An early supporter of the Grameen bank, IFAD welcomes Yunus’ Nobel prize

Rome, 13 October 2006 - The International Fund for Agricultural Development (IFAD) has welcomed the news of the awarding of a Nobel Peace Prize to Professor Mohammed Yunus and the Grameen Bank.

Professor Yunus has been a pioneer of micro-credit lending schemes for the poor in Bangladesh. After 30 years, his bank has 6.6 million borrowers, of which 97% are women.

IFAD president Lennart Båge, reacting to the announcement, said “Professor Yunus’ leadership has brought opportunities to millions of poor rural families worldwide.”

“Professor Yunus challenged IFAD and other international financial and humanitarian institutions to question their approaches and to find better ways to serve poor people” said Båge.

Yunus and Båge are champions of the nine year Microcredit Summit Campaign launched in 1997 to reach 100 million of the world’s poorest families, especially the women of those families, with credit for self employment and other financial and business services.

Inspired by Professor Yunus’ role in enhancing access of the rural poor to credit - especially rural women - IFAD continues to build financial services in rural areas of developing countries. It has experimented with two major microfinance approaches – the Self Help Group Bank Linkage and the “Grameen type” microfinance institutions, among others. These combine the safety and reliability of formal approaches to finance with the convenience and flexibility of informal approaches, upon which poor rural people rely. This allows poor rural people without collateral to access the capital they need to improve their well being and productivity.

IFAD was one of the first United Nations agencies to support Professor Yunus initiatives on behalf of poor rural people.

From 1981 to 1995, IFAD provided capital to the Grameen bank through three projects. As the bank gained momentum and became an ever more successful and sustainable institution, donor financing was reduced.

From its own field experience, IFAD has learned that micro-finance loans are usually repaid, even by the poorest people. Evidence also shows that access to micro-finance service helps women to attain more influence in domestic decision-making and a more participation in local public institutions.

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IFAD is a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, it develops and finances projects that enable rural poor people to overcome poverty themselves. There are 188 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.3billion. IFAD has invested more than US$2.9 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help nearly 85 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$9.2 billion in 716 programmes and projects that have helped approximately 301 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project participants, have contributed almost US$8.9 billion, and multilateral, bilateral and other donors have provided another US$7.0 billion in cofinancing.