Abu Dhabi: Financial institutions such as banks need to restructure their systems to enable easier access to credit to a wider demographic of people, according to Mohammad Yunus, Nobel Peace Prize winner and chairman of Yunus Centre in Bangladesh.
“A bulk of the human population of this planet is excluded from financial services…It is wrong what financial institutions are doing, which is excluding poorer people from [financial] services…
If there’s anything that my [centre] stands for, it’s the challenge for the financial systems that they have to reexamine themselves – it cannot be a financial system only for the rich,” he said.
Yunus added that financing and easy access to credit should be accepted as basic human rights.
“Governments are prone to give wealthier people free money, but very reluctant when it comes to microcredit,” he said.
Yunus also discussed the issue of unemployment, describing it as an “artificial concept” stemming from the idea that people need to wait to get jobs rather than create their own business.
He said that jobs are “clipping the wings of human beings” as people favour being job creators rather than job seekers, but access to credit from financial institutions was getting in the way of allowing people to create their own jobs.
Such a move to enable easier access to financing can eventually lead to a world with no unemployment, according to Yunus.
Estimates from the Arab Monetary Fund show that the youth unemployment rate amoung in Arab countries last year stood at 28 per cent. The unemployment rate among young women, specifically, however, is much higher, reaching 43 per cent.
In comparison, the youth unemployment rate globally is 12.4 per cent, and 12.7 per cent among young women.
Yunus was speaking on Monday at the Microcredit Summit in Abu Dhabi on Monday, which focuses on financial inclusion strategies to promote sustainable growth and boost the Small and Medium Enterprise (SME) sector.
Also speaking at the event was Sultan Al Mansouri, the UAE’s Minister of Economy. He pointed that with 2015 having been the year of innovation in the country, the UAE’s government adopted over 100 innovation initiatives with a total investment value of over Dh300 billion. The investment aims to make the UAE one of the most innovation countries in the world by 2021.
Al Mansouri said that microfinance is one the most effective and proven tools in reducing poverty as it covers financial services targeting select demographics like low-income families and individuals, women, elderly, and young people.
“Today, there are more than 150 million micro borrowers in the world who have exceeded $65 billion in credit, with an average loan of $520 a piece, according to the Microfinance Information Exchange.
Furthermore, there are more than 100 million people who are in need of microfinance today. Studies show that microfinance is growing at a rate of 30 per cent [annually] and an average repayment rate of 97 per cent,” the minister said in his speech.
The event, now in its 18th year, brought together various supporters of microfinance including Queen Sofia of Spain, and Hussain Al Nowais, chairman of Khalifa Fund for Enterprise Development. It was inaugurated by Shaikh Hamed Bin Zayed Al Nahyan, chairman of Crown Prince Court in Abu Dhabi and chairman of the Board of Trustees of Khalifa University.
