yunus

BANKER TO THE POOR

MUHAMMAD YUNUS & A. JolisWINNER OF THE 2006 NOBEL PEACE PRIZE

‘It’s not people who aren’t credit-worthy.It’s banks that aren’t people-worthy’Muhammad Yunus‘The story of an extraordinary achievement’Doris Lessing Muhammad Yunus set up the Grameen Bank in Bangladesh to lend tiny sums to the poorest of the poor, who were shunned by ordinary banks. The money would enable themto set up the smallest village enterprises and pull themselves out of poverty.Today, Yunus’s system of ‘micro-credit’ is practised in some sixty countries, and hisGrameen Bank is a billion-pound business acknowledged by world leaders and the WorldBank as a fundamental weapon in the fight against poverty.

Banker to the Poor

is Yunus’s own enthralling story: of how Bangladesh’s terrible 1974famine underlined the need to enable its victims to grow more food; of overcomingscepticism in many governments and in traditional economic thinking; and of how micro-credit was extended into credit unions in the West.‘An amazing account of the way in which one man with a vision and the right values canturn the established order on its ear’ John Elkington,

Guardian

AUTHOR’S PREFACEMy experience working in the Grameen Bank has given me faith; an unshakeable faith inthe creativity of human beings. It leads me to believe that humans are not born to suffer the misery of hunger and poverty. They suffer now as they did in the past because weturn our heads away from this issue.I have come to believe, deeply and firmly, that we can create a poverty-free world, if wewant to. I came to this conclusion not as a product of a pious dream, but as a concreteresult of experience gained in the work of the Grameen Bank.It is not micro-credit alone which will end poverty. Credit is one door through which people can escape from poverty. Many more doors and windows can be created tofacilitate an easy exit. It involves conceptualizing about people differently; it involvesdesigning a new institutional framework consistent with this new conceptualization.Grameen has taught me two things: first, our knowledge base about people and their interactions is still very inadequate; second, each individual person is very important.

Each person has tremendous potential. She or he alone can influence the lives of otherswithin the communities, nations, within and beyond her or his own time.Each of us has much more hidden inside us than we have had a chance to explore. Unlesswe create an environment that enables us to discover the limits of our potential, we willnever know what we have inside of us.But it is solely up to us to decide where we want to go. We are the navigators and pilots”of this planet. If we take our role seriously, we can reach the destination we seek.I want to tell this story because I want you to figure out what it means to you. If you findthe Grameen story credible and appealing, I would like to invite you to join those who believe in the possibility of creating a poverty-free world and have decided to work for it.You may be a revolutionary, a liberal or a conservative, you may be young, or you may be old, but we can all work together on this one issue. Think about it.Muhammad Yunus

PART I: BEGINNINGS

1940-76

From my village bank to the World Bank 1Jobra Village: From Textbook to RealityThe year 1974 was the year which shook me to the core of my being. Bangladesh fellinto the grips of a famine. Newspapers were reporting horrible stories of death and starvation in remote villages anddistrict towns in the north. The university where I taught and served as head of theeconomics department was located in the south-eastern extremity of the country, and atfirst we did not pay too much attention to it. But skeleton-like people started showing upin the railway stations and bus stations of Dhaka. Soon a few dead bodies were reportedin these places. What began as a trickle became a flood of hungry people moving toDhaka.They were everywhere. You couldn’t be sure who was alive and who was dead. They alllooked alike: men, women, children. You couldn’t guess their age. Old people lookedlike children, and children looked like old people.The government opened gruel kitchens to bring people to specified places in town. Butevery new gruel kitchen turned out to have much less capacity than was needed. Newspaper reporters were trying to warn the nation of what was. going on. Researchinstitutions tried to collect information about where all the starving people were comingfrom. Would they ever go back, if they survived? And what was the chance of their surviving?Religious organizations were trying to pick up the dead bodies to bury them with proper religious last rites. But soon the simple act of picking up the dead became a manifestly bigger task than they were equipped to handle.

One could not miss these starving people even if one wanted to. They were everywhere,lying very quiet.They did not chant any slogans. They did not demand anything from us. They did notcondemn us for having delicious food in our homes while they lay down quietly on our doorsteps.There are many ways for people to die, but somehow dying of starvation is the mostunacceptable of all. What a terrible way to die. It happens in slow motion. Second bysecond, the distance between life and death becomes smaller and smaller.At one point, life and death are in such close proximity one can hardly see the difference,and one literally doesn’t know if the mother and child prostrate on the ground are of thisworld or the next. Death happens so quietly, so inexorably, you don’t even hear it.And all this happens because a person does not have a handful of food to eat at eachmeal. In this world of plenty, a single human being does not have the right to a precioushandful. Everybody else all around is eating, but he or she is not. The tiny baby, whodoes not yet understand the mystery of the world, cries and cries, and finally falls asleep,without the milk it needs so badly. The next day maybe it won’t even have the strength tocry.I used to get excited teaching my students how economics theories provided answers toeconomic problems of all types. I got carried away by the beauty and elegance of thesetheories. Now all of a sudden I started having an empty feeling. What good were all theseelegant theories when people died of starvation on pavements and on doorsteps?My classroom now seemed to me like a cinema where you could relax because you knewthat the good guy in the film would ultimately win. In the classroom I knew, right fromthe beginning, that each economic problem would have an elegant ending. But when Icame out of the classroom I was faced with the real world. Here, good guys weremercilessly beaten and trampled. I saw daily life getting worse, and the poor getting ever poorer. For them death through starvation looked to be their only destiny.Where was the economic theory which reflected their real life? How could I go on tellingmy students make-believe stories in the name of economics?I wanted to run away from these theories, from my textbooks. I felt I had to escape fromacademic life. I wanted to understand the reality around a poor person’s existence anddiscover the real-life economics that were played out every day in the neighbouringvillage - Jobra.I was lucky that Jobra was close to the campus. Field Marshal Ayub Khan, the thenPresident of Pakistan, had taken power in a military

coup

in 1958 and ruled until 1969 asa military dictator; because of his strong distaste for students, whom he consideredtroublemakers, he decided that all universities founded during his rule had to be locatedaway from urban areas so that students would not be able to disrupt the centres of population with their political agitation.Chittagong University was one of the universities founded during his regime. The sitechosen was in a hilly section of Chittagong District, next to Jobra village.I decided I would become a student all over again, and Jobra would be my university.The people of Jobra would be my teachers.