Nobel Peace Prize Winner Yunnus Criticizes Compartamos Bank

Nobel Peace Prize winner Muhammad Yunnus criticized Compartamos Bank for making a big profit from lending to the poor. PSD blog pulls the quote from this PBS show titled, “Who’s Making Money From Microcredit?“.

Poor people’s willingness to pay high interest is not a justification for charging it, he says. Compartamos is not microcredit, it’s “raking in money off poor people desperate for cash.”

It’s definitely a thin line and although the Yunnus quote doesn’t portray Compartamos in favorable light, I think it’s important to consider less extreme examples where it’s harder to see a distinct line between good and bad. At what interest rate would Yunnus not be upset? Some questions at the intersection where capitalism and socially responsible business meet.

On a related note (since you are all here), check out FINCA, the microfinance organization that Natalie Portman is involved with– their Village Banking Campaign is trying to create 100,000 village banks by the year 2010.

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