Banker to the Poor by Muhammad Yunus

Banker to the PoorAs a person who wishes to contribute something to the world in her small ways, I’m always on the lookout for a good cause to support. I heard of Muhammad Yunus many years ago from a friend who shared about a website called Kiva, in which upon a quick browse I first heard about micro-lending. I knew roughly what it was about but never got around to read about it.

Muhammad Yunus and Grameen Bank (the micro-finance bank he built) won the Nobel Peace Prize in 2006, and since then he came to my attention over and over again, though only until a few weeks ago I managed to set a time to read his autobiography, in which he tells you everything about micro-lending and the battle against world poverty.

Poverty is a subject that is close to me, having been born and lived most of my life in third world country, where poverty is not a problem in the other part of the world, but very real, very close, that I saw every single day. But as life would have it, I’m not someone who works in vital sectors, like doctors, economists, lawyers, teachers, or politicians. I work in entertainment industry. So I guess learning about problems of the world and contributing a small portion of my earning would be as far as I can go. Anyway, that’s food for thought for another day.

Muhammad Yunus though, was exactly in the perfect position to make a difference. He’s a Bangladeshi from a well-off family, had a chance to study in US, and became a professor of a respectable University in Bangladesh. He’s highly intelligent, has very strong concern for humanity, and is well connected because of his position and upbringing. And boy did he make a difference.

The idea was born one day in 1976 when he loaned $27 from his own pocket to 42 people living in a tiny village. By lending the small amount of money, they were able to buy raw materials for their trades. What he found later on was that the poor only needs to be given a chance to lift themselves out of the death circle of poverty. By lending a small amount of money and encouraging them to be micro-entrepreneurs, they are able to help themselves. These people have managed to live with such minimum resources. Imagine what they can do given even the smallest window of opportunity. The possibility is limitless.

When you hear a success story of somebody, you often forget that there’s an enormous amount of time and energy to get them to where they are. When I heard Muhammad Yunus winning the Nobel Prize, I imagined a smart professor solving world problems with his almighty brains. But I did not imagine the little things he had to go through physically: going to house after house in a small village, day after day trying to gain the villagers’ trust, to convince them to borrow money and give it a go, rain or shine, literally. There was an occasion when it was downpour raining and he had to wait outside because it was against the custom for a non-relative male to be in the house without the men of the family. So the women lent him an umbrella while he was sitting at the gate of the house, while one of his female students played messenger, going back and forth between the house and the gate. His first “office” did not even have a lavatory since he started with very little money in a tiny village. When nature called he had to go to his neighbour. These are just ones of many little things that brought tears to my eyes. There is someone in this world, willing to go through so much, so his fellow human beings could have better lives. Not just by making up high theories in the comfort of his room, but by diving head first into the center of the problem, to the lowest of the lowest of society. It restores your faith in humanity. It makes you believe the power of one person to change the world. It makes you believe in all sorts of things.

“How did we define “poverty-free”? After interviewing many borrowers about what a poverty-free life meant to them, we developed a set of ten indicators that our staff and outside evaluators could use to measure whether a family in rural Bangladesh lived a poverty-free life. These indicators are:Muhammad Yunus
1) having a house with tin roof
2) having beds or cots for all members of the family
3) having access to safe drinking water
4) having access to a sanitary latrine
5) having all school-age children attending school
6) having sufficient warm clothing for the winter
7) having mosquito nets
8) having a home vegetable garden
9) having no food shortages, even during the most difficult time of a very difficult year
10) having sufficient income-earning opportunities for all adult members of the family”

How down to earth is he? The goals they set are clear and very realistic. The poverty rate has fallen from 74 percent in mid 1970s to 40 percent in 2005. A ridiculously high achievement for a nation that is often struck by natural disasters and has no great natural resources apart from the hard work of its people.

Professor Yunus is truly one in a million. What a better place he has made the world. My admiration for him has no bound.

5 stars
2003, 277 pp

Kiva – loan as small as $25!
Grameen Bank
Yunus Centre

The Book Nest (review)
Dawn @ she is too fond of books talking about Kiva

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16 thoughts on “Banker to the Poor by Muhammad Yunus”

    1. Nymeth, my thought exactly! If you look at the list it seems to be so simple to be out of poverty line, and yet so many people are there, unable to get out.

  1. This sounds like a good book! I admit, though, I’m skeptical of Yunus. I think micro-lending has caught on like crazy, but I don’t know if I think it’s a good thing… I know a lot of women actually feel significant amounts of stress and face huge bullying from their cohorts and the micro-lending system has more often than you’d like to know led to suicide. Also, is it good to take so long to pay back such a small loan? I don’t know… I think there are two sides to the situation and often the negative side is ignored because people really like the IDEA of micro-lending. Either way, though, he had a great idea :-)

    1. Aarti, sounds like you’re the perfect person to read the book! I had never heard about the suicide, but reading from the book: 1) these poor people are borrowing money anyway, only from local loansharks who are far from fair. The fact is big banks don’t lend such small amount of money because it’s not profitable enough for them. This is where Grameen Bank comes into play. 2) without the loan, they or their family would probably die soon.

      Yunus and his staffs have gone through many trials and errors to find the best measures to execute the idea. For example he insists on borrower to be in a support group of 5, so people in the group could help each other. This is found to be incredibly important. About repayment, like any bank, your repayment capability is assessed by how much money you borrow and how much you earn. Their repayment rate sounds fair to me. For most of us it’s hard to comprehend how someone could take so long to repay $20, but there you go. It IS a wonder why we have people in such extreme poverty in this supposedly advanced world!

      And last, it is NOT just an idea. It is an idea well executed. The book will show you how. I don’t think the negative side is ignored. But I’m thinking the positive outcome far outweighs the negative. Is it more positive to not do anything and let them stay poor and live the way they always do?

  2. This item on the checklist particularly struck me:
    “having no food shortages, even during the most difficult time of a very difficult year”
    That is – no food shortages, no exceptions
    Wow; yes, I take a lot for granted.

    Thanks for linking to my post about the Kiva founder – she is an incredibly poised and well-spoken woman (with a big heart).

  3. We who take food for granted will never understand what it is to be really poor and worrying about the next meal to eat. From where I come from, there are people who are below the poverty line, but I believe every government in the world or NGO can benefit a lot from Yunus’ method of going about in micro-financing. As little as $20 to start teaching about entreprenuerial and financial skills is invaluable.

    Great review, will have to keep this on my TBR.

    1. JoV, yes it’s a great book on a great person with a great idea. Hope you get to read it sometime. Micro-financing has been around before Yunus started apparently, but he was the one that took it flying. Many people from all around the world came to Bangladesh to learn how he and Grameen Bank do it, including from Malaysia and Philippine (also in the book). I’m a bit curious that Indonesia is not mentioned though. I think there might be higher barrier for language there compared to Malaysia or Philippine.

  4. I read Muhammad Yunus’ other book, Creating a World Without Poverty, and I thought it was all really interesting and impressive. I like how he gets large corporations to donate to the cause. I am sure Aarti is correct that there is a lot of downside that we don’t hear about as with most things in life. However, I want to believe that people’s (women’s) lives are also better because of his programs.

    1. Helen, as I understand, Creating a World Without Poverty is his second book. He talks a little bit about it in Banker to the Poor (his first) so I know the concept roughly.

      Yes I agree with you and Aarti that there has to be a downside that we don’t hear about. There’s no perfect solution to everything. But I’m by heart a positive person and Muhammad Yunus definitely is, ridiculously positive, which is what I loved about him. I don’t believe any effort to better people’s lives could make things worse.

  5. Well, where can i start.. this is the first Autobiography i’ve read and it is a damn good one… one of the greatest success stories of previous century and it is motivational in every sense… this story about the success of micro credit and Grameen changes our very perspectives about Financial institutions and Banks…. though Grameen bank does not look to replace normal banks and mutual funds in every level it surely shatters the myth of ubiquitousness and omnipotence of big financial institutions committed to investing in multi billion dollar ventures foolishly expecting the profits to trickle down to poor… the book also strongly criticises the disparity of poor in developing countries and in developed countries, the poor living on welfare trust… it is more committed to lend credit to poor so they themselves will work their way out of poverty… this is the story of how an incredible dream turned into a great reality…

    1. Glad you liked it too Arun, this book is very memorable to me. I got a chance to see Muhammad Yunus himself gave a talk somewhere in the UK last year. He’s very inspiring, in writing or in person!

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