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From: ZENIT News Agency <email@example.com>
MUHAMMAD YUNUS, BANKER FOR THE POOR
Exclusive Interview With Recipient of the 1998 Prince of Asturias Award
MADRID, JUN 22 (ZENIT) - On June 18, Muhammad Yunus, founder of the "Grameen Bank," received the Prince of Asturias Award for Concord. Other award recipients for the year were the missionary Nicolás Castellanos, the mission coworker Vicente Ferrer, and the surgeon Joaquín Sanz-Gadea. The panel praised Yunus for "his selfless and tenacious work and his exemplary contribution in various parts of the world and activities toward the progress and improvement in living conditions of the needy, in this way helping improve understanding among peoples."
Professor Yunus teaches economics at the University of Chittagong in Bangladesh and decided twenty years ago to find out why his neat economic theories didn't help to bring the poor out of their misery. He did not understand how people who worked twelve hours a day, seven days a week, could lack sufficient food to feed themselves. He decided then that the poor must become their own masters. This was the impetus for the birth of the Grameen Bank, the "Bank of the Poor."
ZENIT: Professor Yunus, what have the poor taught you?
YUNUS: That they did not create their poverty, nor is it due to any intrinsic limitations of the
individuals making up this social class, nor is it caused by a lack of demand for work. We have
created the poverty of the people with our unimaginative and obsolete policies and theories,
which do not consider the enormous capacities that we all have to change circumstances and
institutions. Human nature was created to be self-sufficient.
ZENIT: So, then, how can poverty be eliminated?
YUNUS: Some economists have suggested that the solution to the problem of poverty rests in
job creation. However, if employment is not designed correctly, it can just perpetuate poverty. A
wage-earning job could probably keep a person in poverty forever if his income doesn't generate
enough in excess of his basic needs. To banish poverty, we have to follow a continuous process
of creating productive activities in such a way that the resource base of a family is strengthened
in every economic cycle, permitting them to earn, manage, and save in every cycle. Thus, you
could say that self-employment, supported by credit, has a greater potential to improve the
resource base than wage-earning jobs.
ZENIT: And if the poor don't have resources to ask for credit, what do they do?
YUNUS: That is the problem. The traditional banking system prevents the poor from improving
their situation. It doesn't let them form a part of the marketplace. Their poverty is not due to a
personal problem caused by laziness or ineptitude, but rather a structural problem: lack of capital.
The current system prevents the poor from being able to save a penny, thus rendering impossible
an investment that could change their lives. This situation must change. Banks should not serve
to protect the rich and destroy the poor. Access to credit should be considered a human right.
ZENIT: How did "microcredit" begin?
YUNUS: While people were dying of hunger in the streets, I was teaching beautiful economic
theories. I started to hate myself for the arrogance of pretending to have answers. We university
professors were intelligent, but we knew absolutely nothing about the poverty around us. We
looked at everything with a bird's-eye view, unable to see the details at ground level. Therefore, I
decided to learn from the poor. One day I found a woman who made bamboo stools with a profit
of two cents. Since she didn't have the money to buy the bamboo, she had asked for credit from a
moneylender. He obliged her to sell her stools at low prices, with the result that she worked
practically as a slave of the usurer. In that very town there were another 42 people in the same
situation. I gave them the thirty dollars they needed to free themselves from these "loan sharks,"
requiring only that they promise on their honor and their word to later repay the money.
ZENIT: Why did you found the Grameen Bank?
YUNUS: For years, I tried to convince the traditional banks to loan small amounts without
requiring collateral. It was useless. The poor are poor because the system exercises financial
"apartheid" against them. First it excludes them, then it condemns them to a passive role. Thus,
in 1976, I decided to found my own bank, the Grameen Bank.
ZENIT: What characteristics does one need to get a loan at the Grameen Bank?
YUNUS: We give our microcredits to poor people without requiring guarantees. Thus, we bring
many people who had been excluded back into the productive system. We only ask that with
every request for credit, they present a project that is supported by five people who are not
relatives. These promise on their honor and their word, and they will collectively accept the
responsibility to repay the loans given to the various members. The negotiations will be made on
the spot, and the amounts loaned are between 15 and 30 dollars. The interest rate is 16% and
repayment is made weekly after the first month. There are economic incentives, such as the
possibility of obtaining staggered loans or a reduction of the interest payments if it is paid back
ZENIT: How has the Grameen Bank developed?
YUNUS: Very well. Today, this bank operates in 37,000 of the 68,000 towns of Bangladesh. Of
the 2.3 million receiving loans, 94% are poor women. Our repayment rate is 97%. In June 1997,
we exceeded 2 billion dollars in total loans. Our success confirms that loans don't need collateral
in order to be repaid.
ZENIT: Has the Grameen Bank extended into other countries?
YUNUS: Not as the "Grameen Bank," although the system of microcredits that we use in
Bangladesh is already present in 52 countries. There are banks with these characteristics in
Bolivia (Bancoso), Indonesia (Kupedes), India (Sewa), and South Africa (Get Ahead
Foundation). The most developed experience in Europe has been in France. Recently, the World
Bank funded an institution called "Consultative Group to Aid the Poor" (CGAP), in which 25
countries participate, and which has the purpose of obtaining resources to develop microcredit
throughout the world.
U.S. President Bill Clinton has already publicly asked that the Nobel Peace Prize be granted to this 58-year-old Bengali. The only dream that Muhammad Yunus still wanted to achieve, however, was completed last year in the objective of the first "Meeting on Microcredit," which was held in the U.S. and resolved to eradicate poverty among 100 million families in the third world by the year 2005
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