In 1974, Professor Muhammad Yunus, 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 $27 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.In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below.
Muhammad Yunus: Well first of all the United States is a very important country in the world. Everybody has to look up to the United States for the leadership because technologically, economically, politically it’s such an important country in the whole world. It’s the number one country that way. When your presidential primaries go on, the whole world watches it and discusses about it in every single café. In every single place people meet, they are talking about the election in the United States. So that’s the importance, because your election is not simply election in a particular country. It has an impact for the whole globe. So that’s a role that you have already in your very existence. What do we expect? That the United States lead the world in a peace situation. It doesn’t go into wars. Because if United States gets into war, the whole world gets into trouble. So we wouldn’t like that to happen to the United States. It’s not a war maker. It’s a peacemaker, because the United States is one country which can really bring peace. Wherever the trouble spot is, their influence can bring peace. And that will be most helpful in improving the quality of life for the poor people, because war takes away all the attention. All the action needed to be done for poor people are derailed completely. Iraq war itself has derailed the world so much that we will take years to get back to our position where we wanted to make a beautiful world for ourselves in this new millennium that we just started recently. So this is very important that that thing happens. And then pay attention to the innovative activities which can be used for helping poor people get out of poverty. Ideas like social businesses; ideas like microcredit; ideas like technology . . . information technology, particularly bringing to the poorest people. This is the country which is at the top of the technology world. So if their attention is paid; if a nation can keep on designing one after another enjoyment gadgets – iPods and iPhones and . . . If the same attention is given to the poor people, tremendous kinds of gadgets can be created. Information technology will make the lives of the poor people absolutely easy and absolutely easy to get out of poverty. It’s a question of where we direct your mind. The moment you direct your mind to this poverty issue, the whole world will benefit from that. The poor and the number of poor will decline very sharply. And if young people in this county can be encouraged that this is an issue that we can play a very important role, and these are the areas that we can play an important role in designing that kind of social businesses; wherever we see a problem, what kind of social business can be designed? What kind of technology we can bring to the poorest person so that he and she is empowered to use her talent, her creativity to take . . . to change her life. What kind of resources can flow? If the United States wants to put money . . . individual money, not government money . . . Government foreign aid is important, but that’s a different kind of . . . important private money, individuals’ money can come. It can change the participation completely if that money is used properly in terms of microcredit, in terms of social business. That would be a tremendous help in terms of technology, design; in terms of holding competitions to bring newer and newer designs; involving the whole world to participate into it. The United States can play a tremendous amount of leadership role. Particularly young people in this country can play a very vital role in providing that leadership.
Recorded on: 1/23/08