Two Chicago bankers took special satisfaction in the announcement last week that Bangladeshi banker Muhammad Yunus and his bank had won the Nobel Peace Prize for making microloans to the poor.
ShoreBank Corp. president Mary Houghton and chairman Ronald Grzywinski were consultants to Mr. Yunus for a decade in the 1980s and 1990s.
The Norwegian Nobel Committee said it would give the 2006 Peace Prize in two equal parts to Mr. Yunus and his Grameen Bank for their efforts to help bring social change through lending to the poor.
“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,” the committee said in a statement.
Ms. Houghton and Mr. Grzywinski were introduced to Mr. Yunus in 1983 as he prepared to set up Grameen Bank. They had co-founded ShoreBank a decade earlier to lend in a low-income Chicago neighborhood, and one of their investors, the Ford Foundation, asked them to meet with Mr. Yunus to advise on how to effectively, and profitably, manage a bank targeting the poor.
But the arrangement worked both ways. Mr. Yunus came to the United States to advise ShoreBank on a microlending program it set up in Arkansas in the mid-1980s under then-Gov. Bill Clinton.
Ms. Houghton said the success of ShoreBank and Grameen Bank in lending to low-income borrowers helped inspire President Clinton to create the Community Development Financial Institution Fund in 1994. She said she believes Grameen’s recognition by the Nobel committee will raise the profiles of all community development lenders.
“Hopefully this exposure will increase the number of people who want to invest in these kinds of banks that want to serve markets that are generally neglected,” she said.
The Peace Prize will help highlight banks’ ability to profitably serve poor people, Ms. Houghton said, and economic development’s ability to promote peace and stability in the world. She said that, when people feel they have economic choices and can make a living for their families, they are more likely to want to avoid wars and look for other solutions to problems.
“Economic choice can really change the course of the community or a region and make it peace-loving,” she said.
Andrea Levere, the president of CFED, a Washington, D.C., nonprofit that promotes economic development, said that this Nobel award would help people understand economic development’s importance.
“Entrepreneurship and homeownership mean you see a greater stake in your own community,” Ms. Levere said, “and we have seen that translate into a greater participation in civic life.”
She said she has already seen an effect on the perception of her organization in the wake of Grameen’s winning of the Nobel Prize.
“The father of one of my staff called her three times and said, ‘You are doing something important,’ ” where he previously did not understand what CFED did, Ms. Levere said.
