A Review of Muhamed Yunus's "Empowerment of the Poor: Eliminating Apartheid practiced by Financial Institutions"

Muhamad Yunus was teaching in the United States when there was a movement towards independence in his homeland Bangladesh. There was widespread war, bloodshed and misery at that time. But after nine months of fighting, Bangladesh gained independence, Muhamad decided to go to his homeland and help rebuild and create a nation they (Bangladeshis) aspire to create.

However, Bangladesh did not move forward, in fact the situation took a turn towards the worse. There was widespread poverty; people were hungry and dying in the streets and villages of Bangladesh.  This lead Mohamad to inquire why people were dying this way, and if there was anything he could do to help delay or stop it, even for one person.

It was one particular incident that pointed him to the right direction. A woman made beautiful bamboo stools and sold them for a very low profit, this was because she was a bonded labour to the person who was supplying her with the bamboos; hence, he would pay her at whatever price he wished. Deeply moved at how the woman made so little for so much labour, he began an observation with his students in different villages, after much examination he found that poor people did not need much to start up or fund their business ventures. From one his students findings; a group of 42 villagers needed just $27.

Muhamad started asking banks in Bangladesh to lend small loans to the poor to help them start their small businesses. However, he was either turned away or refused by major banks throughout the country. This led him to the idea of starting a bank of his own. It would be a bank for the poor which can lend small loans. After two years of convincing the authorities, the Grameen Bank was finally opened in 1983.

It was an alternate bank which had a different approach from the conventional establishments in Bangladesh; it was the bank for the women and the poor. At first it was not easy to persuade women to join the bank; traditionally men were not allowed to address women and decisions were always left to the men to make, therefore it was a daunting task to persuade women. However, after much convincing; women started to take small loans to fund their little businesses. This was seen as an ‘enormous leap’ as women were never regarded as breadwinners. This empowered the women not only financially, but also their self esteem and confidence that they can be breadwinners too.

Many good things happened with women being borrowers rather than men; this led to the bank focusing more on women. Today Grameen Bank works in 36 000 villages in Bangladesh, has 2.1 million borrowers, employs 21 000 people, 94% of borrowers are women, and has a recovery rate of more than 98% since inception.

Other banks loans to rural residents have never added up to Grameens $400 million mark. The World Bank Report showed that one third of borrowers have risen above poverty line, another one are near to achieving it, and the remaining one third are at different levels.The bank also advocated on family planning, sanitation, nutrition, and housing, hence today Grameen families are better off than non-Grameen families.

Muhamad stated that “poverty is created by institutions we have built around us. We need to redesign those institutions so that they do not discriminate against the poor. Poverty is a denial of human rights. We talk about human rights but we do not link human rights to poverty”. Therefore it is a must we have to alleviate poverty, because it is a human right that no one should live in poverty.