letter was originally published in The Statesman of Kolkata
and reprinted in Dr. Radice’s book titled A Hundred
Letters from England. The author is Head of Department of
South East Asia, SOAS, University of London.
it's been a relief to read Banker to the Poor: The Autobiography
of Muhammad Yunus, Founder of the Grameen Bank (Arum Press
Ltd., 1998). What a contrast with Rushdie! Not a turbid torrent
of words here, but a spare and lucid stream. Not the self-indulgence
of super-rich rock-stars, but the anxious, self-sacrificing
toil of the very poor.
book has been written with the help of an American journalist,
Alan Jolis, so one doesn't know how many of its word are actually
his own. But it conveys a magnetic personality, and seems
to have nothing phoney or ghost-written about it. The only
thing that bothered me as I read it was that it seemed too
good to be true. If the story of the Grameen Bank really is
as Yunus relates, then it is a most extraordinary achievement,
and I wonder why he hasn't been given the Nobel Prize for
Economics (or for Peace?) long ago. I rang up the BBC Bengali
service to ask precisely that question. Bishakha Ghosh, after
consultation with colleagues, told me there was a general
assumption that he would get the Prize sooner or later; and
the only reason why Amartya Sen had got it before him was
that he was older, and was hugely distinguished in the academic
field, whereas Yunus' achievements were essentially practical.
There was certainly nothing sinister in the fact that he was
gather, however, that the aims, claims and achievements of
the Grameen Bank have all been the subject of a great deal
of academic controversy. Yunus clearly has his detractors,
inevitably so, given that some of his staunchest supporters,
Bill and Hillary Clinton, and in recent years the World Bank
itself, are themselves so controversial.
myself being at all in a position to evaluate the Grameen
Bank, I tried, through telephone conversations, to get a sense
of the kind of debates that are going on.
Terry Byres, recently retired from the Economics Department
at SOAS, told me that as a Marxist Economist he had always
been secptical about the Grameen Bank. In a country like Bangladesh,
there was a deep-seated "network of exploitative relationships"
and he had never been able to believe that simply making credit
available to the very poor - to enable them to run their own
small businesses - could cut through that network significantly.
He told me that many neoclassical economists were doubtful
too, however publicly supportive they might be of the Grameen
ideal. To understand rural poverty, and to take significant
steps to eradicate it, political economy or "the class
issue," in Marxist terms, could not be ignored.
orthodox banking, bureaucratic corruption and government-channeled
development aid are all sharply criticised in Yunus' book,
he does seem surprisingly accepting of the political and social
status quo. But does that make the achievements of Grameen
any less valuable?
spoke to Professor Geoff Wood, Director of the Institute of
International Policy Analysis at the University of Bath, which
takes a specialised interest in microcredit and microfinance.
He is the co-editor, with lffath Sharif, of a collection of
papers on the subject, Who Needs Credit (Zed Press, 1997),
and attended the first Microcredit Summit in Washington in
1997, an enormous affair, with 3,000 delegates from 137 countries.
Wood said that Yunus had undoubtedly begun with some beautifully
elegant Ideas. One was that loans should be made to the poor
without specifying what they should be used for; another was
that small groups of borrowers should be formed, to serve
as "social collateral". The joint liability of these
groups makes it much harder for borrowers to default, though
as time has gone on there has been a debate about whether
the high rates of debt- recovery have in fact been achieved
through joint liability or through aggressive tactics by Grameen
has always made a point of targeting women, and Yunus argues
persuasively in his book that this has been done because women
are particularly disadvantaged, and need to be empowered.
Professor Wood said that this had also probably helped with
the debt-recovery, because women have to behave more docilely
than men in Bangladesh's patriarchal society, so are more
likely to be steady repayers. But there were doubts about
how much of the money being borrowed and used was actually
being controlled by women, and about whether some borrowers
from the bank were sacrificing their diet or that of their
families to make the repayments.
The main academic controversy about Grameen, however, was
about the extent to which microcredit could actually promote
development. It certainly helped individuals to manage fluctuations
in income, but most of its use involved high-turnover petty
trading, encouraging borrowers to enter already saturated
academic debate, Yunus is willing to accept many of these
points, but counters by saying that the aim of Grameen is
simply lend money. Professor Wood admires Yunus' "quick-witted
ability to counter criticism," but says that there is
often a discrepancy between the very ambitious, messianic
creed of the Grameen movement -that through microcredit poverty
can be eliminated from the world -and its tendency to back
away from criticism by saying that its aims are, after all,
very modest: to lend money, and let human enterprise do the
book moved me. Its simplicity is deeply refreshing, and I
noted down lapidary statements such as "things are never
as complicated as we imagine them to be. It is only our arrogance
which seeks to find complicated answers to simple problems."
But I did feel I was reading about a movement that was quasi-religious,
and therefore sometimes naive. The "Sixteen Decisions,"
for example, that Grameen borrowers have to espouse and learn
by heart are admirable, but human nature and history make
one doubtful, alas, that they will be kept any more firmly
than the Ten Commandments.
piety should not be cynically dismissed, and my feeling after
both reading the book and listening to the academic doubters
is that the Grameen ideal is of value in itself, however imperfect
or disappointing it may ultimately be in its execution. Yunus
has cut through the stale old left/right, socialist/capitalist
wrangle; his insistence that self-employment is preferable
to wage- slavery. and that capitalism can be "social-consciousness-driven,"
not greedy or exploitative, surely does offer a way forward
not only for countries like Bangladesh but also for areas
of unemployment and industrial decline in the West. He is
also in tune with the information revolution. His organisation
"GrameenPhone" promotes cellular phone use in rural
areas, and he envisages a time when villagers will be able
to offer services worldwide through the Internet.
hear what Yunus's critics say, but still like the song that
he sings, still admire what Grameen has set out to do. I hope
he gets the Nobel Prize soon.”
Dr. William Radice