BANKER TO THE POOR MUHAMMAD YUNUS & A. Jolis WINNER OF THE 2006 NOBEL PEACE PRIZE ‘It’s not people who aren’t credit-worthy. It’s banks that aren’t people-worthy’ Muhammad Yunus ‘The story of an extraordinary achievement’ Doris Lessing Muhammad Yunus set up the Grameen Bank in Bangladesh to lend tiny sums to the poorest of the poor, who were shunned by ordinary banks. The money would enable them to set up the smallest village enterprises and pull themselves out of poverty. Today, Yunus’s system of ‘micro-credit’ is practised in some sixty countries, and his Grameen Bank is a billion-pound business acknowledged by world leaders and the World Bank as a fundamental weapon in the fight against poverty. Banker to the Poor is Yunus’s own enthralling story: of how Bangladesh’s terrible 1974 famine underlined the need to enable its victims to grow more food; of overcoming scepticism in many governments and in traditional economic thinking; and of how micro- credit was extended into credit unions in the West. ‘An amazing account of the way in which one man with a vision and the right values can turn the established order on its ear’ John Elkington, Guardian AUTHOR’S PREFACE My experience working in the Grameen Bank has given me faith; an unshakeable 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. 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. It is not micro-credit alone which will end poverty. Credit is one door through which people can escape from poverty. Many more doors and windows can be created to facilitate an easy exit. It involves conceptualizing about people differently; it involves designing a new institutional framework consistent with this new conceptualization. Grameen has taught me two things: first, our knowledge base about people and their interactions is still very inadequate; second, 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. 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. But it is solely up to us to decide where we want to go. We are the navigators and pilots” of this planet. If we take our role seriously, we can reach the destination we seek. I want to tell this story because I want you to figure out what it means to you. If you find the Grameen story credible and appealing, I would like to invite you to join those who believe in the possibility of creating a poverty-free world and have decided to work for it. You may be a revolutionary, a liberal or a conservative, you may be young, or you may be old, but we can all work together on this one issue. Think about it. Muhammad Yunus PART I: BEGINNINGS 1940-76 From my village bank to the World Bank 1 Jobra Village: From Textbook to Reality The year 1974 was the year which shook me to the core of my being. Bangladesh fell into the grips of a famine. Newspapers were reporting horrible stories of death and starvation in remote villages and district towns in the north. The university where I taught and served as head of the economics department was located in the south-eastern extremity of the country, and at first we did not pay too much attention to it. But skeleton-like people started showing up in the railway stations and bus stations of Dhaka. Soon a few dead bodies were reported in these places. What began as a trickle became a flood of hungry people moving to Dhaka. They were everywhere. You couldn’t be sure who was alive and who was dead. They all looked alike: men, women, children. You couldn’t guess their age. Old people looked like children, and children looked like old people. The government opened gruel kitchens to bring people to specified places in town. But every new gruel kitchen turned out to have much less capacity than was needed. Newspaper reporters were trying to warn the nation of what was. going on. Research institutions tried to collect information about where all the starving people were coming from. Would they ever go back, if they survived? And what was the chance of their surviving? Religious organizations were trying to pick up the dead bodies to bury them with proper religious last rites. But soon the simple act of picking up the dead became a manifestly bigger task than they were equipped to handle. One could not miss these starving people even if one wanted to. They were everywhere, lying very quiet. They did not chant any slogans. They did not demand anything from us. They did not condemn us for having delicious food in our homes while they lay down quietly on our doorsteps. There are many ways for people to die, but somehow dying of starvation is the most unacceptable of all. What a terrible way to die. It happens in slow motion. Second by second, the distance between life and death becomes smaller and smaller. At one point, life and death are in such close proximity one can hardly see the difference, and one literally doesn’t know if the mother and child prostrate on the ground are of this world or the next. Death happens so quietly, so inexorably, you don’t even hear it. And all this happens because a person does not have a handful of food to eat at each meal. In this world of plenty, a single human being does not have the right to a precious handful. Everybody else all around is eating, but he or she is not. The tiny baby, who does not yet understand the mystery of the world, cries and cries, and finally falls asleep, without the milk it needs so badly. The next day maybe it won’t even have the strength to cry. I used to get excited teaching my students how economics theories provided answers to economic problems of all types. I got carried away by the beauty and elegance of these theories. Now all of a sudden I started having an empty feeling. What good were all these elegant theories when people died of starvation on pavements and on doorsteps? My classroom now seemed to me like a cinema where you could relax because you knew that the good guy in the film would ultimately win. In the classroom I knew, right from the beginning, that each economic problem would have an elegant ending. But when I came out of the classroom I was faced with the real world. Here, good guys were mercilessly beaten and trampled. I saw daily life getting worse, and the poor getting ever poorer. For them death through starvation looked to be their only destiny. Where was the economic theory which reflected their real life? How could I go on telling my students make-believe stories in the name of economics? I wanted to run away from these theories, from my textbooks. I felt I had to escape from academic life. I wanted to understand the reality around a poor person’s existence and discover the real-life economics that were played out every day in the neighbouring village - Jobra. I was lucky that Jobra was close to the campus. Field Marshal Ayub Khan, the then President of Pakistan, had taken power in a military coup in 1958 and ruled until 1969 as a military dictator; because of his strong distaste for students, whom he considered troublemakers, he decided that all universities founded during his rule had to be located away from urban areas so that students would not be able to disrupt the centres of population with their political agitation. Chittagong University was one of the universities founded during his regime. The site chosen was in a hilly section of Chittagong District, next to Jobra village. I decided I would become a student all over again, and Jobra would be my university. The people of Jobra would be my teachers. I promised myself to try and learn everything about the village. I thought I would be fortunate if I could understand the life of one single poor person. This would be a big departure from traditional book learning. By attempting to equip the students with a bird’s eye view, traditional universities had created an enormous distance between students and the reality of life. When you can hold the world in your palm and see it from a bird’s eye view, you tend to become arrogant - you do not realize that when looking from such a great distance, everything becomes blurred, and that you end up imagining rather than really seeing things. I opted for what I called the ‘worm’s eye view’. I thought I should rather look at things at close range and I would see them sharply. If I found some barrier along the way, like a worm, I would go around it, and that way I would certainly achieve my aim and accomplish something.