it has not said. The energy crisis with very high oil prices will return as soon as the recession will be overcome. The situation with the protection of the environment is constantly deteriorating. Very short-sighted to throw all the forces to save the banks and forget about these issues, much more important for future generations. Many are mistaken in the belief that saving the banks and the salvation of the world – this is the same. This is unfortunate, because there are all the necessary technology to achieve the latter.

– But for their implementation need to pay. How does it occur? With your concept of social business?

– We are trying to find a way attractive to companies that provide technology and those who did not have money to pay for them. We must, together with the reasonable commercial interests to find another way of additional business, which focuses not only on profit. It will benefit and concern. For example, when entering new markets. The joint venture with BASF sales of mosquito nets and food additives in Bangladesh is a very important step and may be an example for other corporations.

– But this is a small project.

– It is important that start. All often begins with simple questions. An example is yogurt, which we produce and sell in the framework of social business in Bangladesh with the French concern Danone. I could not get in the sense as to why the mother of his small fund to pay for the package, it can not be used. So I asked Danone, not whether they can produce edible cups. At first I did not take seriously. Now the research department is working on this.

– But the answer to the question you did not have.

– In principle, given. What I have described, it is the dominant principle: members of the board during the meetings are often interested in only the exchange rate of their companies. A BASF in the future will be heard in the question of the contribution to the fight against malaria in Bangladesh was made with the help of the supply of mosquito nets. This will benefit the company. And I say to you: after that you feel better. Sensible business is more fun than just the proliferation of money.

– If it were so easy, why more and more companies abandon the idea of social business?

– N-yes. This is a phenomenon. Perhaps the point is that the idea podkupayusche simple. If I donoshu it to Chairman of the Board, they react with disbelief. If it really is that simple, they think, why is that no one had ever done? So thinks the majority – and so nothing happens. It is therefore important that someone started.

– Your bank Grameen Bank is actively developing. But apparently, the world of microfinance, after the boom came the problem …

– Some of the new company issuing micro-credit, are experiencing problems. Those who borrowed the money in hard currency, to give microloans in weak currencies, are encountering difficulties in their return. Investfondy also not succeeded in this sector – although, for obvious reasons.

– What is it?

– I warned the private investors that the instrument of micro-credit is not a high margin means squeezing more money from the poor. Property respectively, he was supposed to be against the loan sharks in the developing countries – such as Bangladesh to help those who are considered normal banks insolvent. But now under this name, unfortunately, the loan shark swim by calling the percentages of 100 and above.

– What percentage of your Grameen Bank gives loans to start businesses?

– usually under 20%, loans to purchase real estate – by 8%, students – under 5%, under the 0% – the poor – we also give them credit.

– Since as the state has opened a micro-credit as a means of assistance, sound critical voices argue that rates are too low destroy local banks.

– This is indeed the case, I agree with this criticism. If the issue of foreign loans, subsidized by the state, small commercial banks in developing countries can not withstand the competition. Rather than help the poor, artificially Reduced credit damage since they obscure some of the access to capital. That's bad. It is with the global financial crisis and economic difficulties microcredits become even more important because they help to develop their own business.

– That is the financial crisis affected your sector?

– Actually, surprisingly little. The reason is that we are quite isolated from international markets. Microcredit in Bangladesh, comprising 25% of the world's small loans to local reserves in national currency. The same situation in India. Or take our project in New York, where we have issued over 500 loans to women, on average, in the amount of $ 1200, so that they can develop their business. Here we return 99.6% of the funds – and this is in the city, where large banks are facing collapse. That feature of the crisis – banks stumbles on his own business – but those who previously considered insolvent, to pay obligations.

– Do you plan such microcredits in Germany?

– Not yet. But in Italy we have already established a joint venture with UniCredit, which will provide the capital. There, we will issue a microcredit – to the same rules as everywhere else. The money will pay for women, and so fall into the family. Our experience says that women are more concerned about the welfare of children, care more about the future. This is the case everywhere in the world.

Muhammad Yunus – Professor of Economics, Nobel Peace Prize in 2006. Born in 1940, graduated from Vanderbilt University (USA). Famed for the introduction of innovative forms of micro-credit for small business development. In 1976 he founded the Grameen Bank, which became one of the leaders in the sector of micro-credit. The Bank provides soft loans, the poorest segments of the population.

Siegfried Hofmann and Andreas Rink (TRANSLATION TATIANA Glazkova)