Brooke commends Nobel Peace Prize Winner

1.50.46pm UTC (GMT +0000) Fri 13th Oct 2006

Local MP Annette Brooke has commended the award of the Nobel Peace Prize to a pioneer in microfinance.

Annette, who chairs the All-Party Parliamentary Group on Microfinance, said:

"My heartfelt congratulations go out to Muhammad Yunus and the Grameen Bank for all the work they have done in the field of microfinance. It is wonderful to see that this essentially simple idea is receiving the recognition it deserves.

"Microfinance helps the poorest of the poor to lift themselves out of poverty through small business loans. Finding effective ways to tackle poverty is at the very heart of establishing worldwide peace and security."

Muhammad Yunus is the founder of the Grameen Bank in Bangladesh, whose pioneering work has influenced other microfinance projects around the world.

Earlier this year, Annette had the opportunity to visit a microfinance project in Kenya with the charity RESULTS UK. The Jamii Bora Trust offered a wide range of services, including small business loans, health insurance, a drug and alcohol programme, and housing loans. The enterprise had originally started with 50 street beggars as its first clients.

What is microfinance?

Microfinance offers poor people access to credit and other financial services and gives them a chance to work their way out of poverty. Loans, often as little as £25 or £50, enable very poor people, especially women, to start or expand tiny businesses without depending on money­lenders who often demand exorbitant interest rates.

Why is microfinance so effective?

Micro-loans are development assistance that is recycled, not lost. Every dollar committed to microfinance is multiplied several times over when loans are repaid and lent to other needy entrepreneurs. Study after study has shown that in spite of poverty, high risk and rapidly changing environments, good microfinance programmes boast a repayment rate of more than 95 percent.