Banker to the Poor: The Autobiography of Muhammad Yunus
Author: Muhammad Yunus
Banker to the Poor narrates the life of Muhammad Yunus and his conception of the micro-lending institution, Grameen Bank, to provide help to the poor. Yunus had a dream of providing help the poor to be able to help themselves. He believes that if the poor can receive financial help in the form of very small loans and are taught some basic principles of financial management, they will learn to act responsibly and become self-sufficient. Yunus begins to develop this system in 1976 when he meets forty-two women in a small village that make bamboo stools. These women are in need of financial support to purchase raw materials so he loans them $27 of his own money. The women of this village take full advantage of his generosity and put his money to good use to develop a simple yet healthy business from this small loan. On the basis of this experiment, Yunus begins to expand his theories and develops a program, micro-lending, to help wipe out poverty in developing nations. As a result of the social and economic impact of their work, both Yunus and Grameen Bank received the Nobel Peace Prize in 2006.
The overall purpose of this book is a platform for Yunus to share his personal success
story against poverty in this autobiography. Yunus explains the ineffectiveness of charitable donations when compared to micro-lending as he believes credit is a basic human right and that hand-outs only "increases their misery, robs them of incentive and, more important, of self-respect." (Yanus, p. 205) The success of the Grameen Bank in Bangladesh and elsewhere raises some interesting philosophical questions: 1-Should poverty be eliminated in the context of a capitalist economic system or 2-is a socialist solution required? Yunus is aware of these differences and disputes that we should put emphasis on a social-consciousness driven private sector.
Who is Mohammed Yunus?
Born in 1940, Muhammad Yunus grew up in the Bengal Province of British India (currently Bangladesh). Yunus studied economics at Dhaka University receiving a B.A. and M.A. in the field. Afterward, he accepted a Fulbright scholarship in order to study at Vanderbilt University receiving his Ph.D. in economics in 1971. While teaching at Chittagong University, Yunus observed the poverty crisis in the rural villages around Chittagong and initiated change in how lending program were structured which would eventually define his legacy and introduce a new tool to social entrepreneurs, micro-lending. As previously stated, this vision would lead to numerous awards and eventually the Nobel Peace prize in 2006.
Yunus’ vision - Grameen Bank
Yunus was the first person in history to successfully implement the microcredit model which enabled extremely poor people to participate in self-employed projects that allow them to generate an income and, in many cases, begin to build wealth and rid themselves of poverty. This concept gave people who were unemployed, living in poverty, and lacking collateral, steady employment and a verifiable credit history. The micro-credit model also allows people who cannot even meet the most minimal qualifications to traditional credit an opportunity to help themselves. Through this new method, Yunus believed that given a chance, the poor will repay the borrowed money. Relying on nothing but his own faith, the Yunus finally succeeded in securing a loan from the government Janata Bank to lend it to the poor. Grameen Bank continued to operate by securing loans from other banks for its projects and has an astonishing repayment rate of 98%, which is unheard of in traditional loan structures. Early in 1977, when Grameen Bank began, Yunus framed its credit program completely opposite from standard, conventional loans offered by other banks. Rather than require large lump sum loans and payments, the bank launched a daily payment...
Bibliography: Communications, G. (2014, November 2). Grameen Trust. Retrieved November 28, 2014, from Grameen Communications: http://www.grameentrust.org/
Yanus, M. (2003). Banker to the Poor. In M. Yanus, & A. Jolis, Banker to the Poor (p. 273). New York: PublicAffairs.
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