Professor Yunus, could you please explain how micro-credit is different from any other kind of money lending?
First, it’s addressed to the poor. It doesn’t rely on collateral, because collateral is the thing which brings a wall between financial institutions and poor people. It is something that is designed to be friendly to poor people, particularly poor women. Its basic principle is that people should not come to the bank. The bank should go to the people. So it makes it enormously easy for women to do business with someone in the home, rather than going to the office. The office is a threatening institution for a poor person to hang around and try to find a place to get connected. Also, the repayments are designed in such a way that they are tiny installments. You can pay back your loan over a long period. So all of this together is micro-credit. Small loans for income-generating activity, addressed to the poorest, without collateral. And who funds micro-credit? Just like anybody will fund any program. It could be a loan from an institution, or savings from the borrower, or savings from the
