Banker to the Poor

Friday, August 22, 2008

Good grief. I haven't posted since July 5? I've been reading (no surprise here) but just haven't finished that many books. I've been rotating around some non-fiction and theological books lately, and I just need to commit and finish one. But in the meanwhile, here's what I did finish.

Banker to the Poor, by Muhammad Yunus

Muhammad Yunus won the Nobel Peace Prize for the work of his Grameen Bank and microlending program. Usually, it's the simple things that have potential to be revolutionary.

Yunus was an economics professor at a prestigious university in Bangladesh. It bothered him that he was in an ivory tower teaching theory when people in the villages around him lived in bondage to poverty with no way out. He started taking his students to the villages and listening to the people. He realized it wasn't the poor farmers who needed the most help, but those with no land or resources. He started by lending $37 out of his own pocket to a woman so she could buy the supplies to make and sell wooden stools. It evolved into a bank to help those with no resources, no assets, or not even an address. Like in America, how easy do you think it is to secure a bank loan if you have no experience, cosigners, or education? That's where the microloans stepped in.

The program expanded, through much opposition and red tape, to become a global project. I loved hearing about its success. The examples were moving. But I especially loved the respect he gave to his lenders. This muslim man seems to recognize God's breath in humans, and treated them with dignity. Here's an example, explaining why he doesn't require job training before giving loans:

Why give credit first?
I firmly believe that all human beings have innate skill. I call it the survival skill. The fact that the poor are alive is clear proof of their ability. They do not need us to teach them how to survive; they already know how to do this. So rather than waste our time teaching them new skills, we try to make maxiumum use of their existing skills. Giving the poor access to credit allows them to immediately put into practice the skills they already know--to weave, husk rice, raise cows, peddle a rickshaw. And the cash they earn is a tool, a key than unlocks a host of other abilities and allows them to explore their own potential. Often borrowers teach other new techniques that allow them to better use their survival skills. They teach far better than we ever could. (p. 140)

Other features that I loved were:

  • Focusing on giving money to women directly (who in Pakistan often never even touch money) because the women were much more likely to improve the overall health of the family than men.
  • Setting up small groups of borrowers for accountability and mutual help.
  • Focusing on results, not money spent. Each branch of the Grameen Bank must be "poverty-free" within a certain timeframe, as defined by simple things like access to a latrine, having no food shortages even during the most difficult time of a very difficult year, having all school-age children attending school, etc. (p. 202)
  • Near-perfect repayment rates. As the author pointed out, the poor have no other options. The success of the loan changes lives, and if they miss this opportunity, that's it.
  • His disdain for big governement and beauracracy, which really spoke to a conservative/libetarian like me. Remove impediments to people's success, and they will succeed.
The first part of the book tells his story, and the last chapter explains his overall philosophy and hopes for the future. They are so optimistic they seem unrealistic, but what would I know? He has already accomplished more than anyone would have thought possible. As a Christian reader, his compassion for the poor was inspiring to me. Although he's muslim, Yunus loves others by enabling them to succeed. It's the kind of poverty fighting that World Magazine has been encouraging for years. I'm sure that you will appreciate this book as much as I did...

...Which is why I'm giving it away! It was passed along to me by my friend Jenny, which was given to her, with the request that it would be given to others who would appreciate it. So if you are interested in reading it, leave a comment, a commenter will be chosen at random, and I'll mail the book to you. But--you have to pass it along to someone else when you're done with it!