 |
| Muhammad Yunus |
Muhammad Yunus along with The
Grameen Bank won the Nobel Peace Prize in 2006 for helping thousands of poor in
Bangladesh with the capital they needed to begin or expand their small
businesses. Yunus tells how he began a
very successful microfinance business in his book Creating a World Without
Poverty: Social Business and the Future of Capitalism. [(New York: Public Affairs, 2007)].
Yunus’s personal story is
compelling. He was born in East Bengal , later to become Bangladesh ,
and immigrated to the United
States and became an economics professor at Middle Tennessee
State University Bangladesh began its fight for
independence from Pakistan
in the early 1970s Yunus went back to help.
He became a professor in the Economics Department at Chittagong University
Yunus was visiting the village of Jobra
was being threatened by a moneylender for payment. Yunus learned the moneylender was charging
exorbitant interest on small loans to a number of people in the community. Yunus helped the woman and 41 others escape
the clutches of the moneylender for a total of $27 US. The people were so joyful and thankful for
their newfound financial freedom that Yunus knew he wanted to help others in
the same way. Yunus began loaning money on a
small scale to the poor. “And when I
started lending funds to the villagers, I was stunned by the result. The poor paid back their loans, on time,
every time!”
Yunus quickly learned that
most banks would not lend to poor—considering them to be a bad risk. So in 1983 he founded Grameen Bank to serve
poor villagers [The word “grameen” means “village” and was chosen
because of the bank’s mission.]. He declares, “None of us like the idea of
apartheid. We all understand that no one
should suffer because he or she happened to be born in a certain race, class,
or economic condition. But our financial
institutions have created a worldwide system of apartheid without anyone being
horrified by it. If you don’t have
collateral, you are not credit-worthy.
To the banks, you are not acceptable on our side of the world.”
Yunus’ philosophy on helping
the poor is refreshing. He believes,
“The first and foremost task of development is to turn on the engine of
creativity inside each person. Any program
that merely meets the physical needs of a poor person or even provides a job is
not a true development program unless it leads to the unfolding of his or her
creative energy. This is why Grameen
Bank offers the poor not handouts or grants but credit—loans they must repay, with
interest, through their own productive work.
This dynamic makes Grameen Bank sustainable.”
Grameen Bank provides
micro-loans for what it deems are sustainable
businesses. The
borrower must provide a business plan and agree to the bank’s “sixteen
decision”—a set of
guidelines and good principals. Yunus
says, “Microcredit turns on the economic engines among the rejected population
of society. Once a large number of these
tiny engines start working, the stage is set for big things.”
The Grameen Bank has launched
a series of companies Yunus calls “social businesses.” After twenty years of investment the Grameen
family has twenty-five sustainable organizations that provide employment and
services to thousands who would most likely be without both. A few of these companies are: Grameen
(G) Trust, G Uddog (exports handloom products), G Telecom, G Cybernet (ISP), G
Phone (cell phone service), G Health Care Services, G Danone (partnership with
Danone to produce affordable, nutritious foods for the poor). Yunus declares, “I believe that social business has the
potential to lift the struggle to eliminate poverty to a new level. Social business can be a very powerful format
for the private sector, public sector, philanthropists, donors, NGOs, faith
groups, or anybody else.”
Microcredit is now a worldwide
phenomenon with many organizations modeling their programs after Grameen
Bank. The demand for this methodology
training is so great that a separate organization was formed—Grameen Trust—specifically devoted to
training.
The world network Microcredit
Summit Campaign began meeting in 1997 in Washington ,
DC Summit was attended by 3,000 delegates from
137 countries representing microcredit programs of many kinds and sizes. The Microcredit Summit’s two primary goals
were: 1) to ensure that 175 million of the world’s poorest families, especially
the women of those families, are receiving credit for self-employment and other
financial and business services. 2) To
help 100 million families rise above the US $1 per day threshold by 2015. [Microcredit Summit
Campaign, www.microcreditsummit.org
(accessed October 10, 2010 )].
Yunus and
Grameen Bank have led the way to empower and encourage the poor by means of
providing capital through loans. Another unique strategy being employed to help the poor is known as micro-franchising and is the
topic of next week’s blog.
