The Man Who Is Creating a World Without Poverty - The Banker to the Poor

The Man Who Is Creating a World Without Poverty - The Banker to the Poor
Thursday, January 10, 2008

By Richard Appelbaum, The Santa Barbara Independent

The idea for microcredit began in the early ’70s, when Muhammad Yunus — an economist from Bangladesh’s Chittagong University — led his students on a field trip to a poor village, where they interviewed a woman who made bamboo stools. Yunus learned that she had to borrow money at rates as high as 10 percent per week for the bamboo she used — a cost that left her with only two pennies a day as her total income. Had she been able to borrow under fair conditions, she would have been able to amass an economic cushion and rise above a subsistence level.

Realizing there must have been something terribly wrong with the economics he was teaching, Yunus took matters into his own hands. Yunus some of the usury victims with loans out of his own pocket. The sum total of his investment was the equivalent of 27 U.S. dollars. This modest experiment succeeded in putting the women on a self-sustaining cycle of business growth, lifting them out of poverty. It was also an epiphany for Yunus, who realized that tiny loans could make a huge difference in the lives of people trying to eke out a livelihood with small business ventures.

In this interview from December 2007, UCSB Professor Richard Appelbaum and Professor Yunus discuss the origins and reasons for the success of the Grameen Bank, as well as Yunus’s call (in his latest book, Creating a World Without Poverty) for the creation of “social businesses” where profits would go not to investors but for poverty reduction.

Read the entire interview from here