The autobiography of Muhammad, founder of the Grameen Bank.
In 1974, Professor Muhammad, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.
Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of £ 17 to 42 basket-weavers. He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty.
Against the advice of banks and government, Yunus carried on giving out 'micro-loans', and in 1983 formed the Grameen Bank, meaning 'village bank' founded on principles of trust and solidarity. In Bangladesh today, Grameen has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 94% are women and over 98% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.
Muhammad is that rare thing: a bona fide visionary. His dream is the total eradication of poverty from the world. 'Grameen', he claims, 'is a message of hope, a programme for putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long'. This work is a fundamental rethink on the economic relationship between the rich and the poor, their rights and their obligations. The World Bank recently acknowledged that 'this business approach to the alleviation of poverty has allowed millions of individuals to work their way out of poverty with dignity'.
Credit is the last hope left to those faced with absolute poverty. That is why Muhammad believes that the right to credit should be recognized as a fundamental human right. It is this struggle and the unique and extraordinary methods he invented to combat human despair that Muhammad recounts here with humility and conviction. It is also the view of a man familiar with both Eastern and Western cultures — on the failures and potential for good of industrial countries. It is an appeal for action: we must concentrate on promoting the will to survive and the courage to build in the first and most essential element of the economic cycle — Man.
Muhammad was born in 1940 in Chittagong, the business centre of what was then Eastern Bengal. He was the third of 14 children of whom five died in infancy. Educated in Chittagong, he was awarded a Fulbright scholarship and received his Ph.D. from Vanderbilt University, Nashville, Tennessee. In 1972 he became head of the Economics Department at Chittagong University. He is the founder and managing director of the Grameen Bank. In 1997, Professor Yunus led the world’s first Micro Credit Summit in Washington, DC.
Alan Jolis, co-author of Banker to the Poor, is an American journalist and writer, now living in Sweden. His books include Love and Terror, Speak Sunlight (a memoir of childhood) and several children’s novels. He is a contributor to Vogue, Architectural Digest, the Wall Street Journal, the International Herald Tribune and other periodicals.
If I could be useful to another human being, even for a day, that would be a great thing. It would be greater than all the big thoughts I could have at the university.
I only wish every nation shared Dr Yunus’ and the Grameen Bank’s appreciation of the vital role that girls and women play in the economic, social and political life of our societies.
US First Lady Hillary Clinton
By giving poor people the power to help themselves, Dr Yunus has offered them something far more valuable than a plate of food. He has offered them security in its most fundamental form.
Former US President Jimmy Carter