JEDDAH, 8 September 2003 — The Grameen Family has become familiar not only in Bangladesh but throughout much of the world. It is a symbol of the success that can come from small, even humble, beginnings. The Grameen Family in Bangladesh includes about 2.8 million families and has become a source of health, nutrition, small business, housing and technological development. It is generally composed of the less fortunate and focuses particularly on empowering women.
Twenty-four years ago, a young Bangladeshi economist set out to prove that “every single human being, even barefoot and begging in the street, is a potential entrepreneur.” Dr. Muhammad Yunus was a young college economics lecturer when he observed that the poor were deprived of any economic support from banks. He knew that banks were ready to provide loans to those who could guarantee repayment and provide collateral.
I had the pleasure of meeting Dr. Yunus on a recent trip to Bangladesh. His initial efforts were aimed at empowering the women of rural Bangladesh, making them self-reliant and self-confident. The principle is to help the women help themselves and recognize their potential and status as contributors to both society and family.
Dr. Yunus recalled in the early days that he had made a few personal loans to some of the “entrepreneurs.” He lent his own money to a group of 40 in a village of stool makers. The money helped them buy bamboo to make stools. They sold the stools locally, made a profit, expanded and then diversified. The process of course led to great improvements in their lives.
The results of that single loan persuaded Dr. Yunus that credit was a fundamental human right — that even on the level of micro-lending, a bank could encourage huge social and economic renewal. This was the incentive that changed the life of a village and also inspired the young lecturer to start something that changed the concept of loans and lending. This led in turn to the idea of a Grameen (the word means “pertaining to the village”) Bank which provided loans for starting businesses in any form suitable to the borrowers’ skills and cultural environment.
As a way of helping the poor, he pioneered the idea of “micro-credit” by which his Grameen Bank lent small sums of money to people who were essentially rural. They were sometimes people without land, education, or shelter. Women in particular are the most deprived, neglected and unfortunate in this group, so Dr. Yunus focused on women as the most deserving.
His Grameen Bank provided long-term loans on a affordable repayment basis which enabled women to go into such businesses as poultry farming, raising cattle and goats, cultivating rice and growing flowers or vegetables. Returns were not always quick and profitable; however, there were many success stories to encourage both lender and borrower.
Dr. Yunus found that women were clever businesspeople even though they had seldom, if ever, been given the opportunity by their husbands or male relatives even to handle cash.
“We do not believe in one-time lending. If the woman is unable to make a profit or be successful the first time, we lend her money until she is able to use it successfully and make a profit,” Dr. Yunus pointed out. “It is not the fault of the woman if the cow she buys with our loan dies or the chicken she buys does not lay as expected. We provide her with more money in order to achieve her goal.”
The Grameen Bank project began in 1976. In 1983 it became a bank. “Our bank belongs to the people — women, in particular — who borrow from it and the profits made belong to the women. If they put a certain amount of money into the bank, they receive double that amount in five years. The borrowers own 93 percent of the total bank equity with the remaining 7 percent owned by the government.”
Loan repayment is surprisingly quick, especially from women borrowers. This supports the idea of a micro-credit project and its wisdom.
The women’s confidence was very evident when I was invited by Dr. Yunus to visit one of his projects in a rural area. I met a group of Grameen women who had come to pay their installments to a staff member of the local branch. We sat on a mud floor of a small, thatched one-room hut crowded with women. The group was called to order and a few success stories were told for my benefit. The women were basically uneducated. They told me that they had learned to sign their names and count because of Grameen membership. Nonetheless, they were enthusiastically articulate in telling their success stories.
Lata, in her mid-40s, told me how she was barely surviving with her children until she heard about Grameen. Now she has a modest but thriving rice-growing business which she shares with her husband. She has built her own house, given her son money to buy a small shop and plans to do more in future.
Another woman, a widow, now has a modestly successful business, money to spend and a home of her own.
The women walked proudly and confidently to their homes, introducing me to their husbands and children, their TV sets, ceiling fans, and spacious rooms. The Grameen project has not only helped them lead a better life but has given them a sense of achievement.
The women were self-sufficient, living within the cultural and environmental barriers of rural life, yet they enjoyed earning and contributing not only to their families but to the community as well. One of the women had just been elected a Union Council member. Asked about her future plans, she spoke about better roads and sanitation.
The Grameen Family has provided many important, necessary, basic needs to an entire rural population. The Grameen Shikkha (Village Education) Project provides education by setting up schools which provide boys’ and girls’ basic schooling, education loans and scholarships. I visited one of the schools, a one-room building, and found it filled with the same enthusiasm and interest I had witnessed among the Grameen women.
The need for information technology is not ignored and a Grameen Network now exists. It includes a number of independent companies created as separate legal entities to “spin off” projects within the bank funded by donors and transferred to Grameen Fund to be given as loans. The Grameen Phone Scheme now has more than one million subscribers. Telecommunication services are now offered where before in nearly half the villages in Bangladesh the service did not exist. Women run very profitable businesses enabling people in remote areas to communicate with their friends and families.
In order to be a member of the Grameen Family, one pays a weekly fee of 5 taka per week (100 taka = $1.71). They participate in loan schemes which provide them with business opportunities and enhance their lives as well.
Dr. Yunus believes that opportunity is a means of achievement and is the right of all, regardless of caste, creed, status or sex. “I was told that I was making a mistake giving loans to the poor who could never pay me back. However, I felt that, unlike the rich, the poor could not take the risk of not paying back. This was their opportunity to get out of poverty and they had to make it,” he said.
He proved his point by means of good organization and a repayment system suited to the needs of rural areas and their income levels. His convictions sprang from his experience of working with poor people and the belief that they could escape poverty if given the opportunity.
He feels that “poverty can be tackled and eradicated if the goals are taken seriously and by tackling the social and economic systems that sustain it.” His Grameen Family now enjoys self-sufficiency and financial freedom and a life with the facilities and conveniences of sanitation and health care, educational opportunities, good housing, clean drinking water, an awareness of both human and legal rights and a means out of illiteracy.
Dr. Yunus holds a Ph.D. in Economics from Vanderbilt University, USA and has been awarded a number of scholarships/fellowships, special honors, awards and honorary degrees from all over the world.
