Bangladeshi economist Muhammad Yunus, who won the prize for his grassroots work to lift millions out of poverty by lending small amounts to the neediest, said his concept could work in a communist state such as North Korea.

“If they would like, I could have a microcredit programme. The leadership is not the whole story of a nation,” Yunus said during a visit to Seoul to accept a separate peace prize awarded to him.

Yunus has not received an invitation from North Korea, which ranks near the bottom of most of the world’s poverty indices, but other communist states such as China and Cuba have sought his help with microcredit.

“If Beijing can take it as a political decision and adopt it as an official policy of the Communist Party of China, I don’t see North Koreans would have any problem,” said Yunus, 66, who set up a new kind of bank in 1976 in Bangladesh to lend to the impoverished, particularly women, enabling them to start small businesses.

He argues that if a woman sells eggs from five chickens, a loan allowing her to buy 50 chickens will increase her family wealth and has minimal risk due to her experience and peer pressure to repay the money.

His Grameen Bank says it has loaned nearly $6 billion to 6.6 million people and has a recovery rate of 99 per cent. Yunus said poverty can lead to “political unrest, economic unrest and desperation, which can be the breeding ground for terrorism”.

The microcredit movement is not for the faint of heart and certainly not for traditional bankers worried about collateral, risks and legalities, he said. “They will be scared to death.”

Yunus wants to use the prize as a springboard to get more people interested in microcredit, a system copied in 100 countries from the US to Uganda.