An In­spir­ing Model

The ini­tia­tor of mi­cro-fi­nance, Dr. Mo­ham­mad Yunus, rev­o­lu­tion­izes devel­op­ment and poverty al­le­vi­a­tion.

Southasia - - Contents - By S.G. Ji­la­nee

Lives of great men all re­mind us, we can make our lives sub­lime. - Longfel­low.

One such life is that of the founder of Grameen Bank in Bangladesh. No­bel lau­re­ate Mo­ham­mad Yunus, whose unique con­cept of mi­cro­fi­nanc­ing thrust Bangladesh into the in­ter­na­tional lime­light. He was born in 1940 in Chit­tagong and af­ter fin­ish­ing his M.A. in Eco­nom­ics from the Dhaka Univer­sity, he be­came a lec­turer at the Chit­tagong Col­lege in 1961. In 1969, Yunus re­ceived a Ph.D. in eco­nom­ics from Van­der­bilt Univer­sity on a Ful­bright schol­ar­ship af­ter which he joined the Mid­dle Ten­nessee State Univer­sity as an as­sis­tant pro­fes­sor of eco­nom­ics.

In 1972, he re­turned to Bangladesh and was ap­pointed at the Plan­ning Com­mis­sion. But per­haps the slow pace of ac­tiv­i­ties un­der the government did not suit his dy­namic spirit; he re­signed and joined Chit­tagong Univer­sity as head of its Eco­nom­ics de­part­ment. Keen on eco­nomic re­form to im­prove the lives of the com­mon peo­ple, he devel­oped a Naba­jug (New Era) Teb­haga Khamar (three share farm) in 1975. How­ever, it was in 1976, dur­ing his visit to the poor­est house­holds in the vil­lage of Jo­bra, when Yunus dis­cov­ered that very small loans could make a dis­pro­por­tion­ate dif­fer­ence for a poor per­son.

Jo­bra women made bam­boo fur­ni­ture with usu­ri­ous loans to buy bam­boo. Yunus lent about US$42 out of his own pocket to 42 women in the vil­lage, who each made a net profit of US$0.02 on the loan. This be­came the very foun­da­tion of the world­wide phe­nom­e­non known as Grameen Bank. Yunus be­lieved that if given the op­por­tu­nity, the poor will re­pay the bor­rowed money and hence mi­cro­cre­dit could be­come a vi­able busi­ness model.

En­cour­aged by his ex­per­i­ment, Yunus launched the Grameen Bank Project with loans from the government’s Janata Bank and other com­mer­cial banks. By 1982, the bank had 28,000 mem­bers. On 1 Oc­to­ber 1983, the pi­lot project be­gan op­er­a­tions as a full-fledged bank and was re­named the Grameen Bank (Vil­lage Bank) to make loans to the poor. To­day, 8.3 mil­lion women make up the bulk of its share­hold­ers

Be­hind this project was Yunus’s ob­jec­tive to help poor peo­ple es­cape from poverty by pro­vid­ing loans on suit­able terms and teach­ing them a few sound fi­nan­cial prin­ci­ples so they could help them­selves. But it was not easy sail­ing. In the be­gin­ning, Yunus had to face the wrath of left­ists as well as the ortho­dox clergy who told women that they would be de­nied a Mus­lim burial if they bor­rowed money from the Grameen Bank

How­ever, the success of the Grameen model of mi­cro fi­nanc­ing has in­spired sim­i­lar ef­forts in more than 100 de­vel­op­ing coun­tries world­wide. To­day, the Grameen ini­tia­tive has grown into a multi-faceted group of prof­itable and non-profit ven­tures and eq­uity projects like Grameen Soft­ware, Grameen Cy­berNet, Grameen Knitwear and Grameen Tele­com.

Dr. Yunus has amassed a for­mi­da­ble col­lec­tion of awards, prizes and hon­ors from all over the world. Th­ese in­clude 50 honorary doc­tor­ate de­grees from univer­si­ties across 20 coun­tries, 113 in­ter­na­tional awards from 26 dif­fer­ent coun­tries be­sides state hon­ors from 10 coun­tries, com­mence­ment speeches and lec­tures at var­i­ous univer­si­ties in the USA and UK, such as MIT and Ox­ford; men­tions by For­tune Mag­a­zine as be­ing among the great­est en­trepreneurs of the cur­rent era, by the New States­man among “The World’s 50 Most In­flu­en­tial Fig­ures 2010,” by For­eign Pol­icy mag­a­zine, among “the most de­sired thinkers the world should lis­ten to,” the Prospect Mag­a­zine in its 2008 global poll of the world’s top 100 in­tel­lec­tu­als, and by Time mag­a­zine as one of the top 12 busi­ness lead­ers.

The in­ven­tory of his awards in­cludes: Mo­hamed Shab­deen Award for Sci­ence, (Sri Lanka); Hu­man­i­tar­ian Award, (CARE, USA); World Food Prize, King Hus­sein Hu­man­i­tar­ian Lead­er­ship Award; Volvo En­vi­ron­ment Prize, (Swe­den); Nikkei Asia Prize for Re­gional Growth; Franklin D. Roo­sevelt Free­dom Award, and the Seoul Peace Prize; Ra­mon Magsaysay Award; the In­ter­na­tional Simon Bo­li­var Prize; the Prince of As­turias Award for Con­cord; the Syd­ney Peace Prize; Dwight D. Eisen­hower Medal for Lead­er­ship and Ser­vice and the pres­ti­gious Pres­i­den­tial Award from the Univer­sity of Illi­nois at Ur­bana-Cham­paign.

Dr. Mo­ham­mad Yunus is “one of only seven per­sons” to have won the No­bel Peace Prize, as well as the Pres­i­den­tial Med- al of Free­dom and the Con­gres­sional Gold Medal. He also sits on the Board of the UN Foun­da­tion, Sch­wab, Prince Al­bert II of Monaco Foun­da­tion, Grameen Credit Agri­cole Mi­cro­cre­dit, and Foun­da­tion Chirac’s honor com­mit­tee.

How­ever, in Novem­ber 2010, a Dan­ish doc­u­men­tary ac­cused him and Grameen Bank of di­vert­ing Tk7 bil­lion given by the Nor­we­gian Agency for Devel­op­ment Cor­po­ra­tion (NORAD) to an­other or­ga­ni­za­tion. Though NORAD pub­lished an of­fi­cial state­ment clear­ing Yunus and Grameen Bank from any wrong­do­ing, the Bangladesh me­dia hyped the fab­ri­ca­tion. Mean­while, be­cause Prime Min­is­ter Hasina per­ceives Yunus as a po­ten­tial po­lit­i­cal ri­val, ever since he toyed with the idea of launch­ing a po­lit­i­cal party in 2006, the government launched an in­ves­ti­ga­tion into all Grameen Bank projects in Jan­uary 2011. It even de­nounced the con­cept of mi­cro­fi­nance as “suck­ing blood from the poor.” On the other hand, when Taslima Begum, a housewife turned en­tre­pre­neur, ac­cepted the No­bel peace prize for Grameen Bank, she said, “My par­ents gave me birth, but Grameen Bank gave me a life.” Taslima had used her first Tk1500 loan to buy a goat in 1992 and now she is an elected di­rec­tor on Grameen’s board.

Sev­eral in­ter­na­tional lead­ers, in­clud­ing UN High Com­mis­sioner for Hu­man Rights, Mary Robin­son, stepped up ef­forts to de­fend Yunus through a net­work of sup­port­ers called “Friends of Grameen.” Even though Hil­lary Clin­ton and John Kerry is­sued an of­fi­cial state­ment ex­press­ing sup­port for him, pend­ing in­ves­ti­ga­tion, the government re­moved Yunus from his of­fice as Grameen Bank Man­ag­ing Di­rec­tor and on 8 March 2011, the Bangladesh High Court con­firmed his dis­missal.

Yunus has ap­pealed against the de­ci­sion but with­out the Bank, he is as des­o­late as a mother whose baby has been wrenched away from her. To­day, the ru­ral poor bor­row­ers own 90% of its shares; the government 10%. A government takeover will mean a re­quiem for the fine in­sti­tu­tion Yunus has af­fec­tion­ately nur­tured with his sweat.

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