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Jakarta Post

Banks tend to ignore the poor: Nobel laureate

  • The Jakarta Post

Jakarta   /   Thu, October 25 2012   /  10:49 am

Putting too much emphasis on profit is probably the most fundamental flaw in the world’s banking system, leading banks to neglect their main function of providing credit access to the public, microfinance expert and Nobel laureate Muhammad Yunus says.

“I see that there is something wrong with our banking system: Banks lend to people who have lots of money. That’s wrong, they should lend to people who do not have the money,” he told a seminar in Jakarta on Wednesday.

Yunus, the founder of the pioneering Bangladeshi microcredit Grameen Bank, said that such a situation would prevent lower-income people from having more access to financing, which was necessary for them to get out of the cycle of poverty.

“Poverty is not created by poor people, it is created by the system all around us. If you want to remove poverty, you need to look at the system as a whole a...