From among the list of recent Nobel Peace prize winners, I think this year's choice of Grameen Bank's Muhammad Yunus has been the least about political-correctness. It reveals tremendous insight into what the world needs today -- vision, an egalitarian economy, the will to make a difference.
I am reproducing below an old article because it says pretty much what I continue to believe in. Some figures may have changed, though...
Can one person make a difference? How many times have we struggled with this thought when we feel inadequate or helpless, when we look at everything under a microscope rather than with the naked eye.
When we see poverty we shudder or put our bit into a magic box hoping the scourge will disappear by the time we have powdered our noses. Or perhaps we don’t really want it to; we’d just like it to be a little less visible. We’d like someone to grovel at our feet.
“This is again an example of writing the cheque. You stay there, okay, and I’ll take care of you – that is what these societies are telling their poor. But they don’t need handouts, they need opportunity, a fair deal.”
Who said this? Of course, a developmental economist. He broke through the academic walls to face reality, change it. Prof. Muhammad Yunus left his teaching job in the US and headed the economics department of Chittagong University just after the Bangladesh War.
He suddenly found that Independence chose its own favoured sons and theories he taught had nothing to do with the world he lived in. He walked the villages. Once he met a woman who after a hard day’s work managed to make only two pennies because she was caught in the borrow-for-raw-material trap. He scoured around and found many others in a similar predicament: 42 women who would just need the equivalent of $30 to make a living.
He fished out the money from his pocket but he knew this was no solution. There had to be an institutionalised set-up. He approached banks. They asked for collateral. He realised that most banks work like charitable institutions for the rich; if you are wealthy enough to provide guarantee, do you really need the money? He was also against the idea of a guarantor from the village – the poor would become his slave as much as they were of money-lenders.
Yunus chose to become the guarantor, and with $500 he loaned, recovered and thrived. Then he asked the banks to take over. They said it wouldn’t work on a large scale. Again, he did it on his own. In 1983, Grameen Bank was born to cater to landless, assetless people. It has one million borrowers covered in 23,000 villages, which is a third of Bangladesh’s rural areas. Each borrower is also a shareholder.
The obvious question is, do they return the money? The recovery rate is 98 per cent. And this is because Grameen trusts them. It goes to them. And they feel important, in charge of their lives, confident enough to take up the challenge together with the loan which expects repayment with 16 per cent interest.
This has been the bank’s greatest success. Money-borrowing has only been a small part of it. The main aspect is that it has given these people the concept of self-employment. In a country where only a third of the population can find employment, where would that leave the rest? This is what saddened Yunus: “Our economic theory begins with the firm and how much it can produce, how much labour it must employ, how much wage it must pay etc. Why should I be at the mercy of somebody else? I’m a creative person. I can find a way of seeing how to make a living. But that economists have completely lost sight of.”
Together with that they learn to work as a team and this has been made possible because when a person goes to get a loan, it has to be in a group of five; the two most needy will get the money and the three others will act as monitors. The premise being that if they shirk on repayment the group will be under suspicion for further loans. It works because, “when you’re part of a group, you try to do things which will make everybody a winner – you want to do something together that your friends outside your group will appreciate.”
Grameen acts as watchdog in other ways too. It develops social consciousness. Since 92 per cent of its borrowers are women (a fact that has been encouraged after seeing that income from feudal enterprise goes into children’s education and improving the household) messages are easily understood. One is no dowry will be given or taken. As the Grameen family has grown, they don't need to look outside; they marry amongst themselves!
Earlier husbands did not like it too much, but they soon realised where they stood. As the women worked from home, they could get housing loans to protect them from the monsoons.
The bank has taught them about greening (it is one of the largest seedling sellers in the country), about malnutrition, about the future. “Now Grameen has put them in a situation in which they can see the tomorrow and prepare for it.”
If all this sounds wonderful, it is because the scheme has had to face opposition, frustrations and yet stay afloat.
The Leftists argued: “Grameen is a Capitalist conspiracy to destroy prospects of a revolution; to give opium and divert people’s attention from political issues.”
The mullahs ranted, “Grameen is anti-religious. It encourages women to take money and enter a man’s world.”
The professionals said: “Grameen is not concerned about jobless men.”
Yunus realised that working among the poor meant having to ask more questions than coming up with pat answers. To him development has never been jets, highways, and fancy buildings. “If you want an index of development, I would say take per capita sets of clothing or food intake for the bottom 50 per cent. We meet women in Bangladesh who cannot come out of the house because she has washed the clothes she was wearing. To that person to have a change of clothes opens the whole world and re-establishes her dignity.”
Dignity never comes with dramatic flourishes. In a world where banks stay open at night, offer to come to your doorstep, and lure you with enticing schemes only because you can anyway afford it all, Grameen has been doing all this not to help people drive in their limos to withdraw urgent cash to blow up at the night club, but to take away the terror from those whose minds could not fathom that someone could give them money to be able to eat more than one meal and dream of the next.
We, with our foreign bank accounts inundated with colourful mailers, may not even think about such things. But honestly, if there was a bank that cut the spiel and gave me just a dream, I’d put my money on it, not just in it.
(First published in the Mid-day issue of April 9, 1999)