Grameen Bank Founder Wins Nobel Peace Prize
The Grameen Bank Model started a worldwide industry to lift people out of poverty; REAP was spawned from this model and vision
The 2006 Nobel Peace Prize was recently awarded to Dr.
Muhammad Yunas from Bangladesh. An economist who founded the concept of micro credit in the 1970’s through the Grameen Bank, Dr. Yunas’ innovative approach of lending small amounts of capital to help lift people out of poverty in Bangladesh helped to create an industry. That industry is now at work in countless communities from coast to coast in the United States and across the world.
REAP is Nebraska’s largest microenterprise development program. We offer core business development services to rural microenterprises (businesses with five or fewer employees). Services include micro credit (loans up to $35,000), training, one-on-one technical assistance, and networking. REAP, along with some 3,000 other microfinance organizations in more than 100 countries, were spawned from Dr. Yunas’ Grameen Bank model and vision.
In the 1970’s, the Grameen Bank was the first lender to place micro loans, making small loans to mainly impoverished women from Bangladesh who did not qualify for traditional loans. The average loan now is about $200 and is loaned through a group lending process. Participants are put in groups of five, with initially only two of the participants receiving small loans. The other three receive loans when the first two have established a strong repayment record.
Dr. Yunas’ first loan was $27 to 42 villagers and was made out of his own pocket. The loan had no paperwork or collateral and was repaid in full. From this point, he founded the Grameen Bank to implement his vision. Grameen means “rural” in the Bengali language. The Grameen Bank to date has loaned more than $5 billion to about 6 million borrowers who are mostly women.
Jeff Reynolds, REAP Program Director at the Center for Rural Affairs, explained, “This is a proud moment for the microenterprise sector in the United States and throughout the world. The award clearly speaks to the great need and impact of microenterprise development. The need for REAP and other microenterprise programs in Nebraska is large and is vital to the success of Nebraska entrepreneurs and to the state’s overall economy.”
REAP lending and assistance help people start or expand small businesses across rural Nebraska. Rural areas often lack employment opportunities, and starting a small business is the best and sometimes only option for making a living. Over 85 percent of the businesses in Nebraska are microenterprise in size (five or fewer employees).
The REAP program and virtually all the microenterprise development programs in the United States are direct descendants of the Grameen Bank model. REAP, started by the Center for Rural Affairs in 1990, exclusively utilized a peer group lending model through 1998, before introducing the availability of larger loans placed outside of the group structure.
Since 1990, REAP has placed 277 peer group loans totaling $474,923. We have placed 228 direct loans totaling $2,919,093 since 1999. An additional $7,261,155 in loans from traditional sources has been leveraged since 1997 through our business planning and loan packaging services. Over 5,000 startup and existing entrepreneurs in rural Nebraska have received REAP services.
These services are made possible by funding from the Community Development Block Grant program through the Nebraska Department of Economic Development, the Cooper Foundation, Share Our Strength Foundation, Kellogg Foundation through the HomeTown Competitiveness Initiative, Nebraska Microenterprise Partnership Fund through the Nebraska Microenterprise Development Act, Small Business Administration Microloan and Women’s Business Center Programs, and from USDA and other sources.
REAP collaborates with many other individuals and organizations and is a member of the Nebraska Enterprise Opportunity Network (NEON). NEON is the trade association in Nebraska for microenterprise programs and offers policy and training opportunities for microenterprise programs and practitioners. A complete listing of microenterprise service providers in Nebraska can be found at