I read this book last semester for my international economics class (and partially on my own accord.) I took the class in an independent study format and since I was already reading the book, and the textbook for the class was pretty worthless, I asked to use it for the class. Thankfully, I found Yunus’ approach to poverty and economics was radically different than that of the dry textbook. He brought economics to life and made it interesting. (I suspect I shall be using his book as a reference for many more posts.)
Yunus’ approach is what is now called microfinance/lending/credit and he started his own bank (Grameen Bank) in order to finance small loans to the poor. His poverty-fighting journey began when he was a professor and realized that in the town nearby there was a large number of people living in poverty. He then began asking himself what the role of university was, and should be, to the community. His conclusion, that the university should be an asset to the community -not a separate entity, empowered him to find ways to help the community as well as teach his students simultaneously. He went out and talked to the poorest of the poor and found that their issue was not that they didn’t have any ideas on how to earn capital, rather they had no initial capital to invest in their ideas. Thus, Yunus impulsively invested in one person’s idea, while symbolically investing in the ideas and futures of poverty-stricken people everywhere.
Since 1983, when Professor Yunus started Grameen, over 3.8 billion dollars have been lent to more than 2.4 million families. He has also won the Nobel Prize and inspired others to start their own micro-credit programs. He started a revolution that is still gaining momentum today, one that is the epitome of creativity. He saw others’ capacity for creativity and was inspired to create a new system to help those people meet their creative potential.
Some of the best side effects from microfinance, however, have not had much to do with economics at all. Because his microfinance institution, along with many others around the world, made it a requirement for borrowers to attend meetings with other borrowers in order to learn from one another, a strong sense of community began to take hold among the borrowers. They learned how to solve each other’s problems and began supporting each other in their respective endeavors.
Remarkably the sense of community has not been confined to those local communities. Given the newer technologies of the day, i.e. the Internet, people from these communities have been able to connect with people around the world who are either struggling with the same issues, are willing to invest in their business, or have never heard of microfinance. In fact, the microfinance movement has reached people who have never given much thought to worldwide poverty, but who, through the use of the Internet, may have their horizons opened by a story of a person whom they’ve never met living in a place like Bangladesh, Honduras, or Ghana.
The microfinance revolution has also had a profound effect on gender equality. In many less-developed countries women are unable to borrow money, work outside the home, or even leave the home without their male guardian’s consent. However, Yunus found that allowing women to be the breadwinners made for a more prosperous family unit. They were more likely to invest in the education of their children, the upkeep of the home, and food. He thus set out to make at least half the loans granted by the Grameen Bank go to women. Today, about 95% of the borrowers are women. These women are better fed, have children that are better cared for, and are not subjugated to domestic violence nearly as often (men tend not to beat women when they are providing them with more income.)
While microfinance does have its drawbacks (more on this in later posts), the way it creatively and constructively looks for lasting solutions to the issues of global poverty, international/community development, and inequality is inspiring people across the globe by giving power to those who have previously had none.