This 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.

“Meanwhile, 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.

Yunus' 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 still waiting.

I 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.

Without 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.

Professor 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.

Although 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?

I 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.

Professor 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 staff.

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 markets.

In 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 rest.

Yunus' 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.

But 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.

I 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