The co-winner of the first Nobel Peace Prize, Frédéric Passy, was an economist. Back in 1901, he won for ardently supporting free trade as the best way to promote peace between states. So perhaps it isn't so strange that this year's prize went to another economist, Muhammad Yunus, and his Grameen Bank.
What do a bank and a peace prize have to do with each other? Quite a lot, according to the Nobel committee, which wrote that “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty.”
The Grameen Bank was founded in Yunus's native Bangladesh, in 1976. Yunus realized that by lending small sums ? his first loan was US$27 ? to impoverished people without collateral, he could help them start tiny businesses, such as buying a mobile phone and lending it out.
Since inception, the bank ? which now has 2,226 branches ? claims it has lent US$5.72 billion, and boasts a repayment rate of 98.85%. Many economists dispute this rate. But with a raft of studies attesting to Grameen's positive impact on the poor, Yunus's micro-credit model has been successfully copied around the world.