Fighting poverty with $30 loans: Q & A Muhammad Yunus

Muhammad Yunus is a man who changed the world.

yunus-usatoday1Muhammad Yunus is a man who changed the world. By coming up with a way to lend poor people as little as $30 to start businesses, he reduced poverty so much that he won the Nobel Peace Prize in 2006. Now he is spreading a new poverty-fighting idea that he calls "social businesses." There are already scores of them, including in the U.S. He met last week with USA TODAY's Editorial Board. His comments were edited for length and clarity.

Q: When you founded the Grameen Bank in 1976, what did you hope to accomplish and what impact has microfinance had?

A: Microcredit was the first time many poor people had access to financial services. Previously, they were left to the loan sharks. That's what the world has always known, (and) nobody tried to change it so that people could live in a different way. So when we started, that was the beginning of bringing financial services to the poorest people — particularly the poorest women.

Q: Why did it work?

A: We helped the women develop their own ability to make a living by using loans to create income-generating activity. It gives them the opportunity to explore their own abilities. And they're surprised they can do that. In the world that we're familiar with, the solution for poverty is the creation of jobs. This way, people create their own jobs. They find out their niche.

Q: How many loans have been issued by your bank? What's the average size?

A: Each loan cycle is one year. And today we have 8.5 million borrowers. Cumulatively, we have given out over $11 billion. The starting loan is $30 to $35. As borrowers pay one loan back, they can take another loan that is bigger because they have more business experience. People who have done business with Grameen Bank for a very long time will have loan sizes like $10,000.

Q: How do you get the money you lend?

A: We don't take any donor money. We don't take any money from the government. We take deposits and then lend the money to the poor. The bulk of the deposits come from the poor themselves. Every borrower is required to save a small amount of what they make every week. Today the balance of these deposits for all borrowers reaches to about $1 billion. So out of the $1.5 billion that's loaned out, $1 billion is their own money.

Q: Why are your loans focused so much on women?

A: Why do other banks focus so much on men? That question is never asked, but this question is always asked. The banking system in Bangladesh at the time refused to lend money to poor people, but it also refused to lend money even to rich women. When I decided to start lending money, I decided that half the borrowers in my program must be women.

Q: Were the women instantly willing to accept your offer?

A: The women said, "No, don't give it to me. Give it to my husband." So our job was to peel off the fear of each individual, so that someday one of them would say, "Maybe I should try." And if one or two or three tried and then are successful, others would become curious and it would have a snowball effect.

Q: How long did it take for that to happen?

A: It took us six years to make that happen, to come to the 50-50 level. Then we saw that lending to women brought so much more benefit to their families than lending to men. Today, out of 8.5 million borrowers, 97% are women.

Q: How did you persuade the first women to take the risk?

A: (We told them) that you raise chickens all the time, but you never thought to take money and have a few more chickens. You cook all the time, but you never thought you could cook something and sell. That never crossed their mind.

Q: Are women better credit risks than men?

A: Initially, we had 50/50 (and) there was no difference between the male borrower and the female borrower. Their performance is the same. The point I was explaining previously (is that a woman's) impact in the family is better.

Q: What role is there for microfinance in a prosperous country like the U.S.? And how is that different than in Bangladesh?

A: Basically it's the same. We started in New York City in 2008. We now have six branches and over 12,000 borrowers. All women. What we do in Bangladesh is the same in New York. We actually brought individuals from Bangladesh who had been working with Grameen Bank to run this program here because they're trained. They've never been to the U.S. before, so they do exactly what they do in Bangladesh and it works.

Q: What is the average loan amount in the U.S.?

A: The average loan in New York City is about $1,500, and repayment rate has been so far over 99%. It has become so successful that other cities were inspired to invite us there. The first city was two-and-a-half years back: Omaha, then Indianapolis, San Francisco, Los Angeles and now Charlotte.

Q: What are the lessons you have learned since launching your bank?

A: Once we started making loans among poor women in Bangladesh, we saw other problems. Education problems of the children, housing problems, toilet problems, cooking stove problems. And it gave me an idea: Why don't I try and solve one of those problems?

Q: Where did you start?

A: The first one that I noticed was an ugly health problem — night blindness. We found sad, sweet children who could not see when the sun goes down. So I talked to doctors and they told me there's a very simple cure: "Give them vitamin A and they'll be as good as everyone else. Let them eat vegetables." But I found that the people couldn't afford the seeds to grow vegetables. We started selling one-penny packets of seeds to sprinkle around the house. Our vegetable business grew. So we became the largest seed seller in the country, and in the process night blindness disappeared from Bangladesh. So I thought, "My God. This is so easy. You don't need a doctor. You only need a business to cover the cost."

Q: Has the idea spread?

A: Now every time I want to address a problem, I create a business. These businesses are all focused on problem solving, not on money making. Conventionally, businesses is known for money making. That is what you see in textbooks and practice. But this is a new class of business. So I started calling them "social businesses," non-dividend companies focused on solving human problems while the business tries to just covers its own costs. After that, we started creating one social business after another. Then other countries got involved in making their own social businesses.

Q: What happened next?

A: When multinational companies showed interest, we started joint ventures with them. One is with Dannon, the yogurt company. They agreed to do social business with us, to make an investment to address the problem of malnutrition. In Bangladesh, about 46% of children are malnourished. So we created a special kind of yogurt and made it cheap to cover only the costs of the business. Dannon promised they won't take any dividend. They can take back their initial investment, but nothing else. We're working with Intel and Adidas and others.

Source: USA TODAY
Published on: 25th April, 2013

প্রেস বিজ্ঞপ্তি: সাভারে ভবন ধসে হতাহতের ঘটনায় নোবেল বিজয়ী প্রফেসার মুহাম্মদ ইউনূসের শোকপ্রকাশ।

গত ২৪ এপ্রিল ২০১৩ সাভারে একটি বাণিজ্যিক ভবন ধসে যে মর্মান্তিক প্রাণহানির ঘটনা ঘটেছে, তাতে আমি গভীরভাবে মর্মাহত ও শোকাহত! এ আকস্মিক দুর্ঘটনায় এ পর্যন্ত ২০০- এর অধিক তাজা প্রাণ ঝরে গিয়েছে, আরও বহু হতাহত হয়েছে যা খুবই মর্মান্তিক ও অগ্রহণযোগ্য। ধসে পড়া বিল্ডিং- এর নীচে আটকা পড়া মানুষদের আহাজারি দেশের সকল মানুষকে প্রচন্ডভাবে মর্মপীড়া দিচ্ছে , আমাদের সকলের আশা যে, উদ্ধারকার্যে যারা অংশ নিচ্ছেন তাঁরা সেসব আটকে পড়া মানুষকে অবিলম্বে উদ্ধার করতে সমর্থ হবেন। ভবিষ্যতে যাতে কোন রকমেই এই ধরনের দুর্ঘটনা ঘটতে না পারে এবং কখনো আর কোন প্রাণ এভাবে অকালে ঝরে না যায় তা নিশ্চিত করবার জন্য জাতি হিসাবে আমাদের প্রস্তুতি নিতে হবে।

আমি এই দুর্ঘটনায় যারা নিহত হয়েছেন তাদের বিদেহী আত্মার শান্তি কামনা করছি এবং শোকসন্তপ্ত প্রতিটি পরিবারের প্রতি গভীর সমবেদনা প্রকাশ করছি ।

- মুহাম্মদ ইউনূস

Yunus wins the heart of American nation

Munir Quddus

In a festive ceremony on April 17, 2013, Nobel Peace Prize laureate, Professor Muhammad Yunus, was awarded the Congressional Gold Medal, considered the highest civilian award instituted by the US. The award-giving ceremony took place in the large hall beneath the dome, or the rotunda, in the Unites States Capitol building in the nation's capital, Washington DC. The Democratic and the Republican leaders were present on the stage along with a large number of distinguished personalities and ordinary citizens - all admirers of Prof Yunus and his works in alleviating poverty in his home, Bangladesh, and globally. Adding to the grandeur of the occasion, his daughter, Monica Yunus, lovingly sang the famous song, 'A beautiful dreamer.'

A number of Congressional leaders spoke glowingly of Mr. Yunus's work and his thinking. Senator Durbin said that anyone could come with a complicated model, but only a genius like Mr Yunus can come with a simple idea that can change the lives of millions. A speaker said that Prof Yunus was more than just a dreamer - he was 'a doer and a man of action'. Another described him as a banker, and a revolutionary, the two words that seldom go together. His ideas are so revolutionary that these have caused a tsunami of positive change, and the world is better off today for this change. Senator Reed described him as a unique businessman - one who was not interested in profits, but in lifting people out of poverty.

The leaders with very different ideologies and ideas on the role of government and free markets, found many praiseworthy common aspects of micro-credit and social businesses - the two ideas Mr. Yunus is best known for. While the Democrats tended to emphasise its positive impact on women, and the notion that capitalism does not have to make only a few businessman rich, rather it can very well be an agent for social change, the Republicans spoke of micro-credit's role in creating entrepreneurs, strengthening free markets, and changing individual lives, and thus the world.

Congressman Rush Holt, a long-time supporter, has worked with members of RESULTS, a citizens' advocacy group which has worked passionately over the years to introduce Prof Yunus and micro-credit to the Senators and the Congressmen making this day possible. Mr. Holt in his remarks said the 'good professor' has been confounding pundits for years and critics still disbelieve him. He has demonstrated his ideas work since he has produced uncommon results, but many still fail to take his ideas seriously. Senator Durbin of Illinois, a co-sponsor of the bill in the Senate, spoke of his visits to villages in Uganda and other countries, where women told him personal stories how microfinance had empowered them to overthrow the shackles of tradition. Micro-credit has been a game changer for millions of poor women.

Minority leader Nancy Pelosi focused her remarks on the importance of micro-credit and social business on women's liberation and emancipation. She said the highest compliment she can give Prof Yunus is that he is a 'disruptor,' someone whose ideas and work have completely upended the status quo. His ideas and work have revolutionised and disrupted the traditional old-fashioned conventional wisdom for the greater good. Mitch McConnell, the Senate minority leader, spoke of how Mr. Yunus' work has created millions of women entrepreneurs, freed many from the 'prison of poverty.' The host, Speaker Boehner said the professor's ideas have allowed people to take their lives in their hands instead of looking up to the government for handouts. He pointed out that microfinance is now a cornerstone of the US international aid policies.

In his acceptance remarks, Prof Yunus thanked the American legislators and the citizens for the high honour bestowed upon him - and accepted the award for every citizen of Bangladesh. He spoke of his first visit to this historic building nearly 42 years ago when Bangladesh was in the throes of a violent liberation struggle. Leaving his job as a university professor, he had gone there as a complete novice to plead the case of the people of Bangladesh with the legislators. Now he has returned as a proud citizen of Bangladesh - a nation that was once given up as a 'basket case,' but one that has confounded all predictions and is well-positioned to achieve the UN Millennium Development goals by 2015. He recognised his family and supporters, and ended with a resounding call for action. The motto 'We will send poverty to the museum' that is engraved in Bengali on the back of the gold medal, he said half seriously, reflects an endorsement by the US Congress. However, he was serious when he concluded that poverty is created not by the poor but by the system we have built and if we intend to change the system, we can do away with poverty and unemployment. We are only limited by our imagination, he remarked.

The formal occasion was followed by a reception where guests were able to meet one on one with the distinguished professor. I met an astronaut and his wife from Houston who had visited Bangladesh on a number of occasions to participate in the Grameen Bank programmes. The Voice of America Bangla and Thikana from New York were present representing the media. When Prof Yunus finally arrived at the reception, the audience burst out in adulation. It was unclear who was happier.

He delighted many with hugs and handshakes, and many pictures were taken, some instantly posted on Facebook and other social media, traveling across continents and time zones. The next programme was a lecture he delivered at Georgetown University where the University President welcomed him. Later, the United Nations Foundation and RESULTS hosted a reception in the Rayburn House where Prof Yunus introduced the entire Grameen Bank team including the current and former Managing Directors, and other senior staff. A number of Congressmen and Congresswomen spoke on the occasion including the leader of the Bangladesh caucus in the US Congress. It was a wonderful day for Professor Yunus, the Grameen Bank and for Bangladesh.

Source: The Financial Express
Published on: Sunday, 21 April 2013

Yunus dedicates US Congressional Gold Medal to the people of Bangladesh

Munir Quddus

pyunusWORLD renowned Bangladeshi economist, Professor Muhammad Yunus, was awarded the Congressional Gold Medal in a joyous and glittering ceremony on April 17. The occasion took place in the large hall beneath the Dome, or the Rotunda, in the Unites States Capitol building in Washington DC. Democratic and the Republican leaders were present, along with a large number of distinguished personalities and ordinary citizens — all admirers of Prof. Yunus and his life work in alleviating poverty in his home, Bangladesh, and globally. Adding to the occasion, his daughter, Monica Yunus, sang the famous song “A beautiful dreamer.”

Former speaker Nancy Pelosi said that Prof. Yunus was not only one of very few who had won the US President’s Medal of Freedom, the Congressional Gold Medal, and the Nobel Prize, he was also the first Muslim to win the Congressional Gold Medal. The Medal’s antecedents go back to the American Revolution, when George Washington became the first person to be honoured with this award in 1776.

With his family and friends watching, Prof Yunus humbly accepted the award on behalf of the 160 million citizens of Bangladesh. He said he could hardly contain his tears of joy and felt immensely blessed for the honour.

A number of congressional leaders spoke glowingly of Prof. Yunus’s work. Senator Durbin said that anyone could come with a complicated model, but only a genius like Yunus could come up with a simple idea that would change the lives of millions. A speaker said that Prof. Yunus was more than just a dreamer, he was a doer and a man of action. Another speaker described him as a banker and a revolutionary — two words that seldom go together. His ideas are so revolutionary that they have caused a tsunami of positive change, and the world is better for this change. Senator Reed described him as a unique businessman, one who was not interested in profits, but in lifting people out of poverty.

What was amazing was that these leaders, with very different ideologies and ideas on the role of government and free markets, found many praiseworthy aspects of

microcredit and social business — the two ideas Prof. Yunus is best known for. While democrats tended to emphasise the positive impact on women, and the notion that capitalism did not have to make only a few businessman rich, rather it could very well be an agent for social change, the Republicans spoke of microcredit’s role in creating entrepreneurs, strengthening free markets, and changing individual lives, and thus the world.

What an occasion! I found that the security was tight, as expected, but the staff and the guards were friendly. Even though the lines were long on this beautiful spring morning sporting cherry blossoms and trees full of flowers in the nation’s capital, the mood was festive. I spoke to a number of guests who had travelled from Texas, California and New York. We all eagerly exchanged stories connecting the man and his work. The ceremony started with prayers offered by the Chaplain, who prayed movingly for the honouree’s long life and continued success.

In the audience I spotted the former president of Mexico, Vicente Fox, among other dignitaries. Also present were a large number of Bangladeshi Americans, staff members of the Grameen Bank who had travelled with Dr. Yunus, his family members, friends and admirers. The colours and dresses were beautiful and global — women in saris, some with scarves, men in suits, a few in punjabi and kurta as sported by Prof. Yunus, along with men in the army, navy and air force uniforms.

Congressman Rush Holt, a long time supporter, has worked with members of RESULTS, a citizen’s advocacy group which has worked passionately over the years to introduce Prof. Yunus and microcredit to the Senators and Congressmen, making this day possible. Mr. Holt said that the good professor had been confounding pundits for years and critics still disbelieved him. He has demonstrated that his ideas work since he has produced uncommon results, but many still fail to take his ideas seriously. Senator Durbin of Illinois, a co-sponsor of the Bill in the Senate, spoke of his visits to villages in Uganda and other countries, where women told him personal stories of how microfinance had empowered them to overthrow the shackles of tradition. Microcredit has been a game changer for millions of poor women.

Minority leader Nancy Pelosi focused her remarks on the importance of microcredit and social business on women’s liberation and emancipation. She said the highest compliment she could give Prof. Yunus was that he was a “disruptor,” someone whose ideas and work have completely upended the status quo. His ideas and work have revolutionised and disrupted the traditional old fashioned conventional wisdom, for the greater good. Mitch McConnell, the Senate minority leader, spoke of how Prof. Yunus’ work had created millions of women entrepreneurs, and freed many from the “prison of poverty.” The host, Speaker John Boehner, said that the professor’s ideas had allowed people to take their lives in their own hands, instead of looking up to the government for handouts. He pointed out that microfinance was now a cornerstone of US international aid policies.

In his acceptance speech, Prof. Yunus thanked the American legislators for the high honour bestowed upon him, and accepted the award as an honour not just for him as an individual, but also for all of Bangladesh. He spoke of his first visit to this historic building nearly forty two years ago when Bangladesh was in the throes of a violent liberation struggle. Leaving his job as a university professor, he had come here as a complete novice to plead the case of the people of Bangladesh with the legislators, and to oppose Pakistan’s military regime that had unleashed death and destruction on the people. The legislators were very understanding, even through the official US policy at the time was not in favour of the Bangladeshi struggle.

Now he had returned as a proud citizen of Bangladesh — a nation that was once given up as a “basket case,” but one that has confounded all predictions and is well positioned to achieve the UN Millennium Development goals by 2015.

He thanked his family and supporters, and ended with a resounding call for action. The motto “we will send poverty to the museum,” that is engraved in Bengali on the back of the gold medal, reflects an endorsement by the US Congress, he later joked. However, he was serious when he concluded that poverty was created not by the poor but by the system we had built and if we could change the system, we could do away with poverty and unemployment. He urged all to join the struggle as much work remained to be done.

Source: The Daily Star

Yunus Calls for End to Global Poverty

By Sarah Patrick
Hoya Staff Writer

Published: Thursday, April 18, 2013
Updated: Thursday, April 18, 2013 23:04

the-hoyaBangladeshi Nobel Peace Prize Laureate and Grameen Bank founder Muhammad Yunus discussed his lifelong goal of reducing global poverty and promoting economic and social opportunities Wednesday afternoon.

Speaking to a packed crowd of students and dignitaries — including former President of Kyrgyzstan Roza Otunbayeva and former first lady of South Africa Thobeka Madiba-ZumaYunus graced Gaston Hall for the fourth time, shortly after receiving the Congressional Gold Medal for pioneering efforts to reduce global poverty. Yunus is the only person in the world to have received the trifecta of the Nobel Peace Prize, the Presidential Medal of Freedom and the Congressional Gold Medal.

Since Yunus founded it 30 years ago, Grameen Bank, a microfinance organization and community development bank based in Bangladesh, has grown to include about 8.4 million borrowers, 96 percent of whom are women, and has a 97 percent return rate. More than 250 institutions and nearly 100 countries now also offer microcredit services modelled on the Grameen Bank system, which provides loans to individuals and entrepreneurs who are too poor to qualify for traditional bank loans.

Yunus explained his unique approach to poverty eradication, which differs from the work of nonprofit organizations and charities.

“I try to solve the problem by creating a business,” Yunus said.

University President John J. DeGioia praised Yunus’ work and challenged the audience to take up his cause at the event, which was co-sponsored by the Institute for Women, Peace and Security, the Master’s Program for Global Human Development, the Office of the President and the Yunus Centre.

“He reminds us through his words and actions that it is up to us all to enrich and expand the context of those now in poverty to create fertile grounds so [that] they can fulfill their potential and claim their rightful place in the global community,” DeGioia said.

Yunus’ approach inverts the traditional business goal of making money, instead aiming to solve problems by creating social businesses, which are non-dividend companies that reinvest profits to address social needs.

Grameen Bank’s willingness to deal directly with women also diverges from traditional banking practices in Bangladesh, which have prevented women from learning how to handle money.

“When the woman says, ‘I do not know what to do with money; I am afraid of money,’ always remember it is not her voice,” Yunus said. “It is the voice of the history which created the fears of money.”

According to Yunus, vast improvements in women’s health and dropping birthrates in Bangladesh, which have helped put Bangladesh on track to achieve the first United Nations Millennium Development Goal of cutting poverty in half by 2015, are testaments to Grameen Bank’s success.

“That basket case has now become strong,” Yunus said in reference to former U.S. Secretary of State Henry Kissinger’s characterization of Bangladesh as a “basket case.”

Yunus described the powerful cocktail of imagination, ideas and technology as being pivotal to his success.

“All you need to change the world is an idea, not money,” he said. “If you imagine, it will happen.”

The Hilltop Microfinance Initiative, a student group founded in 2008, embraces Yunus’ approach to poverty eradication by providing small business loans and business consulting services to low-income entrepreneurs and immigrants who are ineligible for traditional loans.

HMFI Chief Operating Officer Dawn Chan (SFS ’14) said that Yunus’ work inspired the HMFI’s mission.

“Yunus’ theory and what he is pushing for [are] what we are doing now,” she said. “We try to empower people by giving them financial opportunities.”

Source: The Hoya

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