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: If you see only the one side and the one section of it – the misery, hopelessness, and devastations, and disasters, and how terrible the life is at the very bottom, of course you’ll go crazy by seeing that repeatedly. But luckily for me while I see that, at the same time I see the other part. Things that are happening. People are getting happier. Children are going to school. Their children are growing up healthier. The nature of the house is changing. It looks prettier house. It used to be a tattered house; now it’s cleaner house with toilets and drinking water. So I see a tremendous amount of excitement, tremendous amount of ability in human beings even when I’m among the poor persons. The fact that once they make one tiny step, how happy they get. And if you can (35:58) place yourself at a role that you make it happen in some way . . . in some indirect way, you’ll play some role and you’ll feel very happy that you made that happen, and you’ll want to do more. It’s a very intoxicating experience. Once you do some, you’ll want to do more because it’s such a . . . such an experience for yourself. So these are the message that you bring out to people, and you see a lot of people are supporting you. They would like to help. They would like to come up and say, “How do we do more?” And you explain it to them. And many people over these years, now that I’m doing it, many people come up . . . “Do you remember I met you 10 years back, 15 years back and you changed my life and started this? And I’m running a program in this country? I used to work for a bank. I used to work for a company. I left the job and I am doing this.” So that makes me feel happy that I played a role in his life or in her life in making a decision, and she’s enjoying it . . . and he’s enjoying it. That’s the best part of it. So I feel happy. I see both sides of it. Things used to go wrong, very badly. Now things are coming into shape and the processes have started. And the road has been built through which, step-by-step, they are going. In Bangladesh there is a tremendous amount of poverty, but the poverty is declining very steadily so it makes me feel happy. We are one country which will be achieving millennium development goal to reduce poverty by half by 2015. So that’s an exciting thing to happen that you see step-by-step every year we are coming closer and closer to millennium development goal number one – reducing poverty by half. And we are also achieving all other millennium development goals so that by the time we come to 2015, we achieve all the eight millennium development goals. That’s a very happy thing to happen, and we are going to make sure we don’t kind of miss this opportunity to get there. We absolutely want to make sure that all the millennium development goals are achieved in a very comfortable way, not in a kind of last minute rush to that. We go step-by-step. We are right on the track right now. So these are the things which makes me feel very happy.
Recorded on: 1/23/08