“Today microcredit has a very large impact in Bangladesh. More than half of our poor families have been reached through microcredit. The strength of microcredit in helping people cope with extremely adverse situation was demonstrated very clearly during the devastating floods of 1998, which were the worst in our nation’s history. Half of the country was under flood water for ten continuous weeks. There were widespread predictions that once the flood waters receded, a terrible famine would ensue and disease would spread. We feared that the famine of 1974 would look tame by comparison. But there was no famine this time and no disease epidemics. The coping capacities of the people had been immensely reinforced by microcredit.

We saw the strength of microdredit programs during the national elections of 1996 as well. Voter participation reached an all-time high of 73%. The most surprising thing was that more women voted than men. It was a dramatic departure from the traditional voting pattern, where women voters casting their ballots would number less than half the number of male voters. This followed a serious effort by Grameen Bank to convince our borrowers (95% of whom were women) that they should make their voices heard loud and clear by achieving 100% voter participation. Other microcredit programs acted similarly.

More surprises were to come. In 1997, elections were held for village councils. This time, three seats were reserved for women. However, both men and women voted to fill these seats. More than 2,000 Grameen women borrowers were elected to councils in that election. Many more contested and lost. It was quite surprising and encouraging to see poor women elevating themselves from voters, to becoming candidates for public office.

Grameen always encouraged its borrowers to send their children to school. Three years ago, we reviewed the educational situation of Grameen families. We were thrilled to see that nearly 100% of Grameen children were in schools, and many have started going to colleges. To accelerate progress, we initiated a new loan product to finance the entire cost of higher education for Grameen family members. So far we have financed 250 students who are attending universities, medical as well as engineering schools, while 1,25,000 Grameen children were in the final two years of high school. We expect to be financing many more post-secondary school students in the next few years.

We were noticing the explosion of information technology all over the world. We thought that this technology could change the fate of the poor; particularly, poor women very quickly, if we designed programs right way. In collaboration with Telenor, a Norwegian telecom company, we created a mobile phone company called GrameenPhone, in 1996. It became operational in 1997. We wanted to take mobile phones to the villages, where telephone service did not exist before. We wanted to initiate the poor women of Grameen Bank into the telecommunications business by setting up “village pay phones”. Many in Bangladesh thought giving cellular phones to poor and illiterate women in the rural areas was a crazy idea. They thought it would be a financial and cultural disaster. Today we have more than 2000 telephone ladies and each woman is making an income, four times the per capita income of Bangladesh from her telephone business. We plan to expand this to 40,000 villages over the next few years.

We have initiated other programs that bring solar power, sustainable agriculture, and even the Internet to the poor. We are continually amazed by the capacity of poor people; specially, poor women, to use whatever resources they receive, in order to better the lives of their family members, and those in their communities.

There are many things of human history, that existed in the second millennium that we should leave behind, and not bring into the third millennium, or discard as soon as possible. One of those things is poverty itself. Poverty is not caused by the poor. It is caused by the institutions that society has created. If we change the approach of the institutions, the poor will change their conditions, and do it quickly. What we have done in the world of banking, can be repeated in other fields as well.

We should leave behind traditional ideas; such as “the poor are lazy”; “they harm our environment”; “they are superstitious and risk-averse” or that “helping them to permanently change their conditions is an impossible dream”. We should also leave behind the belief that protectionism in all its forms – economic, informational and social – is helpful to the poor. Globalization is inevitable, and if managed correctly, it can help the poor immensely.

There are many positive things that we should bring from the past into the third millennium. Microcredit is surely one of them. Democracy is another. The quest for making information technologies cheaper and more accessible, is still another. The relatively new idea that entrepreneurs and investors can pursue and receive recognition for attaining social as well as financial profit, should give rise to a totally new field of human endeavor in the twenty-first century. I believe that the elimination of poverty is much more a question of building the right kinds of business models, rather than expanding charity programs that do not really help the poor, but actually make them more helpless in the long run.

Let us dream of a world without abject poverty, where the only place we can find a person who cannot meet their basic needs is in a museum. Let us work to make that world a reality in the shortest possible time frame.”

Extracted from: Asian Breeze # 32, July 2001