Nobel Peace Laureate Accepts Award

Yunus, 66, often called the banker to the poor, shared the coveted award with his Grameen Bank for helping people, even beggars, rise above poverty by giving them microcredit -- small, usually unsecured loans.

"Poverty is a threat to peace," Yunus said after accepting the prize at Oslo's City Hall.

"I believe this honor that you give us will inspire many more bold initiatives around the world to make a historical breakthrough in ending global poverty."

Grameen Bank, set up in 1983, was the first lender to provide microcredit, giving very small loans to poor Bangladeshis who did not qualify for loans from conventional banks. No collateral is needed, and repayment is based on an honor system, with nearly a 100 percent repayment rate.

Yunus said the idea has spread around the world, with similar programs in almost every country.

"I firmly believe that we can create a poverty free world if we collectively believe in it," Yunus said. "The only place you would be able to see poverty is in a poverty museum."

Clad in a traditional Bangladeshi sleeveless jacket, Yunus accepted his half of the 10 million Swedish kronor (euro1.1 million; US$1.4 million) prize from awards committee chairman Ole Danbolt Mjoes.

Board member Mosammat Taslima Begum, wearing a traditional dress in red with a green shawl, accepted the other half of the award on behalf of Grameen bank, saying she dedicated it to all Bangladeshis.

Mjoes said the award was partially intended as an outstretched hand to the Islamic world in an era where Muslims are often demonized because of terrorism.

"The peace prize to Yunus and Grameen Bank is also support for the Muslim country of Bangladesh, and for the Muslim environments in the world that are working for dialogue and collaboration," Mjoes said,

Yunus, the first Nobel Prize winner from Bangladesh, said terrorists cannot be defeated by military means.

"We must address the root causes of terrorism to end it for all time," he said. "I believe putting resources into improving the lives of poor people is a better strategy than spending it on guns."

By giving tiny loans, averaging US$200 (euro150), to about 7 million people, 97 percent women, the bank has helped them earn a living by, for example, buying a chicken, acquiring a cell phone to rent out, or buying raw materials to build products to sell. Yunus said 58 percent of the bank's borrowers now live above the poverty line.

Recipients are put in groups of five. Once two members of the group have borrowed money, the other three must wait for the funds to be repaid before they get a loan, with interest rates ranging from zero to 20 percent depending on the use of the money.

Yunus had the idea while on field trips in poor regions during a famine in Bangladesh in the 1970s after returning home with a doctorate in economics from Vanderbilt University in Tennessee. He loaned 42 rural women at total of US$27 (about euro20) enough to buy the raw materials needed to make reed chairs, so they could earn a living and repay him.

But he said conventional banks still balked at lending money to poor families, so he expanded the idea, founding the bank, which was formally incorporated in 1983, under the name Grameen, which means rural or village in the Bengali language.

"Grameen has given me an unshakable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty," he said.

Yunus used his Nobel lecture to give a gentle barb to the Norwegian state-controlled telecommunications group Telenor ASA, which owns 62 percent of a joint venture with the bank called Grameen Phone. That program, begun in 1997, started off with the idea of "telephone ladies" -- poor rural women who borrowed to buy a mobile phone to rent out -- and has expanded to 10 million subscribers.

Yunus has urged Telenor to relinquish control to Grameen Bank, which has a 38 percent stake, something the Norwegian group said had never been agreed.

"Our vision is to ultimately convert this company into a social business by giving majority ownership to the poor women of Grameen Bank," Yunus said.

The prize ceremony in Oslo featured traditional dances by Bangladeshi performers before hundreds of guests, including Norway's royal family. It was to be followed by a torchlight parade in the winners' honor and a lavish evening banquet.

The Nobel Prizes are always presented in Oslo and Stockholm, Sweden, on the Dec. 10 anniversary of the death of their creator, Swedish industrialist Alfred Nobel.