Renowned economist and social advocate Muhammad Yunus promoted banking reform as a possible solution to world poverty Tuesday night in Gaston Hall.

At the conclusion of Yunus’ lecture, University President John J. DeGioia presented him with Georgetown’s President’s Medal.

Yunus described his encounters with poverty in his homeland of Bangladesh and his efforts to promote the spread of `micro-credit’ as the catalyst for the alleviation of economic scarcity.

While teaching at a university in Bangladesh, Yunus first realized the power his economic principles could have on the nation’s poor.

“I would come out of the university and see poverty,” Yunus said. “You feel totally useless as a human being when all your `knowledge’ doesn’t make you helpful to those in need.”

Yunus said he was shocked by the economic conditions he found in the country. “I went around to the villages to see what I could do to make someone’s life better, even for just one day.”

Yunus said many villagers were virtually slaves to money lenders, who used their loans as leverage to force villagers to sell them products at lowered prices. Often the loans were for meager sums of money, he said.

Yunus described one village he visited where the residents had taken out 47 loans and owed $27. Yunus immediately took out his wallet and paid off the debt.

“People had a sense of liberation, like I had performed something in the nature of a miracle,” he said. “And I thought, if I could do something like that for so many people with such a small amount of money, I should do that.”

Since 1983 Yunus’ realized vision, the Grameen Bank, has lent over $4 billion to the poor of Bangladesh without collateral or credit. His approaches to credit and lending stand in contrast to the established financial institutions in Bangladesh, but he claimed the results are hard to contradict.

Yunus boasted a 95 percent repayment rate for his bank, which makes a substantial profit and helps half of those receiving loans to move out of poverty.

Other positive effects of the micro-credit system include increased sanitation, lower mortality rate and higher levels of education for children whose families take out loans.

Yunus credits these increases in the social welfare to the bank’s policy of lending almost exclusively to women. He said that 96 percent of the bank’s loans were given to women.

“Money through women benefited the family more than through men” Yunus said.

Yunus also suggested plans for the expansion of his credit system and the reform of banking systems worldwide to accommodate the poor.

“I said, and I still say, the banking systems are designed to benefit the privileged,” he said. “It is by design the poor are left out.”

Yunus described the poor as victims of an unfortunate socio-political structure. “Poverty is created by the system we created . If we can fix the system, we can cure poverty,” he said.

Yunus received a standing ovation at the speech’s conclusion.

He joins the ranks of previous President’s Medal recipients, including Archbishop Desmond Tutu of South Africa, Afghani President Hamid Karzai and many other distinguished leaders.

Yunus’ lecture was part of the university’s Pacem in Terris lecture series celebrating the 40th anniversary of the papal encyclical of the same name issued by Pope John XXIII in 1963.

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