[Sdpg] Grameen Bank and Book called Banker to the Poor

[Wesley Roe and Marjorie Lakin Erickson]

Grameen Bank, and Book called Banker to the Poor at the bottom of the 
articles an amazing book that  offers solutions that can be carried over to 
the PC community
		wes

http://www.grameen-info.org/

"People say I am crazy, but no one can achieve anything without a dream. 
When you build a house, you can't just assemble a bunch of bricks and 
mortar, you must first have the idea that it can be done. If one is going 
to make headway against poverty, one cannot do business as usual. One must 
be revolutionary and think the unthinkable."

About Grameen
In 1976 when Professor Muhammad Yunus and his colleagues started giving out 
tiny loans under a system which later become known as the Grameen Bank, we 
never imagined that some day we would be reaching hundreds of thousands, 
let alone three million, borrowers. But the capabilities and commitment of 
our staff and borrowers gave us the courage to expand boldly. We hardly 
noticed when we reached milestones like 100,000 borrowers, $ 1 billion 
lent, 2 million borrowers and so forth. Everyone predicted that the quality 
of the services we provided would deteriorate when we reached large 
numbers; yet, in reality, in many ways it improved.

In the late 1980s, we started to think of ways in which we could build on 
the network that our borrowers represented, in order to accelerate their 
progress towards a poverty-free world and also improve Bangladesh's overall 
economic performance. So, in the beginning, we got involved in leasing 
unutilized and underutilized fishing ponds and irrigation pumps such as 
deep tubewells. At about the same time, we also became involved in 
providing training and other support to people from other third world 
countries who wanted to adapt the Grameen methodology.

After some initial successes in the fisheries and irrigation projects, we 
became interested in expanding our work by getting involved in other 
busines in various new sectors. By this time, carrying out all these 
initiatives under Grameen Bank became unwieldy, and from 1989 we began to 
establish new organizations. The fisheries project became the Grameen 
Fisheries Foundation. The irrigation project became the Grameen Krishi 
Foundation. The international replication and health program were put under 
the Grameen Trust.

As we moved forward, we gained confidence and became more and more bold in 
our non-banking activities. Independently from Grameen Bank ,we became 
involved in venture capital, the textile industry, an Internet service 
provider and much more. Each new initiative was incorporated in an 
extending organization or spun off into a new one. This became what we call 
the Grameen Family of Organizations.

We welcome people and organizations from all over the world to contact us 
and let us know how they would like to work in partnership with our 
existing organizations and/or propose new ideas that may lead to new 
business ideas which fulfill the social development objectives and 
organizations in the Grameen Family.

PROFESSOR MUHAMMAD YUNUS



As founder of the Grameen Movement, Professor Muhammad Yunus is a 
revolutionary. His ideas couple capitalism with social responsibility and 
have changed the face of rural economic and social development forever.

Professor Yunus is responsible for many innovative programs benefiting the 
rural poor. In 1974, he pioneered the idea of Gram Sarker (village 
government) as a form of local government based on the participation of 
rural people. This concept proved successful and was adopted by the 
Bangladeshi government in 1980. In 1978, he received the President's award 
for Tebhaga Khamar (a system of cooperative three-share farming, which the 
Bangladeshi government adopted as the Packaged Input Program in 1977).

A Fulbright Scholar at Vanderbilt University, Professor Yunus received his 
Ph.D. in Economics in 1969. Later that year, he became an assistant 
professor of Economics at Middle Tennessee State University, before 
returning to Bangladesh where he joined the Economics Department at 
Chittagong University.

The UN secretary general appointed Professor Yunus to the International 
Advisory Group for the Fourth World Conference on Women in Beijing from 
1993 to 1995. Professor Yunus has also served on the Global Commission of 
Women's Health (1993-1995), the Advisory Council for Sustainable Economic 
Development (1993-present), and the UN Expert Group on Women and Finance. 
He also serves as the chair of the Policy Advisory Group (PAG) of 
Consultative Group to Assist the Poorest (CGAP). Yunus has also served on 
many committees and commissions dealing with education, population, health, 
disaster prevention, banking, and development programs. He is currently on 
the boards of many international organizations including Amanah Ikhtiar 
Malaysia (a Grameen replication project), the International Rice Research 
Institute in the Philippines, and Credit and Savings for the Poor in 
Malayasia. Professor Yunus also sits on the board of the Calvert World 
Values Fund, the Foundation for International Community Assistance, the 
National Council for Freedom From Hunger, RESULTS and the International 
Council of Ashoka Foundation, all of which are located in the US.

Professor Yunus has received the following International awards: the Ramon 
Magsaysay Award (1984) from Manila; the Aga Khan Award for Architecture 
(1989) from Geneva; the Mohamed Shabdeen Award for Science (1993) from Sri 
Lanka; and the World Food Prize by World Food Prize Foundation (1994) from 
the US. Within Bangladesh, he has received the President's Award (1978), 
Central Bank Award (1985), and the Independence Day Award (1987), the 
nation's highest award

Grameen Foundation USA



The Grameen Foundation-USA is a non-profit, tax exempt organization created 
to collaborate with public and private institutions to achieve the 
long-term goal of eliminating poverty in the United States and throughout 
the world. By promoting a greater understanding of and support for the 
successful anti-poverty programs of the Grameen Bank and related Grameen 
institutions. To know more about Grameen Foundation USA, please visit the 
web site at http://www.grameenfoundation.org

THE GOOD BANKER
Alan Jolis
In The Independent on Sunday Supplement, 5 May 1996

Muhammad Yunus believes that he can eradicate world poverty, all by the use 
of one simple idea. Now the world's leaders are starting to take him 
seriously.

Cynics roll their eyes to the ceiling, but Muhammad Yunus, a 56-year-old 
banker from Bangladesh, is that rare thing: a bona fide visionary. His 
dream, which he is actively pursuing, is the total eradication of poverty 
from the world. "One day," he says confidently, "our grandchildren will go 
to museums to see what poverty was like."

But what is truly amazing about Yunus is not the extravagance of his vision 
but the fact that, after two decades of working in anonymity, his ideas are 
winning converts among the world's top policy-makers. Bill Clinton said in 
his last election campaign that Yunus deserved a Nobel Peace Prize and 
cited his experiment in Bangladesh as a model for rebuilding the inner 
cities of America. Since then, the World Bank has made him the head of its 
advfsory committee to propagate his vision worldwide. He has also won 
countless prizes and accolades: hailed by "Asia Week" magazine as one of 
the 25 most influential Asians, by the "New York Times" as the star of the 
UN's Women's Conference last year, and by ABC TV as Man of the Week. When 
he's not busy receiving prizes -- the World Food Prize and the Care 
Humanitarian Award among them -- he is escorting Hillary Clinton on a field 
trip to his borrowers or preparing for a visit by Queen Sofia of Spain. In 
July he will come to England to receive an honorary doctorate from Warwick 
University.

What this man has invented that excites so much interest is something 
called micro-credit. It is both terribly simple and, in the field of 
development and aid, completely revolutionary. Rather than donating 
billions to help large infrastructure ventures, Yunus gives loans of as 
little as A320 to the destitute. A typical borrower from his bank would be 
a Bangladeshi woman (94 per cent of the bank's borrowers are women) who has 
never touched money before; all her life, her father and husband will have 
told her she is useless and a burden to the family; finally, widowed or 
divorced, she will have been forced to beg to feed her children. Yunus 
lends her money -- and doesn't regret it. Kept on the straight and narrow 
by a mixture of peer pressure and peer support, she uses the loan to buy an 
asset which can immediately start paying income -- such as cotton to weave, 
or raw materials for bangles or a cow she can milk. She repays the loan in 
tiny weekly instalments until she becomes self-sufficient. Then, if she 
wants, she can take out a new, larger loan. Either way, she is no longer poor.

His bank provides no training, no education, no infrastructure for its 
clients. "I firmly believe that all human beings have an innate skill," 
says Yunus. "I call it the survival skill. The fact that the poor are alive 
is proof of their ability. We do not need to teach them how to survive: 
They know this already. Giving the poor credit allows them to put into 
practice the skills they already know. And the cash they earn is then a 
tool, a key that unlocks a host of other problems."

The Grameen Bank ("rural bank" in Bengali), which Yunus has built over the 
last 20 years, is today the largest rural banbk in Bangladesh. It has over 
2 million borrowers and works in 35,000 villages throughout the country. 
Assuming that each borrower has six dependents, it is possible that 10 per 
cent of the population of Bangladesh (or 12 million people) now live 
directly from the benefit of Grameen loans. By 1994, the bank had lent a 
total of A3650m; in 1995, it made loans of A3250m. By 1998, it plans to 
increase its lending to A3650m a year. The bank actively seeks out the most 
deprived in Bangladeshi society: beggars, illiterates, widows. Yet it 
claims a loan repayment rate of 99 per cent. Most western banks would be 
delighted with such a bad debt ratio. And, since 92 per cent of its shares 
are owned by the borrowers themselves (the balance is owned by the 
government), it truly is a bank for, and of, the poor. Each borrower is 
issued with one non-tradeable share and has to start a saving scheme as a 
form of insurance against disaster. "What Yunus has achieved is simply 
brilliant," says Bruno Lefevre, who just completed a study of Grameen for 
UNESCO.

The man whose vision has made this all possible is a soft-spoken, 
bespectacled ex-professor, who lives and dresses simply -- he earns only 
A3160 a month and is, in public, unassuming and shy. In private Muhammad 
Yunus is funny, charming and approachable. His best work is done in a 
two-bedroom apartment at the bank's headquarters in Bangladesh's capital, 
Dhaka, where he lives with his wife and 10-year-old daughter, Deena. He 
does not own a car, and, although he was recently persuaded to get a credit 
card for hotel bookings, he has never actually charged anything to it.

Yunus was born in 1940 in Chittagong, the business centre of what was then 
Eastem Bengal. His father, a goldsmith, did well for himself and pushed his 
sons to seek higher education. But his main influence was his mother, Sofia 
Khatun, who had 14 children, of whom five died in childbirth. "Mother 
always helped any poor who knocked on our door," he explains. "Thanks to 
her I always knew I would have a mission in life, though I didn't know what 
form it would take." Tragically, a congenital illness reduced her mental 
abilities in later life.

In 1965, he was awarded a Fulbright scholarship and went to do a PhD at 
Vanderbilt University in Nashville, Tennessee, where he stayed for seven 
years. Returning in 1972 to become the head of the economics department at 
Chittagong University, he found the situation in newly independent 
Bangladesh worsening day by day. Tbc terrible man-made famine of 1974, 
which by some estimates killed 1.5 million Bangladeshis, changed his life 
for ever. "While people were dying of hunger on the streets, I was teaching 
elegant theories of economics. I started hating myself for the arrogance of 
pretending I had answers. We university professors were all so intelligent, 
but we knew absolutely nothing about the poverty surrounding us. Why did 
people who worked 12 hours a day, seven days a week, not have enough food 
to eat? I decided that the poor themselves would be my teachers. I began to 
study them and question them on their lives."

Yunus spent most of 1975 and 1976 leading his students on field trips to 
the nearby village of Jobra. It was easy to see the problem, but what was 
the solution? He introduced improved rice-farming techniques and 
established a farmers' cooperative to irrigate during the dry season. Soon 
he realised that targeting farmers was not helping the truly destitute 
underclass -- the landless, assetless, rural poor.

Then he made his big discovery. One day, interviewing a woman who made 
bamboo stools, he learnt that, because she had no capital of her own, she 
had to borrow the equivalent of 15p to buy raw bamboo for each stool made. 
After repaying the middleman, she kept only a lp profit margin. With the 
help of his graduate students, he discovered 42 other villagers in the same 
predicament.

"Their poverty was not a personal problem due to laziness or lack of 
intelligence, but a structural one: lack of capital. The existing system 
made it certain that the poor could not save a penny and could not invest 
in bettering themselves. Some money-lenders set interest rates as high as 
10 per cent a month, some 10 per cent a week. So, no matter how hard these 
people worked, they would never raise themselves above subsistence level. 
What was needed was to link their work to capital to allow them to amass an 
economic cushion and earn a ready income."

And so the idea of credit for the landless was born. Yunus's first approach 
was to reach into his pocket and lend each of the 42 women the equivalent 
of A317. He set no interest rate and no repayment date: "I didn't think of 
myself as a banker, but as the liberator of 42 families."

Immediately, Yunus saw the impracticality of carrying on in this way, and 
tried to interest banks in institutionalising his gesture by lending to the 
poorest, with no collateral -- Bankers laughed at him, insisting that the 
poor are not "creditworthy". Yunus answered, "How do you know they are not 
creditworthy, if you've never tried? Perhaps it is the banks that are not 
people-worthy?"

Undeterred, he started an experimental project in Jobra, the village he and 
his students had been studying, and staffed it with his graduate students. 
Between 1976 and 1979, his microloans successfully changed the lives of 
around 500 borrowers. But it was hard work combining the project with his 
full-time job as a Professor, and he continued to lobby the state-owned 
Central Bank and the commercial banks to adopt his experiment.

In 1979, the Central Bank was won over and arranged for the Grameen 
project, as it was then called, to be run from the branches of seven 
state-run banks -- initially in one province, and, by 1981, in five. Each 
expansion confirmed the effectivenesss of micro-credit: by 1983, Grameen 
had 59,000 clients in 86 branches. Eventually, Yunus decided to quit 
academia and go it alone. Grameen was incorporated as a separate legal 
institution in 1983, and since then it has moved fast -- some would say too 
fast -- to expand its operations.

------------------------------------------------------------------------

Grameen is not noticeably "bank-like". It does lend money, and it does get 
repaid with interest. But there are no telephones in its branches, no 
typewriters or carpets -- most borrowers are visited by Yunus's staff in 
their villages -- and no loan agreements. Borrowers who are not destitute 
are excluded, and so, usually, are men. Yunus soon discovered that lending 
to women, who traditionally have the least economic opportunity in 
Bangladeshi society, was much more beneficial to whole families; and that 
women were more careful about their debts. All that an assetless and 
landless person must do in order to be eligible for a loan is to prove that 
they understand how Grameen works. Over the years, representatives of the 
borrower-shareholders have agreed with the bank certain principles and 
commitments which they will undertake to help improve their lives and their 
ability to meet their debts. To Westerners these may seem at best 
paternalistic; however, the slogans are chanted enthusiastically by the 
microborrowers. They pledge to abide by "the 16 decisions", a set of 
personal commitments such as "We pledge to send our children to school," 
and "We pledge not to demand or pay dowry for our daughters' marriage." The 
most important of these commitments is to join up with four fellow 
borrowers, none of whom can be a family member, to form a "group". The 
group dynamic provides a borrower with the self-discipline and courage 
needed to enter into these uncharted waters. Peer pressure and peer support 
effectively replace collateral: if one borrower defaults the whole group is 
penalised. The system also saves the bank the costly business of screening 
and monitoring borrowers.

Transactions are kept simple. Loans are always for a year and interest is 
fixed at 20 per cent simple interest, not compounded. Repayment starts the 
second week of the loan which, though it may sound punishing, releases the 
borrower from the need to produce a lump sum at the end of the year -- and 
typically builds her confidence. All loan disbursements and repayments are 
made publicly in "centre meetings" (in front of eight or 10 groups) on a 
weekly basis. in a country steeped in corruption at all levels of 
administration, Grameen prides itself on being as transparent and open as 
possible.
------------------------------------------------------------------------
Hajeera Begum was born in 1959, in a village not far from Dhaka. Her 
father, a farm labourer, could not feed his six daughters, and he married 
her off to a blind man simply because he demanded no dowry. Hajeera and her 
husband survived on what little she earned cleaning houses, but she was 
unable to feed her three children regularly. One day she asked her husband 
for permission to join Grameen, but he had heard it was a Christian front 
organisation bent on destroying Islam. He threatened to divorce her if she 
joined.

Without telling anyone, she travelled to a nearby village and attended some 
introductory sessions where Grameen workers explained the principles of the 
bank. The first time the members of the group she had joined took the oral 
exam to show they knew the rules of Grameen, Hajeera was so nervous that 
she couldn't answer the questions. "All my life I was told I was no good. I 
was told I brought only misery to my parents because I was a woman and my 
family could not pay for my dowry. Many times I heard my mother say she 
should have killed me at birth. I did not feel I was worthy of a loan, or 
that I could ever repay it."

She would have given up, but the other members of her group encouraged her, 
and she passed the exam. At last the day came when she mustered the 
strength to ask for a loan of 2,000 thaka ( A335). When she received it, 
tears ran down her face. Her group persuaded her to use the loan to buy a 
calf for fattening and a share of the rice harvest to process and sell. 
When her father brought the calf to the house, her husband was so excited 
that he forgot his threat of divorcing.

Within a year Hajeera had paid off her first loan, taken a second loan and 
used it to rent a piece of land, planted it with 70 banana seedlings, and 
used the balance to buy a second calf. Today, with a mortgage, she owns a 
rice field, and goats, ducks and chickens. "We now enjoy three meals a 
day," says Hajeera. "We can even afford some meat once a week. I intend to 
send all three of my children to school and college, even university. You 
ask what I think of Grameen? Grameen is like my mother. She has given me 
new life."
------------------------------------------------------------------------
Independent studies by the World Bank and others indicate that within five 
years, about half Grameen's 2 million borrowers manage to pull themselves 
up over the poverty line, while a further quarter hover near the line. In 
addition, studies of the Grameen method suggest that after a wife joins the 
bank, her husband is likely to show her more tenderness and respect. 
Divorce rates drop among Grameen borrowers, as do birth rates.

Why does micro-credit work? What theoretical framework does it rely on? 
Yunus avoids jargon and graphs; instead, he states simply: "Poverty covers 
people in a thick crust and makes the poor appear stupid and without 
initiative. Yet if you give them credit, they will slowly come back to 
life. Even those who seemingly have no conceptual thought, no ability to 
think of yesterday or tomorrow, are in fact quite intelligent and expert at 
the art of survival. Credit is the key that unlocks their humanity."

That is not to say that micro-credit solves all problems. One quarter of 
Grameen borrowers do not manage to repay their loans and remain trapped in 
poverty, often -- like the woman I met recently who had been featured four 
years ago on an American television programme as a "Grameen success story " 
-- because they are too sick or infirm. It is this 25 per cent which is now 
giving Yunus the most worry; often, he believes, problems arise from the 
lack of social infrastructure.

Meanwhile, critics of Grameen abound. The most vocal are the 
fundamentalists who believe the bank is anti-Islamic. These conservatives 
regularly spread wild rumours about Grameen: Hajeera Begum's blind husband 
was told that if she joined Grameen she would secretly be forced to abandon 
her faith. I also heard of women being told that Grameen would turn them 
into Christians and feed them to the tigers; or that they would be 
tortured, tattooed on the arm and sold into prostitution. One woman was 
beaten repeatedly by her family to prevent her from joining in 1987, while 
in 1994, in the conservative north-west of the country, a branch of Grameen 
was burnt down.

Yunus denies that he is in an undeclared war with Islam. Indeed, Grameen 
claims to be more Islamic than ordinary banks, because it builds up 
self-employment, instead of forcing women to seek factory jobs away from 
their families. Furthermore, it does not violate lslam's ban on charging 
interest because its borrowers own the bank, so that in essence they are 
paying interest to themselves. When opponents try to prevent Grameen from 
entering a village, his staff have orders to remain outside, avoiding 
confrontation, and wait for the women to come to them.

Another frequent criticism is that Grameen charges too much interest 
initially 16 per cent and for the last four years 20 per cent. Yunus's 
answer is simple: if anyone can run a bank for the poor and charge less, 
please go ahead and do so. He has promised to reduce interest rates if and 
when he can. This is significant, because in l995, for the first time in 
its existence, Grameen finally made enough profit to operate on a fully 
commercial basis without the need for any more preferential loans (which it 
has received in the past from Bangladesh's Central Bank and sympathetic 
banks in the West), or grants from charitable trusts such as the Ford 
Foundation. Yunus also intends to pay cash dividends to his borrowers.

Within the international development community, many people working in 
traditional aid agencies distrust Yunus's self-help philosophy. They argue 
that what keeps poor people trapped is inadequate social and welfare 
policies. It isn't micro-loans that are going to bring water, sanitation, 
health care and schools to desperate communities. The success of 
microcredit is distracting governments from their responsibilities, they 
say. Even those who generally approve of him sometimes ask why Yunus's 
programme needs to be profit-making at all.

Yunus answers this last point with the observation that any institution for 
the poor that is not self-sufficient is bound to be hurt by reliance on 
donors: "It is like telling a patient that he can breathe by himself for 23 
hours a day, and the balance of the time the govemment will provide the 
oxygen. That means you are at their mercy. Any time a politician changes 
his mind, or a bureaucrat forgets, you die." Many aid programmes, he says, 
are just trying to make poverty tolerable rather than to eliminate it.

Despite the opposition, Yunus's method is gathering supporters. Grameen is 
being copied in 52 countries. The methods are adapted to suit local 
conditions, but the solution of creating a counter-culture that empowers 
individuals with their own capital is the same.

The United States alone has over 500 Grameen spin-offs. Englewood is a 
murderous crack-ridden ghetto on the south side of.Chicago, where you would 
never imagine a Bengali professor would have any role to play. But the Full 
Circle Fund, a Grameen clone created by the city's South Shore Bank, has 
operated there for 10 years. Here the borrowers are mostly welfare mothers: 
they take out loans of as little as $375 ( A3250) to buy nail-sculpting 
boxes; they start beauty salons, make and sell jewellery, open bookstores, 
create daycare centres and rehabilitate buildings. In Chicago dowries are 
not an issue but, as part of joining FCF, borrowers pledge not to waste 
money on expensive funerals.
------------------------------------------------------------------------
The bank has entered into an arrangement with the Governor of Illinois so 
that borrowers can continue to receive welfare benefits in the transitional 
period until they become self-reliant. To see women weep for joy when they 
inform the authorities that they no longer need welfare is a moving 
experience.

Group solidarity works well in America's black ghettos, on Indian 
reservations, in rural Arkansas -- wherever the social life of the poor is 
tightly knit. But in many urban settings in the West the lack of it has 
been the greatest stumbling block to the Grameen method. Maria Nowak, a 
worker for the World Bank who has set up Grameen replicas in Albania and in 
Bosnia, has not had the same success in France, where she is based. "Ther e 
is simply no solidarity among the poorest of the poor here," she says. "Why 
would a Zairean tortured in prison in her country and now living in Paris 
care about a fellow borrower living in a train station out of garbage bags? 
There is not enough social fabric left on which to hook the group 
solidarity." But even replicators in Asia and Africa report that it is more 
difficult to make microcredit work in urban areas, especially among those 
who have no fixed address and thus few links to their neighbours.

Yunus does not pretend to have solution for all problems. What he does say 
ts that by creating wealth in the countryside, Grameen can reduce the 
pressure on those moving to the urban slums. He also points to the success 
of the newly formed Shokhti Foundation, which has 118,000 micro-loan 
borrowers in the shanty towns of Dhaka; and to the Self Employed Women's 
Association (SEWA), which has many more in Indian cities.

It has also been suggested that microcredit cannot flourish in Westem 
countries without Bangladesh's long history of self-employment. But Yunus 
believes that self-employment is the future. He has visited China, where 
Grameen loans have helped starving peasants who have too little to keep 
warm in winter; he has travelled to South Africa and met with the poor who 
jump at the chance to start their own car repair workshop or timber-sawing 
business, or plant wheat. All this has convinced him that, as Jan Piercy, 
US Executive Director of the World Bank, puts it: "Creating jobs requires 
huge investment, management, overheads ... It is extremely complex and 
time-consuming to set up, whereas self-employment is inunediate. It may be 
tiny, but each tiny bit contributed by the millions adds up."
------------------------------------------------------------------------
It is Yunus's very pragmatism, and his refusal to be cornered by ideology, 
which his supporters say may prevent him from getting the Nobel Prize for 
economics -- which usually rewards theoretical work. But Yunus is far too 
ambitious for Grameen to worry about a mere prize. What he has set his 
sights on is the total eradication of poverty from the world and to hear 
him discuss it is spine-tingling: "There are 1.2 billon poor in the world. 
Grameen has reached 2 million of them, our copycats service another 1.5 
million in Bangladesh. Our international replicators have 2.5 million 
borrowers. That means so far, counting dependants, we've helped 36 million. 
If we can reach 100 million, that will be a critical mass. The rest will be 
easy.

"People say I am crazy, but no one can achieve anything without a dream. 
When you build a house, you can't just assemble a bunch of bricks and 
mortar, you must first have the idea that it can be done. If one is going 
to make headway against poverty, one cannot do business as usual. One must 
be revolutionary and think the unthinkable."

THE PEOPLE'S FUND was created by Grameen Trust (GT) in 1995 to support the 
Grameen Bank Replication Program all around the world as part of its 
objective to reach the poorest of the poor with microcredit. Grameen Trust 
believes that people can take the lead and show the way for the governments 
and international institutions to mobilize funds for poverty alleviation. 
It wishes to reach one million people who would each contribute $100 to 
fulfill the educational and financial mission of the People's Fund. The 
Grameen Bank Replication Program is aimed at helping to establish, train, 
fund, and support a growing number of poverty-reduction programs modeled 
after the Grameen Bank of Bangladesh in developing countries. It has 
already provided support to 70 micro-credit programs in 28 countries. To 
know more about THE PEOPLE'S FUND, please visit at http://www.peoplesfund.org


BANKER TO THE POOR
Micro-Lending and the Battle against World Poverty

The autobiography of Muhammad Yunus, founder of the Grameen Bank.

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 £ 17 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.

Muhammad Yunus is that rare thing: a bona fide visionary. His dream is the 
total eradication of poverty from the world. 'Grameen', he claims, 'is a 
message of hope, a programme for putting homelessness and destitution in a 
museum so that one day our children will visit it and ask how we could have 
allowed such a terrible thing to go on for so long'. This work is a 
fundamental rethink on the economic relationship between the rich and the 
poor, their rights and their obligations. The World Bank recently 
acknowledged that 'this business approach to the alleviation of poverty has 
allowed millions of individuals to work their way out of poverty with dignity'.

Credit is the last hope left to those faced with absolute poverty. That is 
why Muhammad Yunus believes that the right to credit should be recognized 
as a fundamental human right. It is this struggle and the unique and 
extraordinary methods he invented to combat human despair that Muhammad 
Yunus recounts here with humility and conviction. It is also the view of a 
man familiar with both Eastern and Western cultures — on the failures and 
potential for good of industrial countries. It is an appeal for action: we 
must concentrate on promoting the will to survive and the courage to build 
in the first and most essential element of the economic cycle — Man.

Muhammad Yunus was born in 1940 in Chittagong, the business centre of what 
was then Eastern Bengal. He was the third of 14 children of whom five died 
in infancy. Educated in Chittagong, he was awarded a Fulbright scholarship 
and received his Ph.D. from Vanderbilt University, Nashville, Tennessee. In 
1972 he became head of the Economics Department at Chittagong University. 
He is the founder and managing director of the Grameen Bank. In 1997, 
Professor Yunus led the world’s first Micro Credit Summit in Washington, DC.

Alan Jolis, co-author of Banker to the Poor, is an American journalist and 
writer, now living in Sweden. His books include Love and Terror, Speak 
Sunlight (a memoir of childhood) and several children’s novels. He is a 
contributor to Vogue, Architectural Digest, the Wall Street Journal, the 
International Herald Tribune and other periodicals.

If I could be useful to another human being, even for a day, that would be 
a great thing. It would be greater than all the big thoughts I could have 
at the university.

Muhammad Yunus

I only wish every nation shared Dr Yunus’ and the Grameen Bank’s 
appreciation of the vital role that girls and women play in the economic, 
social and political life of our societies.

US First Lady Hillary Clinton

By giving poor people the power to help themselves, Dr Yunus has offered 
them something far more valuable than a plate of food. He has offered them 
security in its most fundamental form.

Former US President Jimmy Carter





Microcredit Summit
"I am thrilled to see such a turnout for this Summit,which is one of the 
most important gatherings that we could have anywhere in our world."
--Hillary Rodham Clinton (First Lady, United States)

Over 2,900 people, representing 1,500 organizations from 137 countries, 
attended the Microcredit Summit in Washington, D.C., February 2-4, 1997. 
The Summit launched a nine-year campaign to reach 100 million of the 
world's poorest families, especially the women of those families, with 
credit for self-employment and other financial and business services by 
2005. Present at the Microcredit Summit were Prime Ministers and 
Presidents, Queens and First Ladies, Heads of UN Agencies and Donor 
Agencies, Ministers of Governments, leaders in business and finance, and 
hundreds of grassroots leaders from around the world.

The spirit of cooperation and the commitment to action present at the 
Summit was reflected in the Communiqué issued by the Council of Heads of 
State and Government:

"We believe that if we all work together this campaign will become one of 
the great new chapters in human history and will allow tens of millions of 
people to free themselves and their families from the vicious cycle of 
poverty."

More detail information about Microcredit Summit, visit at 
http://www.microcreditsummit.org