The Banker of The Poor - Muhammad Yunus

Nobel Peace Prize laureate Muhammad Yunus is the founder and managing director of Grameen Bank. He chaired economics at Bangladesh’s Chittagong University.

As a child, Muhammad Yunus was a good student and talented artist. He traveled to other countries as a Boy Scout. After college, he taught economics at a university in Bangladesh and opened a successful business with his father. Studying for a Ph.D. at Vanderbilt University, he became intrigued with the human side of economics. He worked on his Ph.D. under Nicholas Georgescu-Roegen, who taught him “It is only our arrogance that prompts us to find unnecessarily complicated answers to simple problems.”

When Bangladesh declared its independence, Yunus joined the new government and went back to teaching economics, but became increasingly dissatisfied with purely theoretical work. Increasingly uncomfortable teaching abstract theories while starving people shuffled by outside his classroom, Yunus realized his economic education was incomplete. To complete it, he went to local villages to “learn from the poor” about what they actually needed rather than what a textbook said they should have. The answer was credit, so Yunus founded a bank to provide it - Grameen Bank. The name means the ”bank of the village.”

After meeting impoverished village craftsmen who couldn't get credit, Yunus lent them money himself. He then broadened this practice using a loan from a state bank. Yunus learned how to be a banker by doing the opposite of what traditional banks did, particularly making small loans to the poor, women and people with no credit. Loaning money to women, Yunus found, was more effective than loaning to men, women tend to focus on improving their children’s lives while men tend to spend borrowed funds on themselves.

His Grameen Bank began as a branch of a government bank and became an independent multinational institution. Yunus has broadened his work beyond banking, but "microcredit" remains his focus.

What Muhammad Yunus said:

1. To me, an entrepreneur is not an especially gifted person. I rather take the reverse view. I believe that all human beings are potential entrepreneurs.

2. I believe that if we play our cards right, social consciousness driven enterprises can do very well in the marketplace.

3. Without the human side, economics is just as hard and dry as stone.

4. I did not know anything about how to run a bank for the poor, so I had to learn from scratch.

5. The moment we open the door to making a social impact through investments, investors will start putting their investment dollars through this door as well.

6. Human beings are extremely creative and resilient, especially when they are operating within an institutional framework that encourages and supports their actions.

7. I firmly believe that all human beings have an innate skill. I call it the survival skill. The fact that the poor are alive is clear proof of their ability.

8. International development programs in rural areas always focus on farmers and landowners. In Bangladesh, half of the total population is worse off than the marginal farmer.

9. Unlike other commercial bank workers, our staff members grow to consider themselves teachers.

10. Grameen believes in social intervention without government getting involved in running businesses or in providing services.

11. Grameen is against the existing institutional framework. It opposes an economy grounded solely on greed-based enterprises.

12. If Grameen was to work, we had to trust our clients.

13. To me, changing the quality of life of the bottom 50% of the population is the essence of development.

14. I have always believed that the elimination of poverty from the world is a matter of will.

15. My experience working in the Grameen Bank has given me faith; an unshakable faith in the creativity of human beings. It leads me to believe that humans are not born to suffer the misery of hunger and poverty. They suffer now as they did in the past because we turn our heads away from this issue.

16. Before we actually translate something into reality, we must be able to dream about it. Any socioeconomic dream is nothing but the first step in the process of mapping the course to our destination.

17. Poverty does not belong in a civilized human society. Its proper place is in a museum. One day our grandchildren will go to museums to see what poverty was like.

18. We have created a slavery-free world, a smallpox-free world, an apartheid-free world. Creating a poverty-free world would be greater than all these accomplishments while at the same time reinforcing them. This would be a world we could all be proud to live in.

19. Each of us has much more hidden inside us than we have had a chance to explore. Unless we create an environment that enables us to discover the limits of our potential, we will never know what we have inside of us.

20. I did something that challenged the banking world. Conventional banks look for the rich; we look for the absolutely poor. All people are entrepreneurs, but many don't have the opportunity to find that out.

21. We create institutions and policies on the basis of the way we make assumptions about us and others. We accept the fact that we will always have poor people around us. So we have had poor people around us. If we had believed that poverty is unacceptable to us, and that it should not belong to a civilized society, we would have created appropriate institutions and policies to create a poverty-free world.

22. Each individual person is very important. Each person has tremendous potential. She or he alone can influence the lives of others within the communities, nations, within and beyond her or his own time.

23. I have come to believe, deeply and firmly, that we can create a poverty free world if we want to. I came to this conclusion not as a product of a pious dream, but as a concrete result of experience gained in the work of the Grameen Bank.

24. Poverty has been created by the economic and social system that we have designed for the world. It is the institutions that we have built and feel so proud of, which created poverty them.

25. The poor themselves can create a poverty-free world. All we have to do is to free them from the chains that we have put around them.

26. 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.

27. Yunus belief the poor would repay these unsecured loans because the poor know this credit is their only opportunity to break out of poverty. If they fall afoul of this one loan, they will have lost their one and only chance to get out of the rut.