Nobel Peace laureate, Muhammad Yunus, the author, started the
Grameen (i.e. Rural) Bank in 1983 vowing to lend to the poorest of the poor. In
June 2007 the Grameen Bank had7.31 million borrowers, 97 percent of whom are
women, who manage a repayment rate of 98.61 percent, a figure beyond the
wildest dreams of any conventional bank. Muhammad Yunus paints a stark picture
of poverty in Bangla Desh and the harsh conditions under which the poor have to
survive. He is scathing in his judgment of the aid establishment and its
distorted priorities. Yunus grew up a fun loving youngster in a simple middle
class family of nine children, a talented mother and a businessman father.
After college he got Fulbright scholarship to do a doctoral degree in the US.
His early upbringing had not prepared him for the shock of the America of the
1960s. But he hanged on. He returned to his country after the Bangla Desh war
of 1971. he realised that poverty was caused by the poor not having access to
the fruits of their own labour.Craftsmen found that any value added or
surpluses that their work generated was swallowed by the middle men who had
lent them money for the raw materials. Yunus felt compelled to change this. He
realised that if persons had access to credit they would find their way out of
poverty. Yunus started by lending to basket weavers. This led to the establishment
of the Grameen Bank. His giving credit to poor women met extraordinary
opposition from men who did not want their wives to get loans, mullahs who
claimed they did not approve of loans, moneylenders who did not like the
competition and even Marxists who said it would thwart the revolution if people
got better off. The bank specialised in unsafe lending practices and
focussed on the poorest of the poor women and had a monthly average loan
disbursement of Taka 4.18 bn ($ 60.54 million) all funded by depositors. No
wonder clones all over the world have come up. Grameen Bank also got involved
with health, insurance, handlooms, fishery and phone services confidently
competing with the ruthless corporate world.
Why did all theories and of
economists and bankers failed to get poor out of their poverty? Yunus exposes
their hypocrisy in taking deposits from poor customers and insisting on
collateral for their loans, limiting themselves to accepted textbook
definitions of what qualified as housing stock, their disdain for self
employment in comparison to job creation by larger firms and their theoretical
sophistry that deprives the poor of a minimum sustenance. The incidents
narrated have touching despondency. Like Gandhiji, Yunus had a direct and close
contact with the poor in Bangla Desh and this provided him with insights and
solutions that are durable, workable and eminently successful. Without
political or ideological mobilisation, he has created a movement by just
calling upon desperately poor women to borrow money. The cost of creating a
self- employment job is only a fraction of what it costs to create a job in the
industrial sector. The book has several lessons for countries like India. The book
was first published in Bangla Desh in 1998. It has only now come to India. A little
too late. Had it come earlier surely Legislation of Development and Financing
would have been rendered better and micro-financing institutions would have
been made more accountable. This is an inspiring story of the micro-finance
movement of Bangla Desh that has turned banking practice on its head. It
certainly shows a tested way of empowering the poor, especially the poor women.