Professor Yunus and Grameen Bank

from the Korea Times

By Ali Hamid Khan

Professor Yunus and his Grameen Bank, of which he is the founder and managing director, have given a tremendous boost to the image of Bangladesh and also given the world a new vision, a new concept to tackle the most formidable and destructive problem nagging Bangladesh and most parts of the world; deep-rooted and pervasive poverty gnawing away at the world's economic and social stability and harmony.

The project started in Jobra (a village adjacent to Chittagong University) and neighboring villages from 1976 to 1979. With the central bank's sponsorship and support of the nationalized commercial banks, Tangail district (a district north of Dhaka, the capital city of Bangladesh) was brought under this project in 1979.

The bank's positive impact on its poor and former poor has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).

The origin of the bank can be traced back to 1976 when Yunus, head of the Rural Economics Program at the University of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor.

The Grameen Bank Project came into operation with the following objectives: (i) Banking facilities for the poor, (ii) eliminating the influence of money lenders, (iii) creating employment opportunities for the unemployed, (iv) bring disadvantaged, mostly women into an organizational form to help them manage and understand themselves and (v) reverse the age-old vicious circle of low income, low saving and low investment into a virtuous circle of higher income, credit, investment and higher income and savings.

The project was extended to several other districts in the country after its success in Tangail. In October 1983, the project was transformed into an independent bank by government legislation.

The interesting part is that the rural poor, whom it serves today, own the bank. Borrowers of the bank own 90 percent of its shares, while the government owns the remaining 10 percent.

The Grameen Foundation uses micro-finance and innovative technology to fight global poverty and bring opportunities to the world's poorest people.

A global network of micro-finance partners has already reached over 2.7 million families in 22 countries.

Yunus has given us a plan to successfully fight deprivation and poverty destroying the efficacy of the Bangladesh. He has told us in compelling terms that the poor cannot be ignored and their well-being is linked with peace and turning away from them would be immoral and disastrous.

Their poverty can be removed if we so choose; it is only a matter of choice and conviction. He strongly believes that the availability of the financial sector to the poor can help them reclaim their lives and contribute in overall development by pursuing their small enterprises, adding to bigger development on national basis.

He has proved that they can be turned into a viable and strong force by giving them the opportunity.

They can succeed in changing their lot; consequently, the world would be a safer, happier and better place to live.

The world not only listened to him but also honored him, along with the bank he founded, with the highest and most prestigious award in the world ― the Nobel Peace Prize. He was awarded this honor in October 2006.

Today he is a much-talked personality worldwide.

Due to his relentless hard work and his belief in the potential of the poor, he evolved a new system, offering funds to the poor to work on their small projects to turn around their lives.

Positive changes started becoming more and more visible and tangible, penetrating every village and town in Bangladesh and even transcending borders to reach out and touch the lives of people in different countries.

Yunus has also proved that Bangladesh has potential and resources and its people are hard working and peace loving. They can change their lives and have a positive impact on the world as well.

The professor has proven that there is a way out of the labyrinth of poverty, and society can develop so the poor can become proactive forces, instead of struggling endlessly to make ends meet.

He translated his vision very successfully and today a vast section of the world can benefit from his concept.

He has carried his message beyond his country's borders and helped others to benefit from this new mechanism.

Loans to the poor without financial security was taboo in the financial sector but Yunus belied everyone by bringing into the fold of his bank the poorest of the poor and gave them financial support, from which most would have shrunk away, to establish small businesses to help them find a respectable place in society.

From modest beginnings three decades ago, Yunus has developed micro-credit into an important instrument in the struggle against poverty.

He started with a few dollars and never looked back. The poor, instead of being a liability, are now are considered a vibrant force to be reckoned with.

Single-mindedly and with determination, he carried on his crusade and after a long and arduous odyssey has come to the point where it is touted as a solution to poverty.

Yunus worked not for personal glory, accolades or panegyrics but to set the poor free from the shackles of poverty, to work for their emancipation and also bring them into nation-building activities.

He knew peace and the poor are strongly linked and it is imperative to build a society where there is economic equality so that the people can enjoy peace and posterity can benefit from the stability as a result of a new social order.

The Norwegian Nobel Committee awarded the Nobel Peace Prize for 2006, divided into two equal parts, to Yunus and the bank for their efforts to create economic and social development.

Peace can only be achieved if the majority of the population can be helped to live a life free from poverty.

Poverty is the main retrograde in the way of a lasting and complete peace. If a nation is living a life free from want, democracy and human rights can be achieved and consolidated so that the new generation can continue unhindered.

The bank has moved away from conventional banking practices and given loans to the poor without collateral. This relationship between banker and borrower is based on mutual trust, accountability, participation and creativity.

The bank is based on reaching out to the poor disregarding their financial strength and credibility and uses this form of credit as a cost effective weapon to fight poverty.

Yunus taught us that it is wrong to discard the poor. They must be given the opportunity to grapple with their problems and this has surely paid off dividends in a large way; so much so that the world has noticed and started replicating his concept to fight poverty.

As of December 2006, the bank has 6.91 million borrowers, 97 percent of whom are women.

With 2,319 branches, the bank provides services in 74,462 villages, covering more than 89 percent of villages in Bangladesh.