The microloan industry is not being impacted by the global economic downturn, according to Muhammad Yunus, the founder of Grameen Bank and pioneer of the use of micro-loans to individuals without collateral.
"The kind of program that we run is crisis free. It continues to do the same thing," the 2006 Nobel Peace Prize winner said. "One reason, perhaps, is our work is related to a real economy."
And it's growing.
Micro-loans went to 154 million people worldwide in 2007 and, according to Grameen, the bank's ability to grow its business has not been impacted by the economic downturn.
"I would say we have reached about 80 percent of poor families (in Bangladesh) with micro-credit facilities," he said. "And we are hoping we will reach 100 percent in the next three or four years."
The bank's ability to offer micro-loans also is not being impacted directly by the economic downturn, Yunus said, though microcredit borrowers are seeing lessening demand for their goods and services. Still, repayments have not declined at all, according to Yunus.
"It's almost like sub-sub-sub-sub prime," he said. "It's a trust-based banking, and it still works. It's much stronger than any other banking format that we know."
Yunus, who will accept the Presidential Medal of Freedom in a ceremony at the White House Wednesday, founded Grameen Bank in 1983. Grameen America launched in January, 2008, and has lent more than $2 million to US entrepreneurs. The bank has 2,558 branches and services 84,573 villages in Bangladesh. Of its 7.93 million borrowers, 97 percent are women.