Banking on foreign money risky: Yunus
Nobel laureate Muhammad Yunus yesterday said the global financial meltdown has exposed the dangers of relying on foreign money.
"Financial crisis makes it more clear that dependence on foreign money is not a great idea at all. It gets you exposed to other things. So, my recommendation is to rely on the local money," Yunus, Grameen Bank founder, said at a microfinance conference organised by community finance institution Sa-Dhan.
He said Grameen Bank has not taken external help since 1995 and all the money comes from its own system.
"Unless we can solve the money problem, microcredit will not go anywhere. In order to solve the money problem, the best solution is to create yourself into a bank, taking deposits and lending money," Yunus said.
The bank lends over $100 million a month and all the money comes from its own deposits.
Yunus said a separate banking law is required for the success of microcredit anywhere in the world. "We should be making it very clear to the legislature that we need a separate law."
India had tabled Micro Finance Institution Bill in the Parliament, which is currently being examined by Standing Committee.
"Without the legislation, we will be stumbling again and again," he said.
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