A lot of people (including me) talk about how we need to help “save the poor.” It’s a line used so often to no real effect that I think many of us feel hopeless when we hear such expressions—or worse, we feel nothing at all. How can we possibly save “the poor”—this amorphous entity? I used to lament about this, especially after my initial visit to the Philippines in 1999 as a 21-year-old college senior. The question kept me up at night, gave me guilt trips when surrounded by wealth and abundance. I didn’t know the answer.
Well, as crazy as it may sound, I think Muhammed Yunus (and the many people who collaborated to create the Grameen Bank and its prototypes) have figured it out—or at least, they’ve made a huge step in that direction.
I’ve been reading Yunus’ autobiography, Banker to the Poor, for the past few days since my arrival in Banaue. Here’s what Grameen bank does, in a nutshell. A bank representative will go to a town where people are poor—so poor that their kids are starving, so destitute that they may not have places to live. The rep. will gather a group of locals together and ask them what kind of businesses the people would start if they could have a checking account and a small business loan. Many people (especially women) are dubious at first, and many are afraid—having no previous business or financial education and afraid of that kind of empowerment. Soon (or sometimes after many meetings), a few timid hands raise: “I would like a loan for $325 (in the US) so I can buy a sewing machine. Then I can make clothes and sell them in the local shops.” Or another: “I would like some money to buy a stove on wheels so I can sell my tacos.”
Once the interest is there, Grameen Bank insists that they get a group of five borrowers. Each borrower must support the other projects, for if the borrower cannot pay back the loan it stops the other borrowers from getting future funds as well. Usually, these groups end up being support systems for the borrowers. One American immigrant shared: “In the fifteen years that I have been here, I never had a friend. I didn’t even know anybody. I was all alone. Now I have many friends. My four friends in the group are like my own sisters. Even if the WSEP (U.S. Grameen project) did not give us money, I wouldn’t leave the group.”
The bank is based on one revolutionary concept: credit is a basic human right. The loans are offered without credit checks and with low (2%) interest rates, with repayment rates around 97%. Yunus, and those involved with the bank, believe in the imagination and power of humanity. His bank allows people the pride of self-employment—in fact, I believe the bank uses a far more empowering and successful methodology than most international aid or welfare programs. Though the program began in Bangladesh, today more than 250 institutions in nearly 100 countries operate micro-finance programs based on Grameen methodology.
Yunus’ book, filled with many moving success stories, will inspire you—it’s definitely changed my life.
Check out his book here: http://www.bankertothepoor.com/bankertothepoor/
or his website: http://www.grameen.com/
Well, as crazy as it may sound, I think Muhammed Yunus (and the many people who collaborated to create the Grameen Bank and its prototypes) have figured it out—or at least, they’ve made a huge step in that direction.
I’ve been reading Yunus’ autobiography, Banker to the Poor, for the past few days since my arrival in Banaue. Here’s what Grameen bank does, in a nutshell. A bank representative will go to a town where people are poor—so poor that their kids are starving, so destitute that they may not have places to live. The rep. will gather a group of locals together and ask them what kind of businesses the people would start if they could have a checking account and a small business loan. Many people (especially women) are dubious at first, and many are afraid—having no previous business or financial education and afraid of that kind of empowerment. Soon (or sometimes after many meetings), a few timid hands raise: “I would like a loan for $325 (in the US) so I can buy a sewing machine. Then I can make clothes and sell them in the local shops.” Or another: “I would like some money to buy a stove on wheels so I can sell my tacos.”
Once the interest is there, Grameen Bank insists that they get a group of five borrowers. Each borrower must support the other projects, for if the borrower cannot pay back the loan it stops the other borrowers from getting future funds as well. Usually, these groups end up being support systems for the borrowers. One American immigrant shared: “In the fifteen years that I have been here, I never had a friend. I didn’t even know anybody. I was all alone. Now I have many friends. My four friends in the group are like my own sisters. Even if the WSEP (U.S. Grameen project) did not give us money, I wouldn’t leave the group.”
The bank is based on one revolutionary concept: credit is a basic human right. The loans are offered without credit checks and with low (2%) interest rates, with repayment rates around 97%. Yunus, and those involved with the bank, believe in the imagination and power of humanity. His bank allows people the pride of self-employment—in fact, I believe the bank uses a far more empowering and successful methodology than most international aid or welfare programs. Though the program began in Bangladesh, today more than 250 institutions in nearly 100 countries operate micro-finance programs based on Grameen methodology.
Yunus’ book, filled with many moving success stories, will inspire you—it’s definitely changed my life.
Check out his book here: http://www.bankertothepoor.com/bankertothepoor/
or his website: http://www.grameen.com/
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