Yunus and Usury
Last week Bangladesh economist Muhammed Yunus was awarded the Nobel Peace Prize for pioneered the idea of "micro-credit" -- giving small loans to help poor people start a business. He shared the prize with the Grameen Bank he created for the purpose. Some 100 million people have been helped by these efforts.
Reaction among conservative commentators has been generally positive... as one Cornerite put it, "I am glad the Grameen Bank won; they have done real work rather than just posturing. And, unlike Jimmy Carter, Muhammad Yunus has empowered democrats rather than dictators." Sounds good to me.
Then I came across this post, which points out that the Yunus' bank give these small loans at a twenty percent interest rate! The blogger notes, "I can't believe we live in an age where we are rewarding a man with a $1.4 million peace prize for usury. If he wants to help the poor give them loans with no interest or maybe up to 5%, but 20%?" and continues, "People can argue his banks have helped millions of people. Fine, that's great, I'm glad there are borrowers in India who can manage small amounts of credit. But it is a slippery slope and when it comes to usury, something the Church has always spoke against, things tend to head downhill fast."
This is compelling to me... how is a 20% interest rate not guilty of the sin of usury?