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The Express October 29,1998, London
The man who finally gave money- lending an honourable name
Professor yunus offers an escape from poverty. ROS WYNNE JONES On a banking hero
For A banker, Muhammad Yunus has a novel way of doing business. If you are employed or won land, he will refuse to lend you any money if, on the other hand, you are destitute, you can borrow from his bank without conditions on a fixed- interest rate and he’ ll never send the bailiffs after you if you default.
No nabk would envy this man his clients: be3ggars the illiterate and ill- educated. Yet ,any Western bank must envy his repayment rate, It is 98 per cent- higher than any oter banking system in the world.
" Most banks would conjsider these people uncredit worthy" he says, smiling broadly " I put it another way It is the banks who are unpeopleworthy"
This sort of statement is typical of Professor Yunus, a Bangladeshi economist who one day, in a year of mamine, looked out of his narrow university window and saw a world that the elegant theories of his textbooks had no explanation for, Now his aim is simple but audacious: he wants poverty to reside only in museumxs like other dark things of our past; slavery, the Holocaust, apartheid: "So that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long"
In these days of the Third Way, Which turns out only to be abit of one old way thrown in with a bit of anothder , it is no wonder this man, a true visionarhy, is feted by Western governments, borrowed from by the Clintons, and studied by Millbank.
He admits that, on first sight, his methods may seem something of a leap of faith and yet his proof is that they work. The concept is very simple: a bank which lends to the destitute at a reasonable rate and allows them to escape the stranglehold of poverty.
Professor Yunus set up his own bank- the Grameen Bank or village bank- to achieve his ends. Starting as an experiment in a Bangladeshi village in 1974, it his grown to encompass 1,112 branches serving 2.3 million borrowers in 1998. There are many banks world wide whio now provide " micro – credit " and Grameen today has clones in 59 countries, from America, where it helps the poor of Arkaneas and those on several Indian reservations, toFrench inner cities.
A private Member’s Bill later this year in the commons will look at how micro- credit can work in Britain. His supporters here range from Prince Charles to Clare Short " One in four human beings are living on the edge of human existence;" says the Development Secretary " These are incredibly skilled and brave and courageous people. Professor Yunus is contributing to freeing them from poverty" In his introduction to Yunus’s autobiobiography , published yesterday, the Prince describes" an inspiring, entertaining and confident interlocutor who sent me away with a new and inspiring sense of whAt can be achieved"
More than 90 per scent of Grameen’s Bangladeshi borrowers are women. This, ina country where their low status means most have never controlled any money I their lives" Wome make up most of the poor in Bangladesh," says Professor Yunus " How could I ignore them?"
Ammajan Amina, an illiterate beggar in her 40s, was one of Grameen Bank’s first clients. Of her six children, four had died of hunger or disease and her huband had spent most of their assets pm trying to find a cure for an illness which took his life. After his death, Amina was left with only her house and two daughters
tofeed. For awhile, she sold home – made cakes and biscuits but ran out of money to buy ingredients and turned to beggfing. One night, she came home to find her brother- in- low had sold their tin roof. Later, mon- soon rains destroyed the mud walls and she found her elder daughter dead in the rubble.
Whwn Grameen workers found her, she was hungry and desperate. The bank lent her some money to start making bamboo baskets, She made a profit, repaid her loan and then took anothder to develop her business. She was now a businesswoman, not a beggar" We have two million such life stories." says Professor Yunus’ " One for each of our members."
The professor was born in 1940 , the son of a goldsmith in Chittagong, then in East Bengal, one of nine children. he excelled at school and, in 1965, was awarded a Fulbright scholarship to take a phd at Vanderbilt University in Tennessee. He married and had a child with an American woman but she was miserable living in Bangladesh. In 1980, he married his second wife, Afrozi, a Bangladeshi teacher and researcher in advanced physics. They now have a child, Deena.
It is his mother who had the most profound influence on his life, however. He had watched her, as he grew up, making exdtra jewellery which she sold so she would always have a little to give to poor relatives.
This imbued in him the sense that having enough yourself was only as improtant as helping others.
His epiphany came while he was teaching at Chittagong University during the 1974 famine and skeletal figures began arriving in nearby towns and villages.
"I wanted to run away from these theories, from my textbooks." he says." I wanted to discover the real- life economics played out in the neighbouring village ,The people of Jobra would become my teachers."
Jobra became both his laboratory and his road to Damascus as he began to take what he calls a "worm’s eye view " of the lives of the destitute. What he found was tremendous potential. " In such conditions the fact these people are even alive means they are skilled, yet they are treataed as if they have nothings to offer." he says. His economist’s eye also began to see how the poorest wer4e enslaved to loan sharks who lent money at 10 per cent interest per week , sometimes even per day. They were allowed just enough to keep them alive but not enough to escape the money lenders.
He realised that, if someone were to lend the people of Jobra just L17, the villlageers would escape the trap. He lent it himself and saw a sudden change:" Gredit unlocked their potential and their humanity"
Slowly, Professor Yunus became the guarantor for many poor people , while he tried to persuade a bank to take them on. Frustrataed by refusals. he set up his won. The poor became its clients and its shareholders.
IT HAS gone on to establish a conter- cultutre, a Grameen way" which has radically altered Bangladeshi life. Participants form groups of five and agree to 16 principles , including promising not to pay dowries and to send their children to school, but there are no penalties for failing to hphold them except a loss of pride and peer pressure. If someone defaults, the other four in the group are encouraged to find out how the person has got them selves into such trouble and to help them out.
Muhammad Yunus is something of a culf figure in Bangladesh, the sort of man people whisper mightone day lead the country. He pays himself a modest salary, wears simple clothes, owns a credit card he has never used and lives ina two- bedroom flat.
"He doesn’t even have air – conditioning." says one puzzled Bangladeshi. " He doesnot even take bribes!
He knows everyone thinks he’s crazy but he allso knows that what he is doing works. "A world without poverty," he says, "When I mention this to people, I see a little smile hiding their chynicism. The thing is, I know it can be achieved"