Banker to The Poor By: Muhammad Yunus

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Banker to The PoorBy Muhammad Yunus

• Group I

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Agenda

• Overview
• Author
• Book
• Ethical Issues
• Critique
• Personal Perspective
• Recommendation

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Author

• An economist from Bangladesh
• Chairman of the economics department at
  Chittagong University
• Inventor of Micro-credits
• Founder of Grameen Bank
• Noble Peace Prize Winner
• Aspires to create social business

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Book Overview

• An autobiography about his life and how he formed
  the Grameen Bank
• What influenced him?
• His concept of micro lending
• Importance of working women
• Growth and challenges for the bank
• And what it has achieved till date

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Continued

• Most essential decade was 1970s
• Bangladesh won its independence
• But left the country in Famine
• Millions of people needed to be rehabilitated
• Yunus was stricken by the amount of poverty
• He desperately wanted to change it.
• He initiated projects to aid the farmers

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Differentiating Poorest from the Poor

• Farmers were not the poorest
• Poorest of the poor had
• No land
• Food
• Clothes
• Source of income
• Mostly women with kids
• If not helped, they would die

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A New Form of Bank

• Sufiya Begum
• The inspiration for Grameen Bank
• Loan sharks
• Ate up the profit in terms of huge interest
• Birth of Grameen Bank
• Grant small loans at decent interest rate
• Without any collateral
• Mostly for women
• Based on trust and good faith

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Grameen Bank Success

• In 1976
• Only a small single hut
• Students work as volunteers
• Number of borrowers 42 women
• According to the book, it has now
• 1,181 branches
• 11,777 employees
• Total Loans given 174.78 billion
• 98 repaid
• 95 borrowers are women
• Over 250 institutions around the world operate
  micro-credit programs based on Grameen

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Ethical Issues

• Inequality
• Women treated unfairly
• Regular Banks not allowing poor people to borrow
• No collateral
• Illiterate
• Moral rights vs. religious rights (women)
• i.e. women are not allowed to work outside

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Ethical Issues Contd.

• Multilateral Aid Institutions
• Aiding countries with the biggest price tag
• Move up the promotion ladder
• Corrupted officials
• Government, suppliers, consultants
• Corporate Social Responsibility
• All businesses want money
• No one wants the betterment of society

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Critique

• Book Quality
• mostly focuses on micro-credit and the Grameen
  Bank
• well-written
• a subtle arrogance exists
• quality is derived from the content

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Critique Contd.

• His points
• Well argued and effective
• Uses individual examples
• Uses statistics to better grasp the context
• Contribution to the field
• It is the field to micro lending
• Relations with World leaders ensure field
  development

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Critique Contd.

• Raises the question of whether micro-lending is
  applicable in first world countries.
• In a sense his goal is the opposite of trickle
  down theory
• Gives short shrift to issues such as GDP and
  overpopulation

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Personal Prospective

• Establishment of the Bank
• Utilitarianism
• Competition
• Ownership of the Bank

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Establishment of the Bank
Government
The government bears responsibility for its
failure to keep the market fair.
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Utilitarianism

• An action is right if it tends to produce, the
  greatest amount of good for the greatest number
  of people.

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Competition

• Competition tends to produce efficiency in the
  market and benefits the general consumer by
  resulting in a variety of goods at the best
  prices.

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Ownership

• Government control would not be good for banks
  development

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Possible Improvements

• Explaining how his theory negates traditional
  economic theory
• Is micro lending one size fits all?
• More technical and less optimistic approach
• Include organizational structure and balance
  sheets
• Is it possible for normal banks to micro lend?
• If so? How?

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Thank YouQuestion or Comments
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References

• Picture of Mr. Yunus (slide 3)
• http//www.speakers.com/media/2012/images/yunus-mu
  hammad-bio09.jpg
• Title Page
• http//thelemonaideguide.com/lemonaideblog/wp-cont
  ent/uploads/2010/05/capitol-vs-finance.jpg
• Book pic
• http//covers.openlibrary.org/w/id/1468840-L.jpg