No-strings-attached lending is anathema to the serious commercial banker, who sees only a wafer-thin line between such 'lending' and the un-bank-like practice of giving (non-returnable) grants. Such doubts, indeed, are not confined to the banking industry. In the face of home grown problems of unemployment or health-care, for instance, democratically elected governments of donor countries are finding themselves under increasing pressure from their voters to cut back on bilateral assistance to hopelessly indebted taker-states. Multilateral lending and development institutions are facing an uncertain future, trapped in the vicious circle of bad debts that are all-too-steadily increasing, capital and funding quotas that are failing to materialize (eyes are currently on the US Congress), and borrowing that is becoming ever-more expensive. The African Development Bank is faltering; a Middle East Development Bank is in danger of being stillborn. The World Bank has recently been trying bravely to redress the balance: it has created a 'multilateral debt facility' for the most severely-indebted countries, and devised a numerical scale of national well-being that is more appropriate for the measurement of ecologically sustainable development than GNP per head of population. While these initiatives should not be belittled, good ideas are too often murdered by gangs of ugly facts. Three years ago, at UNCED in Rio, great divides very quickly became evident: north v. south; givers v. takers; even environment v. development. Whenever funding was discussed, another gap appeared: How much? v. How on earth? And while astronomical figures were produced in response to the former question, the latter - to this day has not been satifactorily answered. True, percentages of GNPs were 'pledged' at the time by developed countries, and GEF was touted as the answer to the developing world's prayers. But it was not to be. And why not? One of the reasons, the present writer argues, was that a key fraternity in the world's business community did not take part in the planning process. International bank lending is now measured in US trillions (millions of millions) of dollars, and the global capital market in tens of such trillions. Central banks, commercial banks, and even private banks, world-wide, have a part to play in the development of every single financial transaction that services this huge sector. Banks - at any rate in the developed world - are now learning that they can, and indeed must, become involved in thee conservation of The Biosphere on one hand*, and in the furthering of the development process on the other. Internal studies, leading, for example, to energy-saving, are being translated into advice for customers; EIAs, in line with local environmental requirements, are being created, with a view to their eventually becoming a sine qua non in all lending and investment operations. Banks are cutting their way through the thickets of environmental law as applied, for example, to the situation in which they suddenly become unwilling possessors (by way of mort gage) of polluted real estate. Most exciting, perhaps, is the vision that, after assembling a sufficient store of knowledge on the subject, local banks in developing countries will be prepared and able to take over the role of multilateral institutions in financing innovative development projects in their own environments. This paper is a measure of the progress in this direction which banks have made to date. 'How can you say the poor are not credit-worthy?' was a rhetorical question recently posed by Mr Muhammad Yunus, founder of the Grameen Bank, which is acknowledged as the world's leader in 'micro-lending' (to the least-privileged families of one the world's poorest countries, Bangladesh). 'The basic question', he ventured, 'is whether banks and credit institutions are people-worthy'.
