Glenn Reynolds notes that Bangladesh’s Muhammad Yunus and the Grameen Bank have been awarded the Nobel Peace Prize for their program of giving small, low-interest loans to women to start small businesses. Reynolds notes that this micro-loan system is far more effective at fighting poverty than large, centrally-driven aid programs.
He’s right on that count. Micro-loans allow wealth creation at the levels of society that need it most, whereas traditional aid programs usually rely on the efficiency and good intentions of governments that are often autocratic, bureaucratic, or even totalitarian. Targeting the most impoverished groups, often women, allows the aid to go to where it is needed most. Furthermore, rather than fostering cycles of dependency which reduce the chances of a nation getting out of poverty and staying out of poverty, these loans encourage the values of self-sufficiency and entrepreneurial activity necessary to create a vibrant and sustainable economy.
Mummahad Yunus and the Grameen Bank have weathered attacks from critics and Islamic radicals alike, but they have still stuck to their guns and continued to work towards lifting millions out of the mire of poverty and dependency. Their work is honorable, smart, and easily deserving of the high honor they’ve been given.