I’ve just finished Dr. Muhammad Yunus’s book, “Banker to the Poor.” For those who don’t know Dr. Yunus, he is an economist who founded the Grameen Bank, which pioneered micro-credit lending programs for Bangladesh poor, especially women. For his work with Grameen Bank he won the 2006 Nobel Peace Prize.
The over 270 pages is broken into 14 very readable chapters. The first couple deal with Dr. Yunus’s childhood through his college years in America on a Fulbright scholarship. But the majority of the book deals directly with his awaking to the plight of what he calls the hard-core or absolute poor, his initial attempt to help (lending $27.00 of his own money to 42 people), his first regional project which eventually led to the founding of the Grameen Bank.
It seems like a simple solution that Dr. Yunus hit upon, but there have been and continue to be many structural obstacles. He writes, “In both rich and poor countries alike, credit institutions have favored the rich and in so doing have pronounced a death sentence on the poor. Why have economists remained silent while banks rejected the poor as unworthy of credit? Nobody can provide a convincing answer. Because of this silence and indifference, banks have imposed a financial apartheid and gotten away with it. If economists would only recognize the powerful socioeconomic implications of credit, they might recognize the need to promote credit as a human right.”
I really think micro-lending is a powerful tool for good and justice and Dr. Yunus’s story and work is worth leading about. In reading this book you will learn some important insights and gain a unique perspective on the poor and their willingness to work.
To put feet to my belief, I joined Kiva (Kiva.org) last fall and started funding micro-loans through their network. Since I can’t afford to put a large amount into loans up front, I’ve been funding a small amount each month. I just did my March funding and now have loans to 11 individuals. Eight have started repayments and two are over 50% paid off.
I’m curious to hear from others who know about or participate a micro-lending scheme.
- What has been your experience?
- Who do you work through to make or fund loans?
- Any downsides or cautions others should know about?