Professor Muhammad Yunus, Founder and Managing Director of the Grameen Bank, Bangladesh; Mr. Daud Ballali; the Governor of the Bank of Tanzania,

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1 STATEMENT BY THE MINISTER FOR FINANCE HON. ZAKIA HAMDANI MEGHJI (MP) AT DINNER IN HONOUR OF PROF. MUHAMMAD YUNUS FOUNDER AND MANAGING DIRECTOR OF THE GRAMEEN BANK BANGLADESH AT THE KILIMANJARO HOTEL KEMPINSKI DAR ES SALAAM ON 12 TH JUNE, 2007 Professor Muhammad Yunus, Founder and Managing Director of the Grameen Bank, Bangladesh; Honourable Ministers; and Deputy Ministers, Mr. Daud Ballali; the Governor of the Bank of Tanzania, Permanent Secretaries and Deputy Permanent Secretaries; Chief Executive Officers of Banks, Microfinance Institutions and SMEs; Distinguished Guests; Ladies and Gentlemen: Good evening! Prof. Yunus, on behalf of the Government and people of the United Republic of Tanzania, and on my own behalf, I feel greatly honoured to host you this evening. I would like to use the opportunity to welcome you once again to Tanzania. As you probably will have noticed from the few events you participated in today, your visit here, as is the rest of your work, has generated considerable public interest. I know that your time must now be apportioned to meet the demands of many internationally, including UN agencies, private foundations, governments across the world, and many private individuals. That you found time to respond positively to the invitation of HE Jakaya Mrisho Kikwete,

2 President of the United Republic of Tanzania, is a great honour to all of us, and I wish to thank you on behalf of my compatriots. Professor, KARIBU SANA. Let me hasten to say here that I hope we are not taking you away from your primary mission, the rural communities and especially poor women of Bangladesh. His Excellency the President s invitation emanated from our shared interest in the work you and your colleagues in the Grameen Bank have accomplished in Bangladesh, and dates back before even the Nobel Peace Prize Council announced its interest in that work. Tanzania and Bangladesh may be oceans apart, but we share many characteristics including the predominance of poor, rural based economies. In both our countries, rural small scale agriculture is the mainstay of the economy, the main source of livelihood for a majority of our people and providing most of our domestic production. Yet the orthodox financial sector operating from the high streets of our capitals has no place for the rural poor. I am calling these orthodox because I do not know whether they should be referred to as traditional or modern; they simply do not click when it comes to meeting the needs of the great majority of our people! Ladies and Gentlemen, let me share a bit of Tanzania s experience in this area, particularly over the so-called economic reforms period. The new policy thrust provided for an enhanced role of the private sector in the economy, market based economic policies, and the rolling back of the role of the Government in productive sectors to create room for private sector participation. The reforms included a complete restructuring of the financial 2

3 sector. In the banking sub-sector, there has been a substantial increase in the number of commercial banks, which has meant competition and some improvement in the quality of services offered to customers. However, the sub sector s services are still confined largely to the formal sectors and in the major cities and regional centers. Thus, the gap in the provision of financial services to the micro-and-small enterprises persists. In recognition of the likely service gap, the Tanzania Government formulated the National Microfinance Policy in May The Policy is based on a vision of achieving widespread access to microfinance services throughout the country, as an integral element of the poverty reduction drive and modernisation of the economy. In this respect, I know that we have a shared vision with the Grameen people. To quote your own vision, Mr Managing Director, "Poverty is an artificial creation; it does not belong to human civilization. We can change it.. Poor people are not asking for charity; charity is not a solution for poverty.. Thus, the only thing we need to do soon, is a redesign our institutions and policies. People can change their own life provided they got the right kind of institutional support" end of quote. Ladies and Gentlemen: You will agree with me, I believe, in asserting that the Grameen model has demonstrated that this vision is achievable; it is not a pipe dream. Through a partner programme being implemented in Tanzania the Programme for the Formalisation of the Assets and Businesses of the Poor (better known by its 3

4 Swahili acronym; MKURABITA) we have gathered evidence that the poor have the capacity to create wealth as much as any one else. And, they do hold enormous wealth, if only our modern institutions could see it. The poor do not lack ideas, motivation, skill or entrepreneurship. Contrary to what some people believe, the poor do not have to learn new skills, or "change their attitudes" to take the first step out of poverty. These people remain desperately poor because an oppressive and exploitative economic system keeps them trapped. They can not get access to capital to create their own jobs because they do not have any collateral. The bad system simply exploits them. Access to credit allows them to break free from the trap, explore their potential and create enormous wealth for themselves and their communities. That is what you have achieved, Professor Yunus. You have given mankind and the world the reason to take a step out of our boxes of modernity; to reach out for the majority of our own people. Distinguished Guests, Ladies and Gentlemen, unfortunately, poverty does not get eradicated by vision statements. Not even because a Minister for Finance denounces a financial system that shuns the majority of a country s population. While many countries have tried to reach the poor and integrate them in the modern economy, not many have recorded as much success as the Grameen Bank has done. That is why your presence here means a lot to our country. We want to share views with the successful experimenters. I thank you for the insights you have given us today, but also want to tell you that 4

5 we will be asking even more questions as we move forward in following your Professorial lessons. We will therefore wish to maintain contacts with you and your institution. I hope, and ask, that there always be a place for Tanzania in your busy schedules. Ladies and Gentlemen; this occasion is not meant for a long speech, so I propose to stop. But before I do that, please allow me to recognise and congratulate you personally Professor Yunus for winning the Nobel Peace Prize for 2006, and so many other prizes. I recognise your vision of total eradication of poverty from the world. Congratulations for establishing 'Grameen Bank', which as you have said elsewhere, is 'is a message of hope, a programme for putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing (Poverty) to go on for so long'. It is now my pleasure, Managing Director, to propose a toast in your honour, for your good health, and for the good relations between the United Republic of Tanzania and the Peoples Republic of Bangladesh particularly the Grameen Bank which you lead. KARIBUNI. Dar es Salaam 12 th June,