Financial systems have design flaws, Covid has revealed weaknesses: Yunus

Nobel laureate and founder of the Grameen Bank, Muhammad Yunus, on Friday said the coronavirus pandemic has given the world a chance to reflect and take "outrageously" bold decisions to create a new order where there is no global warming, no wealth concentration and no unemployment.

In a conversation with Congress leader Rahul Gandhi, Yunus called for making a new beginning towards a system that will create space for the informal and rural economy and all sections of society.

The dialogue was part of a series launched by Gandhi after the outbreak of the Covid-19 pandemic. He has earlier talked to several experts, both in the economy and epidemiology, besides nurses and industrialists.

"Covid has given us a chance to reflect on how big, bold decisions can be taken. It has given us a window of thinking and we have a choice, whether we go to that terrible world which is going to destroy itself anyway or we go someplace else and build a new world where there will be no global warming, no wealth concentration, no unemployment," the pioneer of micro credit financing said.

Stressing the need to recognise the poor, the migrants, the women at the lowest strata of society, Yunus said, "Financial systems are designed in wrong ways. Covid has revealed the weaknesses now. Poor people are all over but the economy does not recognize them. If we can finance them they will move up the ladder. We are engaged with the formal sector."

He also criticised the western economic model, saying it was based on treating the urban economy as the hub and the rural economy as the supplier of labour.

"Why can't we build an autonomous economy?" he asked citing how Grameen Bank, built on trust and no legalese, had shown that millions of dollars could be loaned to the poor just on trust and they would return the amount with interest.

"How did we do that in Grameen Bank? People were shocked. I said we believe in their capacity. They believe in us. There is no collateral. Grameen Bank is the only bank in the world which is lawyer free. A bank built on trust where millions of dollars are given and come back with interest," said Yunus, adding, that when micro credit was given to women they showed how much entrepreneurial capacity they had.

The whole world has now accepted micro credit, said the Bangladeshi credited with revolutionising micro credit.

Emphasising the need to value human culture, Yunus said everything the world has done is to fuel greed which has destroyed everything.

"This is the chance I said, Corona has given us a chance to reflect...In normal situations you will not pay attention to all these things. We are so busy making money," noted the economist.