Gramneen Bank model can help check farmers' suicide: Nobel Laureate

Mumbai, Feb 2 (UNI) Chairman of Grameen Bank, Prof Muhammad Yunus of Bangla Desh, who is the winner of Nobel Peace Prize for Peace in the year 2006, is of the strong view that if the Grameen Bank model was adopted in its full spirit in India, then the menace of farmers' suicide can easily be brought under control.

Talking to reporters on the sidelines of delivering a lecture on 'Social Business entrepreneurs are the solution' here last evening he said that "People can't find escape route and you'll have to eliminate money lenders to curb the menace".

As I understand from the reports of farmers' suicide in certain pockets of India like Vidarbha, poor farmers are not having any land or money with them and hence unable to pay the loans that they had taken from the money lenders which compel them to end their lives by such acts. However, if a collateral relationship is established between the farmers and the money lending institution then there lies no room for such things, he said and added that it is what the principle of Grameen Bank is based on.

Comparing the rates being charged by the commercial banks and the Grameen Bank, he said that unlike commercial banks that charge 15-16 per cent of interest rates, we charge merely 8 per cent as interest amount from our borrowers. While Grameen Bank provides housing loans at an interest rate of 8 per cent, it is merely in the case of students that too with a facility of charging zero per cent interest during the study period.

Categorising deposit rates, Prof Yunus said that you are doing a great job if you are paying 8 per cent of interest plus the cost of the fund, the depositor has invested with your institution. If it goes up to 15-16 per cent then it becomes yellow area. But the moment it goes beyond that it enters red zone, he cautioned.

UNI