Opening remarks to the Banking for International Settlement Conference: Financial inclusion and the regulation of microfinance

Financial crises illustrate a fundamental flaw in the way the current financial system is organized. The financial institutions and banking systems of advanced economies focused on big banks and big customers. This system embodies a kind of financial apartheid; two thirds of the world's populations are excluded. Unless we bring these people into the financial system, crises will keep recurring.

Grameen finances everyone. It has demonstrated that even beggars can be financed. We have around 100,000 beggars in the programme: they borrow small amounts of money to buy goods that they can offer for sale when begging from door to door. Some have left begging this way and started their own businesses.

Grameen Bank has 8.3 million borrowers, of whom 97% are women. The bank borrows no money from the outside, it is entirely self-financed. It takes deposits from people and gives small loans to poor people. So far it has given more than $10 billion in microloans, with a recovery rate of 97%.

The issue for this audience is how to make this story happen in Africa. Women in Africa are at the forefront of the fight for equality of financial access. Microfinance already exists in Africa. But, in my view, it should be done by specialized institutions, not commercial banks or NGOs. The issue is how to make such microfinance institutions part of the mainstream banking system. In Bangladesh, a special banking law was created for Grameen Bank. I think we should aim for a banking law for banks for the poor.

Source: http://www.muhammadyunus.org/