A Nobel laureate has supported Prince Talal’s idea to create a special bank for poor Saudi citizens at a symposium in Riyadh on Wednesday.
Muhammad Yunus said there was a need to create a banking system based on mutual trust, accountability, participation and creativity with a mission to help the poor.
Prince Talal, chief of the Arab Gulf Program for Development (AGFUND), told the symposium that there was a possibility of designing a credit delivery system to provide banking services “targeted at the poor segment of Saudi society” with a mission to uplift them.
On the sidelines of the symposium, two agreements were signed between AGFUND and the Jeddah-based Islamic Development Bank (IDB) — the first one to boost cooperation between the two institutions and the second to conduct a study on the “impact of AGFUND prizes on society.” The symposium on microfinance and the role of social business was addressed by Dr. Ahmed Mohammad Ali, IDB president; Suleiman Al-Herbish, director-general of OPEC Fund for International Development (OFID); and Nasser Al-Qahtani, AGFUND’s executive director.
The symposium was jointly organized by AGFUND and the Council of Saudi Chambers of Commerce and Industry.
Speaking at the symposium, Prince Talal, said that he wanted the poor members of Saudi society to benefit from AGFUND or a bank created by AGFUND. “About 90 percent of AGFUND’s funds come from the Kingdom and hence these funds should be utilized for the poor section of our society,” said the prince.
In his speech, Yunus, who is nicknamed as the leader of the bank for the poor in the world, said there was a need to reverse conventional banking practice by removing the need for collateral.
He pointed to the financial crisis, which has led to perpetual food shortages.
“The root causes are the wrong structure, the capitalism structure that we have,” said the Bangladeshi Noble laureate, who is a jury member on AGFUND’s prize panel. “We have to redesign the structure we are operating in, which is wrong and unsustainable,” said Yunus, while welcoming the idea of a bank for the poor in Saudi Arabia. To this end, Prince Talal added: “Saudi Arabia is in need for the establishment of a bank for the poor, but there are artificial obstacles that impede this project.”
The panelists at the symposium were of the view that a bank for poor people in Saudi Arabia will help at least a small segment of the Saudi population, whose financial problems go unnoticed.
Many of them live in far-flung areas, especially in northern Saudi Arabia, said one speaker. The symposium was preceded by the signing of another agreement between AGFUND and the Arab Fund for Economic and Social Development (AFESD). The AFESD, as per this agreement, will contribute $5 million toward AGFUND’s expansion plans to finance banks of the poor in the Arab countries.
Riyadh witnessed the developmental event with the participation of international experts, as the Committee of AGFUND International Prize for the Pioneering Human Development Projects held its 13th Meeting under the chairmanship of Prince Talal. This meeting took place on Wednesday at the Ritz Carlton Hotel in Riyadh and approved the winning AGFUND Prize projects for 2011 and the prize categories for 2012.
The total number of projects nominated for the prize across its four categories were 73 from 66 countries. The prize subject was empowering youth through entrepreneurships and job opportunities. The categories are as follows:
• First Category: The role of international organizations in supporting the developing countries’ national policies and programs for empowering youth through entrepreneurships and job opportunities. (For projects implemented by UN, international or regional organizations)
• Second Category: NGO-led efforts to empowering youth through entrepreneurships and job opportunities. (For projects implemented by national NGOs).
• Third Category: Governmental bodies’ efforts in adoption of pioneering entrepreneurships for empowering youth and increasing their job opportunities. (For projects by government ministries and public institutions).
• Fourth Category: Individual-led efforts to empowering youth through entrepreneurships and job opportunities. (For projects initiated, sponsored and/or implemented by individuals).
The AGFUND is a regional organization supported by the leaders of the Gulf Cooperation Council countries. AGFUND works mainly in the field of development and growth at an international level through an effective partnership with UN agencies, regional and national development organizations, public institutions, the private sector, as well as organizations in civil society. Since its foundation, AGFUND has supported and financed 1,268 projects in 133 developing countries.