Banker To The Poor
I can’t remember the exact date but it was around 1996 when I got to know the name of Prof. Muhammad Yunus for the very first time. I never heard of about him before till my uncle talked and praised about him & his work. One day my Uncle told me that he is going to visit “Kurigram”, a district located in western part of Bangladesh. He was asking me whether I want to go with him just for a visit or not? I just simply denied as I didn’t want to miss my cricket match with my neighborhood friends, which was lot more thrilling than meeting with a Professor at that age. Later on, I got to know that he had to finish some of his project related work that’s why he went to “Kurigram” to see the real life activities of “Grameen Bank”. The Bank that won “Nobel Peace Prize” in 2006 along with “Prof. Muhammad Yunus”. I had to wait ten years to see the accomplishment of Grameen Bank, even though I was not well informed of about Grameen Bank and it’s activities till 2000.
Grameen Bank was founded by Prof. Yunus back in 1983, exactly the same year when I was born. The book “Banker to the Poor” is all about the success story of Grameen Bank & struggle of an Economic’s Professor, who just simply couldn’t figure it out that why the theories of Economics doesn’t match or can’t be applied with the real life scenario of a Poor nation like Bangladesh?
In his book Prof. Yunus started with his native Chittagong district, one of the biggest & busiest city in Bangladesh which is widely known as a Commercial city. He wrote of about his childhood & how he grew up in a conservative Muslim society, where women were literally kept locked once they get married. They barely had any chance to participate themselves with Socio-Economic activities to become a self dependent human being rather than being a Women!
Muhammad Yunus always wanted to be a teacher & he repeatedly admitted that throughout his book and eventually he became one but never thought of becoming a Banker. He was offered a Fulbright Scholarship in 1965 which he accepted & went to United States to earn his Ph.D. from Vanderbilt University. When Yunus left Bangladesh in 1965, it was known as East Pakistan as it didn’t achieve it’s independence by then from West Pakistan. During the time of war in 1971 he openly supported the independence of East Pakistan as he was quite familiar with the unjust attitude of West Pakistan towards the East, even though he was an Anti-War activist.
He came back to his newly born Country “Bangladesh” in 1972, which was still suffering from the damage of the the war. Lawlessness, broken economy of the country & sufferings of the people made him worried. Eventually he discovered that there were too many families around him who barely could have food three times a day & lived below extreme poverty level. While he was teaching in “Chittagong University” as a Professor of Economics he witnessed closely the sufferings of Poor family from nearby village named “Jobra”. He found out that women of most of the families are skilled at making stools from bamboo or at least some sort of handicrafts related work, but they didn’t had just enough money to invest to start up a business. So, those women had to lend money from local moneylender at high interest rate and had to sell their handmade stuff to the same moneylender at a very cheap price. Muhammad Yunus couldn’t agree with that greedy attitude towards poor, so he tired to make them to take loans from Commercial Banks to start-up their business but Banks denied as those women had nothing as collateral.
Prof. Yunus came up with an idea that what about if he give them some money to start up their Business? once they sell their stuff in the market they will pay him back from the portion of their profit. Surprisingly, this idea worked and Prof. Yunus learned that even the poorest of the poor can make it if they are being guided properly and a system could be made that will support them. He made a group of five individuals and asked them to choose one who would be their leader and another one as their secretary. Two person out of five can apply for loan at a time for an specific amount of money and they will deposit 5% of their loan to a fund that could be used later on as a loan which would be interest free. Yunus wrote,
This is the beginning for almost every Grameen borrower. All her life she has been told that she is no good, that she brings only misery to her family, and that they cannot afford to pay her dowry. Many times she hears her mother or her father tell her she should have been killed at birth, aborted, or starved. But today, for the first time in her life, an institution has trusted her with a great sum of money. She promises that she will never let down the institution or herself. She will struggle to make sure that every penny is paid back.
This initial success established an understanding that different approach of Micro lending could be a key to the success for the poor who doesn’t have access to the Commercial Banks for credits. Later on, Prof. Yunus established “Grameen Bank” from his understandings that he didn’t learn from the typical Economic system or at University. A system that we made which is not favorable for the Poor. The strength of Grameen’s concept has proven by it’s 95-98% of recovery rate which is a dream for any Commercial Bank. Still most of the borrower of Grameen Bank are women, who were always been mistreated and underestimated. Rest of the part his book was mostly full with many struggle & success stories of Grameen Bank. He wrote,
But if you go out into the real world, you cannot miss seeing that the poor are poor not because they are untrained or illiterate but because they cannot retain the returns of their labor. They have no control over capital, and it is the ability to control capital that gives people the power to rise out of poverty.
He experienced that conventional Banking system that stands on the ideology of Capitalism is just the mistreatment towards poor. A large number of people from our society are literally abandoned for the well being of few. He said,
I have always believed that the elimination of poverty from the world is a matter of will.
Which does make whole lots of sense when we see “United Nations” adopts “Millennium Development Goals” to alleviate poverty level rather than eliminating it from this world. A systematic way to have poor people around us for all the time is not to eliminate it from it’s roots. Prof. Yunus started with only $27, now based on recent statistics as of 2007 Grameen had 7.34 million borrowers & 97% of them are women. The bank has a staff of over 24,703 employees and 2,468 branches covering more than 80 thousands of village in Bangladesh. From 1998-2007, the recovery rate went 95% to 98.35% which is phenomenal. There are some who often attacked & questioned Grammen’s performance despite it’s huge success. Prof. Yunus also admitted this very truth saying,
Innovation can only sprout in an atmosphere of tolerance, diversity, and curiosity.
Grameen is operating in many part of the world now, including developed nation like United States. I still can remember that very day when Grameen Bank first started it’s operation over here in Queens, New York back in 2008. Now in 2010, Grameen just opened up their another branch in Upper West side of Manhattan, New York. This time I was lucky enough to be there in person to talk with Prof. Yunus & get my books autographed by him. Grameen continues to grow & will grow to make our dream come true, a dream of “Creating A World Without Poverty”.