Envisioning a Better Future for the Destitute

Muhammad Yunus is a practical visionary who has improved the lives of millions of people in his native Bangladesh and elsewhere in the world. “Banker to the Poor,” his well-reasoned yet passionate autobiography, tells how in the 1970s he founded the Grameen Bank in Bangladesh to provide loans of just a few dollars to poor people so they could finance their businesses in making mats and bamboo stools, husking rice, raising fish, repairing radios--the simple tasks of the very poor in one of the poorest countries on Earth.

Met at first with resistance and suspicion by local bankers and government agents, Yunus eventually prevailed and won the grudging respect of financial and political leaders for making lasting improvements in the lives of the poorest people in a country that Henry Kissinger once referred to as “a basketcase.”

Yunus faced similar resistance from world financial institutions like the World Bank when he tried to spread the good news of his gospel beyond Bangladesh to other nations and their poor. Your method can only work in Bangladesh due to the special conditions there, he was told, just as he had been told in Bangladesh that his ideas wouldn’t work beyond his native district of Chittagong.

Not so, he said, the poor in every country are more similar than different, and to this day he is demonstrating that he is right.

Grameen comes from “gram,” the Bangla word for village, and means “rural” or “of the village.” That name is apt. Yunus’ concept of the bank is one based upon the very smallest elements of a poor economy. The first loan of his experimental approach was for $27 to help a group of villagers escape the bondage of usurious interest rates that kept them in debt to moneylenders.

In Yunus’ loan system, groups of five people vouch for each other and agree to borrow small amounts of money, to be paid back starting immediately, at the low interest rate of 2%. The borrowers are more often than not illiterate, and most often are women. Yunus believes that women are better suited by experience than men to build new lives for themselves.

In the country’s Islamic culture, poor women were regarded as unfit to handle money, and they and the men had to be cajoled by Yunus into believing they were able to use money. The “bankers,” sent by Yunus out to the villages to organize the five-person groups, are usually young, idealistic Bangladeshis with some education.

In Bangladesh, cyclones and floods come regularly. Yunus says that the bank has grown adept at helping people rebuild much faster and more efficiently than the national and international aid efforts, which arrive too late and too often are corrupted.

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Yunus tells with verve the story of his life and the journey he took to arrive at his economic views. Born in 1940, he studied at Vanderbilt University on a Fulbright scholarship and became head of the economics department at Chittagong University in 1972. It was there that he decided that the theoretical economics he had learned did not address the economic situation of the villagers.

He believes that by using the principles of “micro-credit” he has developed, the world can become “poverty free,” just as it is becoming polio free and apartheid free and slavery free.

One of his principles is that state-imposed action to lift the poor from poverty will not work. Governments tend to work for the benefit of the governors, not the people they purport to help. But neither, he says, will unbridled capitalism bring relief to the poor, for it further enriches those who have money and power. Growth and development are not synonymous, he argues.

Using an awkward phrase, he argues for economic policy that is neither of the left nor the right but “socially consciousness driven.” He points to the record: By the end of 1998, Grameen was assisting 2.4 million in Bangladesh and an estimated 10 million worldwide. Its principles are being applied in countries as diverse as Norway and Peru, and Grameen USA has been established to promote micro-lending among poor Americans.

As “Banker to the Poor” shows, Yunus’ basic principle is this: All human beings are alike in their desire to control their own destinies, if only they can acquire the means.