|How Legal Steps Can Help Pave the Way to Ending Poverty
|Wednesday, 24 September 2008
Professor Yunus's Winter 2008 article in Human Rights Magazine is particularly relevant given the current financial turmoil. In the article, he discusses the critical role trust – and not complex legal contracts – has played in Grameen's success. Even though Grameen works with the "sub sub sub" prime, it does not share the same fate of other financial institutions around us. The Grameen model requires banker and borrower to look each other in the eye, to meet regularly and to build trust. With repayment rates of 98% or better, both here in the U.S. and in Bangladesh, Grameen's model works.
While Grameen has not had to rely on legal contracts with borrowers to achieve success, Yunus does see an important role for the legal profession to play in paving the way for the poor to better help themselves, including much needed reform to U.S. Welfare and Medicaid laws and simpler laws that enable microfinance programs to receive savings deposits. To read the full article, click here .