Before I embark on a summary of one of the most inspiring people I have ever acquainted with, I want you to think about the words microcredit and micro-finance. What do these words mean? What do they mean to you?
On March 6th, 2013, I was given the opportunity to hear Nobel Peace Prize recipient, Muhammad Yunus, keynote speech at Quinnipiac University. I had no substantial knowledge on these two words and their tremendous effect on societies, but within the hour of hearing him speak I had a clear understanding of the impact between underprivileged entrepreneurs and the banking system.
As a Bangladeshi economist driven by his belief that credit is a fundamental human right, Muhammad Yunus hoped to help impoverished people escape poverty by providing loans and teaching them sound financial principles through what he called social business. Yunus began his career after graduating from Vanderbilt in 1969 with a doctorate in economics, and furthermore became an assistant professor of economics at Middle Tennessee State University. Returning to Bangladesh, Yunus headed the economics department at Chittagong University where he often contemplated making a change to the economy of his devastated country. The “arrogance of his PhD and knowledge” disappeared, he said, when he forgot about economics and started to think about human beings and the struggles they face. The problem with that was, behind the walls of a well established schooling system it was hard to see society’s issues. In order for him to understand the root of the economic crisis, it was important to go out and stand next to a human being and see what needed to be done. You see, research can give you the numbers you need, but the physical interaction with someone less fortunate fuels the devotion to help one another. Yunus admitted how useless he felt teaching economics while his country was suffering and a village of people not too far from the University were begging for their lives. When he was able to help at least one person, for at least one day he overcame the feeling of uselessness. He met and talked with the people in the village and it dawned on him that this village was not full of unemployment statistics and population graphs that he learned about in school – this was a group of people, real people.
During school he felt that he learned at a “bird’s eye view” where he was flying high but only seeing the picture at a distance; but at the village he gained another view, the “worm’s eye view.” Although this view only gave him very little sight (he could only see out of a smaller “lens”), he was able to see much more clearly and it allowed him to feel less afraid. Yunus mentioned that when you look at a problem from a bigger standpoint, you see yourself as a small insignificant factor, but when you look at the problem up close, through a smaller lens, you become this important member that has the ability to make a change. It’s the same principle when you look at artwork. When you stand far away from the piece you can see the colors and characters being portrayed in their own significant ways, however, when you stand closer to the frame you can see the smaller details that you might not have seen previously. You are able to see the river of wine that Titian painted in Bacchanal of the Andrians that explains the arrival of Bacchanal, god of wine, which, from standing far from away you would have just thought to be a river full of people. It isn’t until you stand close to the picture, that you can see the importance of the story.
The problem that faces society in Bangladesh, and even globally, that Muhammad Yunus came to realize was the illogical sense of lending that the banking institution provides. What is the main purpose of loaning money? To offer people with less money the ability to pay for something as long as they have a means of repayment. Unfortunately, the bank does not lend money to poor people, rather, they lend money to the rich – the people that don’t really need it as badly. Yunus explained that when he visited the people at the village they told him that they had borrowed money, a total of $27, from multiple loan sharks. He thought, “why don’t I just lend them money myself so that they are no longer connected to multiple borrowers, especially ones as bad as loan sharks?”
So in 1983 the government of Bangladesh agreed to set up a bank, Grameen Bank, which established the first microcredit lending process. The differences between the Grameen Bank and most other banks are that the owners are the borrowers and the bank takes deposits and lends them instead of taking money. All of the money comes from internally generated funds, and there has never been a shortage. Now, with 8.5 million borrowers, lending $1.5 million in tiny loans, the repayment rate has been consistent at 97%.
So why has it taken this long to establish such a concept? Why has poverty lasted so long? And who created poverty?
“Poverty was not created by the poor. It is imposed on them. Poverty was created by the system that we created and we have done it by passing it on.”
– Paraphrased quote by Muhammad Yunus
An excellent analogy of poverty that Yunus gave was the seed versus the tree. You can plant the best seed you can find into a flower pot, yet that plant will never grow to be as big as a tree. The reason of this is because the seed was not given enough soil to grow as big as the tree. There is nothing wrong with the “seed” of those less privileged, it’s that society has never given them the base, the soil to grow as big as their potential. Yunus said that we’ve created a world where we are assigned one role and that role consists of doing all we can to work for a business that makes money, or to own a business that makes money. Our incentive is profit. More money equals more happiness.
And yet, humans aren’t money making robots. There is more to life than the obsession of money. This money-centric world that we live in does not have to become an addiction. Yes, money is important, but “we have other roles to play.” Yunus took his own selfless advice and instead of becoming a philanthropist and giving away all of his money, he created social businesses. Some of his accomplishments/new plans include:
• Solar home systems in Bangladesh. They now sell more than 1,000 solar home systems/day.
• Helping Haiti in their social business – joint venture with Brazil so that Haiti can produce/export chicken and eggs.
• Social business in Colombia with McCain potatoes
They did so well that eventually other businesses (like McCain potatoes) came to Yunus looking to do business. Instead of using “our creative power to make money and business”, Yunus believes that we need to use that power to create social business to better our world. “The world is not a complicated thing. It is simple.” It is us humans who enjoy thinking complicated. For instance, why is unemployment on the news? Why can’t we televise someone getting a job on the news instead? Being positive eliminates all sense of doubt. One of my favorite lines of Muhammad Yunus’ keynote speech was this,
“Poverty should be in a museum, not in society.”
I will leave you to think about all of that and decide what difference in the world you are going to make today, tomorrow or within the year. It could be a difference that you make to yourself, a difference in the neighborhood, or even bigger. Mine will be contributing in making a vegetable garden for a suffering community in South Africa to sell crops, what will yours be?
Below is the video of the keynote speech given at Quinnipiac University on March 6th, 2013.