Nobel prize winner and internationally acclaimed micro finance speaker and expert Mohammad Yunus blasted Nigeria's micro finance banking, claiming that it favours the rich when it should be further taking notice of the poor.

As a speaker at the International Conference on micro financing on Monday (5^th September), Yunus said: “Micro financing is non conventional banking; it is not an extension of conventional banking. Conventional banking is for the rich, whereas micro financing is for the poor.

“Conventional banks want collateral, we say forget it, the less collateral our customers have, the more excited we are, when the conventional asks what you know about the business, we ask what you don't know about the business. Conventional banks are owned by the rich. Grameen bank is owned by the poor”.

Mohammad Yunus' Grameen Bank was set up in Bangladesh in 1976 as a means to further social and economic growth for the impoverished without demanding collateral.

However, Yunus and other speakers now believe that micro financing is not being properly used in Nigerian banking. The managing director of First Bank agreed with Yunus that “what we practise in Nigeria is not micro financing” and affirmed “we will enter into discussion with Mohammad Yunus and see how we can partner with Grameen Bank to do it right”.

Yunus also explained that loans for education attract five per cent interest and that this should be kept low and simple for borrowers.

Mohammad Yunus secured the Nobel Peace Prize in 2006 for his work with Grameen Bank, which he says “turns conventional banking upside down”. As a micro financing speaker he has continued replicated this banking structure across the globe with success, saying “Now we have four branches in New York and we are opening in two other cities in the US”.

Other speakers praised Yunus' speech, with the managing director of Nigeria's First Bank vowing to restructure the micro financing model of the bank in light of Yunus' comments.