JEDDAH, 26 February 2008 — The poor are not responsible for poverty; it’s the society that imposes poverty on them. It never gave them the space to grow, said Nobel laureate Professor Muhammad Yunus while delivering a lecture at the Jeddah Economic Forum (JEF) here yesterday.
Disarming honesty and genuineness of this modest and humane man quite literally brought tears to the eyes of many Saudi businessmen. His remarks were hugely applauded and he received a standing ovation at the end of his address, the only one on whom this honor has been bestowed in nine years of the JEF’s history. All through his address he kept the audience spellbound. Following the conclusion of his speech, groups of women ran toward the stage to meet with this visionary individual and encircled him as if he was some Hollywood star.
“If anyone has to be blamed for the menace of poverty, it’s the society and it’s unfair economic systems that should be blamed for poverty, not poor people. There is nothing wrong with the poor,” he said. “They’re as good as anybody else. They’re as active as anybody else. They’re as creative as anybody else. They’re as smart as anybody else. Poverty is not created by poor people, it is created by society,” he said.
He also made it loud and clear that poverty is a global phenomenon, not restricted to the Third World in a rebuttal to Alastair Stewart, the moderator, who said that he has done a very good job to elevate poverty in the Third World.
Yunus, a practical visionary, talked about how social entrepreneurship and technical expertise can, together, change the world. He called upon businessmen and other social organizations to help “in creating a world where there are no poor and poverty becomes a thing of the past.”
“We should keep poverty in a museum for the coming generation to come and see,” he said. Yunus is the pioneer of microcredit, the process of using collateral-free loans of small amounts to help millions of families out of poverty. The Bangladeshi economist started the bank by lending $27 to 42 people to help them free themselves from “loan sharks.”
“And it created an enormous reaction. They were so happy. Looking at them later on, I thought: ‘if you can make so many people so happy with such a small amount of money, why shouldn’t you do more of it?’ So I went to the bank. I thought this was such a simple solution; he would be excited to do that. He said ‘no. Banks cannot lend money to the poor people.’ I said: ‘This is such small money, you’ll not miss this money.’ He said: ‘No, it’s not a question of the amount of money, it’s the principle: Banks cannot lend money to poor people.’”
“I offered my personal guarantee and started signing guarantee papers to facilitate loans to the poor,” he said. “In 1983 I founded Grameen Bank, which now operates in nearly 80,000 rural Bangladeshi villages. Today we have 7.3 million borrowers, 97 percent of the bank’s clients are women.”
“Rich people own conventional banks, but this bank is fully owned by its clients and has been a model for microfinance institutions around the world. They elect members for the board of directors who in turn formulate and execute policies for their socio-economic empowerment,” he said.
In 2006, Yunus was awarded the Nobel Peace Prize for his pioneering work.
“Sixty-seven percent of our borrowers who have been with us for about five years, are now above the poverty line,” he said.
Speaking about the functioning of the bank, he said: “I studied the operation of conventional banks and decided to do the opposite in lending money to the poor. The conventional banks follow the dictum of: the more you have the more you get. But I follow the principle: the less you have the highest priority you get in receiving the loan.”
“They ask for collateral and guarantee. The Grameen bank provides loans without collateral, guarantees and legal hassles,” he said.
He said the bank encourages borrowers to send their children to school, which has borne fruit. “A 100 percent of our borrowers’ children are in school now. For higher studies we provide educational loans too.”
He added that King Saud University in Riyadh has offered 50 scholarships to Bangladeshi students to come here and study. In a very passionate and emotional tone, Yunus talked about providing loans to beggars and improving their lives and prompting them to take up proper jobs. “If we granted them a loan they would still be beggars. So, two years ago we decided to give some merchandise to beggars and told them to sell the small items while they go begging,” he said, adding that some of his colleagues were of the opinion that beggars will not change. “I told them to keep patience. Because it takes time to restructure a business, to close the begging division, and to strengthen the sales division. And today 10,000 beggars have already stopped begging and become salesman.”
This shows Yunus is a leader who has managed to translate visions into practical action for the benefit of poor. Responding to a question from the audience about what type of resistance he faced starting the bank that lends money to women, Yunus said: “The first one, the most strong one to begin with, was from men. Men opposed the idea because we were offering loans to women. Then came religious opposition. Saying that giving loans to women is not accepted. I said that’s funny, because I thought religion always supported women being in business and so on, I gave examples, we brought all the historical evidence from Islamic history where women were in business and Muslim women were successfully doing business and so on. I told them if you are a good Muslim find a businesswoman to marry.”
“And we also had opposition from money lenders, we had opposition from political parties because the extreme left, the ultra left, thought this is capitalism coming into the country and stopping the whole socialist movement within the country, and that this is an American conspiracy planted in Bangladesh to get poor people out of the attention of socialist movements. And the conservatives thinking that this is a new way of organizing poor people, that this was a communist ploy to get ready for a bigger movement, taking over the power of the country, and so on.” Yunus also talked about the social aspect of business. “Today, the concept of business is to make money,” he said. “Making money is the name of the business. And I’m saying this is very narrow interpretation of human being.”
“We should also look at the other aspects of human being. Human beings are much bigger than just making money. So I said, to be true to the human nature, we should include at least one more type of business, business to do good to people, without an expectation of making any personal gain out of it.”
He said social business is the need of the hour to help providing the poor a better living condition. So once we include this into the business world, tremendous things can happen in poverty alleviation, in nutrition, in health care, and in childcare.
One such project is the Grameen-Danone Company in Bangladesh, which produces fortified yoghurt packed with vitamins and all the micronutrients, and sells them into the market on a no-profit basis so that malnourished children can have them to gain strength, he said. He also spoke about his mission to provide safe drinking water to all in Bangladesh.
It was amply clear that the man, who has provided credit to the poor for over 30 years, still retains the enthusiasm for his job and the innovation he brings to it.
