Banker to the Poor by Muhammad Yunus Review

The novel starts with Muhammad Yunus narrating in detail lives of poverty stricken Bangladesh citizens. The poor in Bangladesh were unable to uplift themselves from poverty because the credit system that was available prior to Grameen was exploitative of the poor; at times, the poor end up paying quadruple of the amount of money that they get from creditors. The usurious rates offered in Bangladesh and other developing countries at that time were socially acceptable to an extent that even the borrowers failed to notice how exploitative and oppressive the rates were. In Bangladesh, when a borrower took a loan from a creditor, the borrowers land was put up as security and placed at the disposal of the creditor who enjoyed ownership rights of the land until the whole loan was cleared by the borrower. There are many instances where creditors made it difficult for individuals to repay back the loans by insisting that the money borrowed be repaid in whole, not in small amounts. As a result, many poor citizens ended up losing their lands to the manipulative creditors. Many Bangladesh poor citizens ended up being slaves of loans because they had to borrow loans to repay previous loans. As a result, many of them died in debt and in perpetual poverty. People in Bangladesh were not poor because they were lazy; they were poor because financial structures that would ensure that the poor widened their economic base were non- existent. Muhammad Yunus first step in making the poor financially independent is when in 1976, he lent twenty seven dollars of his own money to forty two villagers.

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Grameen Bank was founded by Muhammad Yunus as a micro-credit institution for the purpose of lending out loans to poverty stricken citizens of Bangladesh. Later the Bank spread its wings all over the world. After seeing the success of Grameen Bank, the World Bank approached Grameen Bank and offered to give the latter a loan that would strengthen its activities. Grameen Bank declined the offer from the World Bank because it did not want to play by the whims of the World Bank. Executives of mainstream banks had discouraged Yunus against his venture by stating that loaning money to the poor who do not have collateral for their loans is an idea that was doomed to fail. Yunus gave a deaf ear to his critics and together with his colleagues at Grameen, he soldiered on in providing loans for the poor as a step towards uplifting them from poverty. Interestingly, women constitute a large percentage of people who have borrowed money from Grameen Bank, at ninety-four percent. Grameen Bank was able to survive in the long run by dealing solely on commercial market issuing and by borrowing from commercial banks. With time, Grameen Bank thrived and became the soundest financial institution in Bangladesh.

Grameen Trust is a sister organization of Grameen Bank and it is entrusted with replicating the success of Grameen Bank throughout the world. The World Bank had earlier stated that Grameen Banks idea was not viable but with time after Grameen Banks success became palpable, the World Bank acknowledged micro- credit as one of the best financial tools that can be used to uplift the poor from poverty.

Muhammad Yunus has always been an independent thinker, since his youthful days. He has never had the penchant of veering into group thinking or sprout what is deemed fashionable. Yunus played an instrumental role in ensuring that present day Bangladesh seceded from Pakistan from the United States as a postgraduate student in Vanderbilit University, Tennessee. Yunnis and all Bengalis that at that time living in North America wanted a Bangladesh nation where democracy was upheld, a nation where citizens would be given the will to fashion their lives as they pleased and a nation where its citizens would be freed from poverty. Courtesy of the efforts of Yunnis and his colleagues, Bangladesh won independence in 1971. When Yunnis returned to Bangladesh and took up a job as an economist professor at Chittagong University, he initiated a project dubbed Three-Share Farming experiment whose objective was to improve farm yields among farmers in Bangladesh as a step towards ending famine that had hit Bangladesh.

The first step in creation of Gremeen Bank came in December 1976 when Professor Yunus, acting as a sole guarantor successfully obtained a loan from Janata Bank on behalf of the poor people of Jobra. The poor of Jobra were very cooperative and about ninety eight percent of the loans that were taken were repaid. The poor saw it as an opportunity to uplift themselves out of poverty, they did not want to lose out on a once in a life time opportunity. It reached a point where Grameen project started to exclusively lend to women because based on the projects analysis, women constituted majority of the poor, they were close to children and had been proved to use their loans in a constructive and purposeful manner.

Borrowers at Grameen Bank had to form groups to access the loans. The purpose of the group was to encourage members within a group to encourage each other in ensuring that no one defaulted paying back a loan. If a member of a group defaulted on a loan, no other group member would get a loan. Individuals in a given group were very supportive of each other in ensuring that loans were repaid. The success of Grameen Bank credit bank was built on building of a rapport between the Bank and its borrowers. The Grameen Bank system runs on a principle that the bank should go to the people, not the other way round.

Grameen was coined from the word gram which means village in Bangladesh. Therefore, the bank was created for village people and people who lived in rural areas. Grameen Bank was born out of Grameen project after intense lobbying by Prof. Yunnis; he wrote a proposal to the Ministry of Finance and pleaded his case to the Ministry of Finance that Grameen should be converted into a bank so that it could be able to strengthen its capital base that would in turn improve its operations and efficiency. Grameen type credit programmes have been replicated all over the world after the success of the Grameen project in Bangladesh. The success of Grameen project clones all over the world has proved that people all over the world, more so those who are poverty stricken have relatively the same needs, that is, to be uplifted from shackles of poverty.

In conclusion, the book reveals that poverty is created by policies and structures of society, not by the poor. Change in structures of society, more so the financial system is pivotal in ensuring that poor people change their lives to the better. The success of the Grameen experience is a manifestation that through support of financial capital, the poor are able to emancipate themselves from shackles of poverty.