Poor could gain from financial crisis: Nobel winner

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San Jose, Calif, November 14:: ensuring repayment.

The bank claims a loan recovery rate of 98 per cent.

The success of the bank has spurred similar efforts around the world, including Grameen America, which said its bank loans have just topped $1 million, with 380 borrowers getting loans of about $1,500 to $2,500.

The bank's US push has been met with some skepticism that the Grameen model would work here. But the 68-year-old Yunus said the financial crisis has proved that social businesses like Grameen are actually more sound than traditional banks.

PARALLEL SYSTEM

"They say 'total reliance on collateral and lawyers and it is 100 per cent foolproof, nothing can go wrong.' And built a whole system on that belief. And this disaster has proven everything wrong."

"At the same time a parallel system has been growing which is microcredit. No collateral, no lawyers. Even this huge big financial earthquake can't shake them."

When it comes to helping the poor, Yunus argues for entrepreneurism over charity or government assistance, believing it to be self-sustaining.

"If people lose jobs where do they go? Do they fall back on welfare? If lending money, $2,200 to a person, can create a job, self-employment, isn't it a better idea?"

Yunus believes technology has been crucial to the micro credit movement by effectively shrinking the globe.

He notes that the mobile phone is now everywhere, in even the world's poorest villages and envisions a time in the near future where the simple device is used to connect the poor to health care access, banking and other services.