I had the unique opportunity to meet Dr. Muhammad Yunus last week in NYC after the screening of a film called Bonsai People directed by Holly Mosher, the first film about the work of Dr. Yunus, the Grameen Bank and the wonderful world of micro-credit. The film brings one into the way Grameen Bank interacts with its members locally, on a day-to-day basis.
A Nobel Prize or two relatively recently seems to have been granted with more hope in hand than substance. Not so with Dr. Yunus. He has played a major role in overcoming poverty in some of the poorest countries in a creative, compassionate but no less profitable way, primarily lending to women who have consistently used the loans for the improvement of their families and villages worldwide.
Dr. Yunus initially made loans of $27 to 42 women and this has become an international bank that has loaned some 8 billion dollars in micro-loans to over 8 million women in 90 countries. He is known as the "Banker to the Poor".
On A Better World Radio & TV, I interview the sung and unsung heroes of society. What constitutes a hero? A man who has dedicated his life to service of humanity, Earth, sentient beings. In this case, Dr. Yunus has been helping the underprivileged, those without many resources, until, that is, they may have the good fortune to meet him or one of his now many bank managers of Grameen Bank, which, in BanglaDeshi, means "Village" Bank. I have interviewed his colleague, Sam Daley-Harris and we discussed the power of micro-credit for the effective economic transformation of society. It's working.
One of Yunus' books, Creating a World Without Poverty, Social Business & the Future of Capitalism, in effect, as CEO of Grameen Bank, he re-defines the role of a banker in society. He or she is not someone who is there to take advantage of a borrower by charging exorbitant fees and a loan full of subtle trickery, written in legalese in miniscule letters on lots of pages, insuring that few will take the time to read it from start to finish. A banker's role is to serve the People by extending loans and credit at fair rates and Dr. Yunus exemplifies that. One of the phrases used among Grameen bankers is: "These are not handouts, these are handups!"
By the way, the bank is very profitable. This is a business, providing an invaluable service and by so doing, gaining a handsome, reasonable profit.
Its success has been remarkable. I asked Dr. Yunus how Grameen Bank was able to achieve a virtually unprecedented 97% rate of loan payback, a rate that Americans banks would stand in awe and envy of. I queried, "Is it because about 97% of your clientele are women?" He answered by saying that it was because of "personal relationship" with their clients, who they refer to as "members" as though they were members of a club, and in fact, they really are. The women often form groups among themselves, counsel and support each other, encourage each other and even cover the loan payments at times for each another when one of them hits a hard time. A strong sense of community among many has developed world-wide as a result of Dr. Yunus and his, at this point, large team's efforts.
As a result of lending an initial loan anywhere from $20-75. (although now some loans are for considerably more and the system still works once scaled upward), the women of a village are able to buy chickens, a goat or even a cow. Others buy raw materials for making handicrafts or growing vegetables and hiring others to build their small business so employment increases on the local level and everyone benefits. This is working like a miracle across the world. Oftentimes all someone needs is a little help from outside and this is what Grameen Bank has provided: I call it "credit with kindness". Should America try this? In fact, Grameen is operating and serving communities here in the U.S.
The banker takes a personal interest in the well-being of his customer. If there's a problem and a payment cannot be made at some point, the customer isn't penalized or threatened with foreclosure, but contacted and not infrequently visited by the banker, the way doctors used to make house calls. Support, understanding, counsel and encouragement are the ways, not punitive attitudes, threats and late fees. It is banker as psychologist, minister and healer, all wrapped up in one. Can you imagine banker as community-builder instead of what we largely have here in the U.S. of banker as community destroyer?!
As a result of the extensive work of Grameen Bank, this Nobel Prize for Peace to Dr. Yunus was so overwhelmingly appropriate. If you want peace, they say, make sure there is justice. And part of justice is that people can have a vital livelihood and cultivate their own food so the families can eat: greater distribution of economic wealth across the land.
Interestingly, Grameen Bank is helping to support the greening of the businesses and houses for which they are lending money. In this way, they are building sustainable practices into village communities around the world, many steps ahead of first world economies such as ours.
If the small-business and mortgage departments of Bank of America, Morgan-Stanley, Citibank, Chase and Goldman Sachs were to take a few lessons about sound, effective and humane banking practices from the world's bank "for the poor" I daresay, we'd have a stronger economy here in the U.S., a kinder, society, more people living in their homes instead of being ousted and on the street due to foreclosure and an overall "happier, a more employed and prosperous America".