Women’s Empowerment, Microcredit, IT and Poverty

Muhammad Yunus

Three years back we surveyed the educational status of Grameen borrowers’ children and we were pleasantly surprised. Not only were all of them in schools, many of them had graduated from high schools, which was beyond our expectation. We all expected they would at best finish primary schools. But many of them graduated from high schools, many were in colleges, and we even found some of them in medical schools, engineering schools, and universities. We were so excited by this outcome that we immediately introduced another loan package to meet all educational expenses for higher education. All expenses are financed by Grameen Bank, no questions asked. All they have to do is sign an undertaking that when they go into professional life, they’ll pay back the loan. Such has been the impact of one of the “Sixteen Decisions.”

Initiating Political Empowerment

Grameen also plays a role in the political life of its borrowers. We make sure 100 percent of the Grameen family members vote in every national election. It’s a social value we are trying to encourage among them, because if you vote, then politicians pay attention to what you say. In the 1996 elections, voter turnout in the whole country was way above the past records. Seventy-three percent of the population turned out to vote. More women voted in that election than men. This had never happened in the history of Bangladesh. The number of women voting in any election had always been about half the number of men voting. This time, women outnumbered men.

The following year, 1997 was the year of local elections at the village level. This time Grameen women not only voted, they became candidates. More than 2,000 Grameen members, many of them women, were elected in the local bodies. I was surprised because the idea of women running for political office had never occurred to me. The reality was that the women had thought ahead of me.

I am frequently asked why so many Grameen borrowers are women. When I began I had two serious allegations against conventional banks: one, as I have already written, is that conventional banks reject poor people. My second allegation is that conventional banks are biased against women. All my banker friends got very upset about this allegation. The first allegation they understood, but they couldn’t do anything about it. Regarding the second charge, they said. “This is not true! We give loans to women”. I asked them to look at the gender composition of their borrowers: not even one percent of them were women.

Why Women ?

We noticed that money that goes to families through women brings many more benefits to the family. You can see this in every case. When a man is the borrower, there are some positive changes, but not as many. When women borrow, children become immediate beneficiaries. Women have longer vision. They want to bring changes to their lives step by step. They use their money very cautiously.

Women are excellent managers of scarce resources. A woman in a poor family learns to stretch every resource to its maximum. She must manage everything with whatever little she has. When she gets a loan, she brings her excellent managerial skills to it. She always gets much more mileage out of it. Noticing this, we changed our policy. Instead of making 50/50 our goal, we decided to prioritize women. As a result, today 95 percent of our borrowers are women. I think many of the good thing that have happened at Grameen are a result of our decision to focus on women.

Along the way, we have seen people making lots of different assumptions about what can and cannot be done. Can poor people market products ? Does an illiterate woman know how to handle money? Can she keep track of money? Will it work? With repeated work we have demonstrated that these are all minor questions. When people see something which will help them, they do it.

Putting Cell Phones in the Hands of Women

Fox example, we got involved in the idea of setting up a cellular telephone company. We succeeded in getting a license for setting up a company called Grameen Phone. We explained in our project proposal what we would do: we wanted to bring mobile telephones to the villages and give them to poor women. The phones would be financed with loans from Grameen Bank. The borrower didn’t have to have any money of her own to pay for the phone. With the phone she could become the “telephone lady” of the village and start selling telephone service.

Everyone told me I should stick to the business of banking. Because I didn’t know anything about telephones, they didn’t think it would work. They thought the women we gave phones to, would have no use for them. I explained to them that the women would not use the phones themselves; rather, they would become something like a public call office. If you needed to call someone, you could pay the phone lady and make any kind of call you wanted to.

After I had settled that question, they said that no one needs telephone service in Bangladesh villages, and that telephone calls were too expensive. I explained that there are many times every day when villages need to tell something to someone or get some information.

The third question asked was how an illiterate woman could push buttons on a telephone when she didn’t know numbers. I said, if pushing those buttons brings money, she’ll learn how to do it fast. Luckily, there are only ten numbers in the phone set. You give a woman ten minutes, she will learn all ten numbers. If you are not happy with that answer, allow ten hours; but I can tell you, if those ten numbers bring money, she will learn all of them very quickly, no matter how illiterate she is.

We think about poor people and their capacities in the wrong way. There is no difference between the ability of the poorest person and the ability of a person sitting in an office building or classroom. The poor never get the opportunity to bring out their ability, whereas the rest of us do. That’s the only difference. If they get the opportunity, they can change their own lives.

Handouts Do Not Help

Governments try to help poor people by giving welfare benefits or giving handouts. I argue handouts don’t help poor people. Handouts freeze the poverty situation because they don’t bring out ability in a person. You just remain what you are; you never challenge yourself, and you never find out what you have. Governments must help a person to manage his own responsibilities. That’s the way to help unfold a person’s ability. Human beings thrive on challenges. Each time one succeeds in overcoming a challenge, one feels more confident, and feels prepared to take on the next challenge. If we don’t allow people to meet challenge, we are creating a stagnant society which cannot exploit its own ability and worth.

We Can Overcome Poverty With Technology

We could bring mobile phones to the poor women in Bangladesh because we had microcredit from Grameen Bank. Otherwise, there would have been no way to put those phones in the hands of poor women. I see an enormous power in information technology to help people out of poverty. Together, information technology and microcredit have vast potential.

Information technology has the power to transform all economies and all societies. Suddenly, societies which were languishing, become energized and transform themselves almost overnight. If we really design information technology in an appropriate way, we will be able to bring it to the doorsteps of the poor.

Imagine a telephone lady who is selling phone service in the villages. Tomorrow she’ll be selling Internet services. With Internet facilities, you can do anything you want- health services, education services, and new business opportunities. The next generation of Grameen Bank members will grow up with new facilities, and they won’t have to go through the same ordeal as their parents went through. They will be more prepared to change their own lives.

We have created Grameen Communications, Grameen Software, and Grameen Computer Training Programs. We hope the children of Grameen families will be proficient at business. If you can simply design web sites, you can be relatively successful. Also, you can work from your village home because distance and location no longer matter. This is possible because of information technology. If we can open up credit facilities and if we can promote information technology, then people will create possibilities we have not even imagined. This approach is not a mere extension of conventional banking. We are talking about a new kind of banking. It is about banking with people, about prioritizing people ahead of money. Some people will ask if this is profitable. I only think about whether or not we can cover our costs. If we cover our costs, fantastic. Why must one think about making money? I will not discourage you if you want to make money. There are a lot of people who would be delighted to improve people’s lives at cost, rewarded by unleashing the energy of all those people, instead of by profits. That’s the important thing.

Microcredit is a symbol of our interest in changing the lives of people at the very bottom. Microcredit has become synonymous with the hope that we can do something about poverty; perhaps in the past we didn’t attack poverty in the right way, and perhaps microcredit will help us figure out problems we have never been able to solve. With a new understanding we can bring millions of people out of bondage, out of misery, and out of indignity. We can give all people a noble place in society.


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