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DON WITH A MESSAGE: Prof Muhammad Yunus being greeted by Foreign Minister George Yeo at the latter's office. -- ST PHOTO: SHAHRIYA YAHAYA
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A CHARITY dollar can be spent only once. But use the same dollar to help the poor set up businesses and they can be firmly on the path to self-reliance.
That was the message of Nobel Peace Prize winner Muhammad Yunus, who delivered the inaugural Nobel Laureate Lecture organised by the Institute of Policy Studies (IPS) yesterday.
For the better part of an hour, Professor Yunus walked the audience - a motley mix of Cabinet ministers, civil servants, bankers and students - through his experiences in lifting millions out of the poverty trap in his native Bangladesh.
The Fulbright scholar and economist is the founder and managing director of Grameen Bank, which lends small sums of money without collateral - or guarantees - to its borrowers, most of whom are poor village women. The borrowers use this money to set up small businesses.
Grameen Bank is the 'reverse or mirror image' of conventional banks, said Prof Yunus.
Elaborating on how conventional banks denied the poor access to loans as there was no guarantee they would get their money back, Prof Yunus said: 'In Grameen Bank, the less you have, the more you get.'
Although trust is their only collateral, the vast majority of borrowers in his bank pay back their loans: Deposits at Grameen now stand at 156per cent of outstanding loans.
The bank's business model is already being replicated in more than 100 countries, including developed countries such as the United States, Norway and Britain.
Many of these projects are in urban settings not unlike Singapore.
In his closing remarks, IPS chairman Professor Tommy Koh pointed out that initiatives similar to what the Grameen Bank was doing could work in Singapore.
'Although we have made a lot of progress, there are still vulnerable people here,' said ProfKoh.
Families which earned less than $2,000 a month here had difficulty securing loans.
'Banks don't consider them credit-worthy,' said ProfKoh. As a result, some fell into the clutches of loan sharks.
MsBraema Mathi, former president of women's group Aware and a former Nominated MP, said the poor could be helped to become self-reliant by liberalising rules governing setting up of businesses.
IPS deputy director Arun Mahizhnan said people should be willing to think out of the box and come up with business ideas.
'We don't always have to look for a job. We can create businesses on our own if we think hard enough.'
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