From Rags to a Roof Over Your Head

Muhammad Yunus has finally won The Nobel Prize for Economics. It’s about time.

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I no longer remember when I first read his book. I know I found it in the "New Books" section at the library, probably in the late 1990s. Having worked with poor women in the past, the dust jacket intrigued me, so I put the book into my stack of borrowings.

Banker to the Poor: Micro-Lending and the Battle Against World Poverty was so memorable that some time later I bought the book myself. And I began to make donations to Dr. Yunus’ project.

As I recall from my reading, he studied economics, having returned to Bangladesh after getting his doctorate in the US. He sent his students out to study poverty in Chittagong, and based on their papers, he became interested in finding a way to get around the usurious money-lenders that poor women were forced to bargain with in order to buy the materials they needed to make crafts - baskets, chairs, etc., - to sell at the market, only to turn around and give most of it back to the money lenders in a vicious and seemingly unbreakable cycle.

Dr. Yunus realized his great big doctorate wasn’t doing any good if he couldn’t use it as a lever to change the economic conditions of the very poor, the desperately poor, in his country. As I recall from the book, he started small - his own money, and less than a hundred dollars. This was long before "Grameen Bank" was a fully formed idea, much less a successful enterprise. All he wanted to do, originally, was to intervene in a fundamentally unjust situation.

As anyone who has worked with the poor and marginalized knows, it does no good to play Dr. Bountiful. So there had to be rules about how much money could be borrowed, when it would be repaid, and who would supervise the program. Dr. Yunus would set up micro (and I do mean micro) loans to craftswomen in order to free them from the money lender schemes. Improvising as he went along, he had the women join small groups of other borrowers. They met to discuss business methods, repayment plans, and just to encourage one another. This took courage, both on the part of Dr. Yunus and his first borrowers; the moneylenders were not happy with this new arrangement.
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All of the above is what I recall from reading the book. Considering my retention rate on what I read (which is nil), it is obvious Dr. Yunus made quite an impression on me. Now, this from his website:

The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, Head of the Rural Economics Program at the University of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor.

That’s amazing, considering the ink had barely dried on Yunus’ doctoral degree when he began his research on the problem. However, he wasted no time and things were shortly up and running:

The action research demonstrated its strength in Jobra (a village adjacent to Chittagong University) and some of the neighboring villages during 1976-1979. With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation. Today Grameen Bank is owned by the rural poor whom it serves. Borrowers of the Bank own 90% of its shares, while the remaining 10% is owned by the government.

There is a strong moral foundation to Grameen. In addition to signing on to the repayment requirements, there are "The Sixteen Decisions of Grameen Bank." All of them are geared toward self-improvement, community responsibility, and family health.

Here is Number Twelve, entitled "We shall not inflict any injustice on anyone, neither shall we allow anyone to do so." To me, this illustration is meant to portray the old moneylenders and how they harmed those who used their services. It reminds members not to fall back into the cycle which had kept them in grinding poverty. It wasn’t for nothing that Grameen won The Fast Company/Monitor Social Capitalist Award for 2005 and 2006:

The Fast Company/Monitor Social Capitalist Awards is the only award program that quantitatively measures a non-profit group’s innovation and social impact, as well as the viability and sustainability of its business model. Grameen Foundation has twice been recognized for its groundbreaking work in expanding the reach of microfinance around the world while applying innovative technology to increase efficiency and provide new opportunities for the poor.

It is also has a Four Star Charity Navigator rating. In other words, this is an idea worth your money.

Grameen is slowly becoming a global phenomenon. It is even here, in the US, in two projects. As I recall from my original reading, when Dr. Yunus first came to America to explain his project and to recruit the poor, his ideas didn’t/couldn’t translate to government bureaucrats used to "working with" the poor. They sent him small business projects, not poor single parents trying to make a go of things with a craft or talent they thought might be marketable. It took a few years for Grameen ("the village") to translate into American economic terms. For an example of how it can work cross-culturally, read Kevin’s story.


A several-days-late hat tip to Eteraz via email: You thought I didn’t know about this wonderful man, didn’t you? See, even a jihadiphobe can have a Muslim hero. I knew about Dr. Yunus long before I ever heard of the evil CAIR or the Ummah. Long live Grameen - capitalist to the core.