Banker To The Poor: Micro-Lending And The Battle Against World Poverty

It began with a simple $27 loan. After witnessing the cycle of poverty that kept many poor women enslaved to high-interest loan sharks in Bangladesh, Dr. Muhammad Yunus lent money to 42 women so they could purchase bamboo to make and sell stools. In a short time, the women were able to repay the loans while continuing to support themselves and their families. With that initial eye-opening success, the seeds of the Grameen Bank, and the concept of microcredit, were planted.

After earning a Ph.D. in economics at Vanderbilt University, Dr. Yunus returned to Bangladesh to settle into a life as a professor. But a famine in 1974 ravaged the country, leading Dr. Yunus to alter his thinking and his life profoundly: "What good were all my complex theories when people were dying of starvation on the sidewalks and porches across from my lecture hall?.... Nothing in the economic theories I taught reflected the life around me." Armed with little more than a lofty dream to end the suffering around him, he started an experimental microcredit enterprise in 1977; by 1983 the Grameen Bank was officially formed.

The idea behind the Grameen Bank is ingeniously simple: extend credit to poor people and they will help themselves. This concept strikes at the root of poverty by specifically targeting the poorest of the poor, providing small loans (usually less than $300) to those unable to obtain credit from traditional banks. At Grameen, loans are administered to groups of five people, with only two receiving their money up front. As soon as these two make a few regular payments, loans are gradually extended to the rest of the group. In this way, the program builds a sense of community as well as individual self-reliance. Most of the Grameen Bank's loans are to women, and since its inception, there has been an astonishing loan repayment rate of over 98 percent.

Banker to the Poor is an inspiring memoir of the birth of microcredit, written in a conversational tone that makes it both moving and enjoyable to read. The Grameen Bank is now a $2.5 billion banking enterprise in Bangladesh, while the microcredit model has spread to over 50 countries worldwide, from the U.S. to Papua New Guinea, Norway to Nepal. Ever optimistic, Yunus travels the globe spreading the belief that poverty can be eliminated: "...the poor, once economically empowered, are the most determined fighters in the battle to solve the population problem; end illiteracy; and live healthier, better lives. When policy makers finally realize that the poor are their partners, rather than bystanders or enemies, we will progress much faster that we do today." Dr. Yunus's efforts prove that hope is a global currency. --Shawn CarkonenBook DescriptionA new edition of the New York Times Bestseller by the Nobel Peace Prize-winner.

This autobiography of Nobel Peace Prizewinner Muhammad Yunus spent ten weeks on the New York Times bestseller list, and was also a Wall Street Journal bestseller. Now repackaged in the spirit of his new book, Creating a World Without Poverty, this classic work on the birth of microfinance will contain excerpts from the new book.

Reviews:

In this world of anarchy and chaos, one wonders why aren't the leaders of today utilizing the path Mo Yunus took to change the world around him. This book serves as a great mentor and guide to all those who believe in making a change and creating a difference with their intellect, passion, perserverance and relationships. I wish that all the poor countries in the world gain some ideas from Mr. Yunus. A very engrossing read. You have to finish the book to read through Mr. Yunus's journey in its entirety. The book is simple, sweet and takes you through all the cities and towns of Bangladesh, gives you an insight into the mindsets of both men and women of that society...the struggles, the pains, the successes and the accomplishments. As a reader, I truly wished and prayed that there are many more men and women out there in the world with Mo Yunus's spirit.

I bought this book because I had already read a library copy, and had to have my own. I remember hearing about this remarkable man and his work in the 70's, but to read the whole story, and to know how far his hard work has brought the cause of really helping the poorer than poor was so inspiring. It has engaged me and my family so much so that most of our Christmas giving has been to this cause. I consider it a blessing.

It is a good read, and a powerful reflection of some of the faults of our modern day financial system. The depicted ideas are begining to spread in the corporate world. And the most significantly felt i think, would be Ebay's recent move into the Microfinance industry. Hopefully, this is just the start!!

Mohammed Yunus, the primary author of this book was catapulted into world fame after the Nobel Peace Prize in 2006.This book by him was written in 1998, a good many years before the Nobel recognition. By that time, his project plan had matured significantly and served as a pilot case for small loans in several other countries, distributed over all the continents of the world.In this book, Mohammed Yunus talks of his life in the context of the microcredit programme in an intimate, no-holds-barred autobiography. He begins with his childhood as one of twelve siblings in small town Chittagong before independence, goes on to his life as a Fulbright student in the USA, at the end of which, he lobbied actively for the independence of his home country from the clutches of the then West Pakistan. He then recounts his return to Bangladesh and taking up a professorship at the University of Chittagong.Somehow the academic status and lifestyle did not satisfy the young professor. He wanted to reach out to a wider clientele, to put his knowledge to practice in helping others improve their standard of living. So he started going out to the nearby village settlements and interact with the people on a one-to-one basis in order to find out what they needed and ho he could help them.How this seemingly small step led to the establishment of micro-credit and the Grameen bank as a viable means of global financial interaction is the subject of this book.The journey was not easy. The author was confronted with an incredible amount of resistance at every stage.The author, however, was no fool and his first steps wer cautious and discreet in the extreme. The first spurt of activity was triggered by the famine of 1974, when he took on the daunting task of helping farmers grow a higher yielding variety of rice. This was done, without the benefit of any agronomical background. The above illustrates the lengths the author went to abandon traditional learning methods, taught in University environs. By late 1975, he was "conceptualizing many CURDP programmes including a mass literacy project. I encouraged my students to go down with me into the village and see how day-to-day life could be improved. They could choose a topic and write a research paper for a course credit."As one reads ahead, one notices what the mere will to initiate can accomplish. The first hurdle itself was gargantuan.Establishing a line of communication with the woman in the most poverty ridden families was itself a forbidding task. Much suspicion and mistrust at different levels had to be overcome. There was the natural reticence of the village women dictated by the purdah. To get the women to talk of their lives was in itself a huge step forward. Then came the menfolk who sensed that the initiated changes in their women's self assertiveness, were compromising their own standing in the family. There was also threats from the religious sector, who were finally impelled to give way under relentless pressure from the village community. All in all, this series of small steps leading to big ones, leading to bigger, even gigantic leaps is reminiscent of the lines,'Little drops of water, little grains of sand,Make the mighty ocean and the distant land.'In later sections of the book, the author discusses how the microcredit scheme have worked in different countries. In particular, he elaborates on how microdredit cannot work in developed countries where social welfare is predominant. He attributes the failure to the connection between state sponsored benefit and state required guarantees, showing how these can severely limit the choice available to the citizen living on welfare.The author is also against the mega funding agencies such as the World Bank. He has refused help from them on more than one occasion, preferring to stick to his own independent assets, even so under pressure from his own country's government.All in all, this book is a riveting read and would grace any bookshelf by its presence.Warmly recommended.

Not wanting to repeat the accolades mentioned in the reviews posted I would like to instead share how reading this book and meeting Yunus was a catalyst to some actions I took both on a personal and professional level. The intent is not self promotion or to showcase my efforts. Instead, I am providing ideas and addressing those of you who may find, as I did, that after finishing the last page you are left with a desire to do something. The dilemma was what could I do ......I am not a bank or live in a developing country. I did give copies of the book to friends, colleagues and family but I wanted to do something more concrete. Well, with micro finance "on my radar" I took some actions both on a personal and professional level that I hope are making a difference and are in some ways increasing the visibility and awareness of micro financing. First a little background and comments on the book.....I had the great honor of meeting Muhammad Yunus shortly after he received the Nobel Peace prize in 2006 at an event in Paris sponsored by Planet Finance. Yunus is truly an inspirational person, charismatic in a subtle way, who has touched the lives of many. His enthusiasm is contagious. The book Banker to the Poor is a fascinating read.... humorous, touching and informational as it traces the evolution of the micro finance model from concept (starting with Yunus lending the equivalent of $27 to stool makers) to what it is today with over 7.2 million clients. What resonates with me is the idea of lending versus aid dumps from the World Bank, UN, NGO's and charity organizations. I don't want to discount the millions given as direct charity to the needy but the concept of micro finance creates a sense of pride and responsibility not to mention innovation and creativity. Micro finance can also generate incremental improvement versus charity or outright donations which, in many cases dries up, is short term and results in dependence instead of empowerment. Some actions I took:* I became aware of KIVA (www.kiva.org) an organization that facilitates micro loans (as little as $25) from individuals like you and I to a specific entrepreneur in a developing world empowering them to lift themselves out of poverty. These individuals are in fact showcased on the site where you can see a picture and read about the entrepreneur you have chosen. KIVA is founded by an impressive team of "Social Entrepreneurs". Using technology, KIVA brings the lenders and borrowers together and provides an online community for lenders who are also showcased on the site. Involving my daughter (10) in the decision process we are lending to an entrepreneur in Samoa, so she can buy timber to improve her greenhouse for her flower business. * As President of my alumni association (Thunderbird) I organized an event around Micro Financing with the Managing Director of Planet Rating, a microfinance rating agency, as a guest speaker.* At a university in Paris I run a project based course involving teams of MBA students. Proposing a project related to micro finance the students were enthusiastic and completed a study on micro finance in Europe.* Professionally, I work with individuals in career transition and entrepreneurs in helping them to identify their unique strengths and values and message their brand appropriately both online and offline. Fundamentally, I find that people have a social conscious and want to do something concrete. To this end I suggest lending to a KIVA entrepreneur as a way to concretely incorporate a social conscious into their brand.* As part of my involvement in a Global Telesummit entitled a Brand You World www.personalbrandingsummit.com I am involved in raising $100,000 in loans for KIVA entrepreneurs in the developing world. Incidentally, Kiva was featured on Oprah and is mentioned in Clinton's book "Giving". Having shared how I was inspired by reading this book I would be more then interested in hearing how it inspired you and what actions you took.BernadetteBernadette Martinwww.visibilitybranding.com

Muhammad Yunus believed that every human being had a basic right to credit. He believed in the human spirit and peoples' hard work and honesty when given a chance to sustain themselves above poverty. His accomplishments have proven his theory over and over in several countries to millions of people. Micro-lending will surely be a part of the future success in Africa, Asia, and South America. A modified form of Mr. Yunus' model has worked in the USA, unfortunately, we as Americans aren't schooled nor molded to be basic entrepreneurs. We must change our school systems from teaching how to become good employees to how to become entrepreneurs as well. Mr. Yunus' model includes 5 person groups to help each other and support each other when one gets behind in loan repayments and/or family crisis. This is a very important requirement to micro-lending and must not be excluded when trying to duplicate the success of the Grameen Bank.Thank goodness we have people in our world like Muhammad Yunus to teach us how to treat other human beings.

This book is a testament to the good one can do to millions of people!Poverty belongs in museums! One day, thanks to humanitarians like Muhammad Yunus, poverty will be something of the past and totally extinct, and the next generation will wonder how poverty was ever allowed to exist within our midst. Indeed that will be a glorious day! Professor Yunus recounts his early life living in India, Bangladesh, and then in the United States. He was born in 1940 in British-ruled India. He was one of fourteen children born to devout Muslim parents. His mother was often ill, but despite this, his father never left her. Yunus later obtained a scholarship to study in the States, earned a Ph.D. in economics at Vanderbilt University, and later became a professor. He once commented to his students, "What good were all my complex theories when people were dying of starvation on the sidewalks and porches across from my lecture hall? Nothing in the economic theories I taught reflected the life around me."As a young man he was very involved in the independence of Bangladesh when hundreds of thousands died, and many more after Bangladesh declared itself independent. The country was devastated, and stripped of its natural resources. Professor Yunus quickly left the US and headed to Bangladesh in order to help create a government, and thus get international help and support. He was very concerned about the poor, and decided to help them. He was surprised why banks did not lend them money. Also the majority of the poor couldn't write or read, so they couldn't even fill out the forms required by banks in order to obtain a loan. Grameen Bank (The name means the "bank of the village") was thus started in 1976 as an experimental project to combat rural poverty by providing credit to the very poor. Professor Yunus loaned $27 from his own pocket to forty-two stool makers living in a tiny village. These women only needed enough credit to purchase the raw materials for their trade. Yunus's small loan helped them break the cycle of poverty for good. Throughout the book you'll read of many such success stories. Professor Yunus faced a lot of obstacles in creating his bank. He was accused by the Muslim clergy (Mullahs) of wanting to destroy Islamic traditions, and of promoting Christian values in Bangladesh. Some of his staff were even threatened. This was due to the fact that the bank encourages women to take loans and work, something of a taboo and highly unacceptable to Muslim women living in Bangladesh. In fact, many women were beaten by their husbands for the mere mention of money, let alone taking a loan. Women were also not encouraged to receive an education or work. Professor Yunus says, "All her life she has been told that she is no good, that she brings only misery to her family, and that they cannot afford to pay her dowry. Many times she hears her mother or her father tell her she should have been killed at birth, aborted, or starved. But today, for the first time in her life, an institution has trusted her with a great sum of money. She promises that she will never let down the institution or herself. She will struggle to make sure that every penny is paid back (65)."In 1983 Grameen Bank (GB) was officially established. It is unique in that it has reversed conventional banking practices by removing the need for collateral and created a banking system based on mutual trust. It promotes credit as a human right. Its mission is to help the poor families to help themselves to overcome poverty by issuing them with microcredits (very small amounts, like $7, something a conventional bank would never do). It is offered for creating self-employment for income-generating activities and housing, as opposed to consumption. It is particularly targeted towards poor women. It provides service at the door-step of the poor based on the principle that the people should not go to the bank; the bank should go to the people. This principal is helpful in a Muslim society where women are not allowed to leave their homes without the approval of their husband, and are not allowed to speak with men.In order to obtain loans a borrower must join a group of borrowers, with each borrower recommending another. If one member of the group defaults on payment of his loan, then the whole group is denied further loans! However, to encourage destitute members to join, he/she does not have to belong to a group, no saving is necessary, no weekly repayment is necessary, his/her loan terms are decided by him/her, in consultation with his/her mentor. A member is considered to have moved out of poverty if her family fulfills the following criteria: 1. The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor. 2. Family members drink pure water.3. All children in the family over six years of age go to school or have finished primary school. 4. Minimum weekly loan installment of the borrower is Tk. 200 or more. 5. Family uses sanitary latrine. 6. Family has adequate clothing for everyday use and for winter, and mosquito-nets. 7. Family has sources of additional income, such as a vegetable garden, so that they are able to fall back on these sources of income when they need additional money. 8. The borrower maintains an average annual balance of Tk. 5,000 in his/her savings accounts. 9. Family has three square meals a day throughout the year. No member of the family goes hungry any time of the year. 10. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare. Professor Yunus distrusted dealing with the World Bank. According to professor Yunus, the world bank, with its headquarters away from Bangladesh, does not see poverty, but relies on theories. He also was wary of how they took full control of a country's financial needs. There were a number of major natural disasters in Bangladesh. The 1998 flood was the worst of all. Half of the country was under flood-water for ten long weeks. Grameen borrowers lost most of their possessions including their houses because of the flood. Soon borrowers started to feel the burden of accumulated loans. They found the new installment sizes exceeded their capacity to repay. Grameen Bank repayment started to show quick decline. This was a good opportunity to design a new Grameen methodology, incorporating all the lessons learnt. As a result, Grameen Bank II was created. The bank believes that the poor always pay back their loans, unlike the very rich. On some occasions they may take longer time to pay back than it was originally stipulated. Many things can go wrong for a poor person during the loan period. According to professor Yunus, since the borrower is paying additional interest for the extra time, where is the problem?Grameen Bank has introduced higher education loans for all students who can enter into the higher educational institutions (medical, engineering, etc). Students are made responsible to repay the loans when they start earning. Half the scholarships are reserved for girl students. The remaining 50 per cent is open for both boys and girls. Each year Grameen Bank gives out 3,704 scholarships.Grameen believes that poverty is not created by the poor; it is created by the institutions and policies which surround them. In order to eliminate poverty, all we need to do is to make appropriate changes in the institutions and policies, and/or create new ones. Muhammad Yunus and his Grameen Bank of Bangladesh won the 2006 Nobel Peace Prize. As of May, 2007, Grameen Bank had 7.21 million borrowers, 97 percent of whom are women. With 2431 branches, it provides services in 78,659 villages, covering more than 94 percent of the total villages in Bangladesh.About 3 billion people live on less than $1 per day. Professor Yunus' vision is of eliminating poverty by 2050.This is really a fascinating book and I highly recommend it.

After reading, we bought multiple copies to give away to colleagues working in various capacities in poor areas of the world. Yunus' ideas and experience need to be examined and considered. This is no World Bank/UN/WMF big program aid-dump, but a reasonable, realistic, measured path from poverty to empowerment for the world's poor.

Learn how limiting entrenched Eurocentric thinking can be. Be inspired by the lateral thinking of Muhammad Yunus! A heartwarming read with just a touch too much description of the complexities of beaurocracy, but a must read nevertheless.

I'm very impressed with Mohammad Yunus. He created an entire network of microlending without ever selling out his dreams or ideas to the larger banks or even the World Bank. I found his passion to help the extreme poor to be inspiring. I have a new found understanding and respect of Bangladesh and its' people through his eyes. He is most deserving of the Novel Peace Prize.

This book arrived on time and in great shape, which I was pleased with since it was mailed to a friend as a gift. Thanks!

A saga of how one man can truly transform the lives of millions of a lesser God. The eminent Nobel Peace Laureate, Mohammad Yunus elucidates his path-breaking business model of the Grameen Bank in Bangladesh, which lends without any collateral to the financially and the socially ostracized. His ideology - access to credit is a fundamental human right. What is interesting to note is that 98% of the borrowers are women (way to go, ladies!) and the impressive repayment rate of 97%, which is way superior to that found in traditional banks. I relished the success stories explicating how these industrious women entrepreneurs were able to free themselves from the viscious cycle of poverty not to mention the happy escape from the exploitative and manipulative money lenders and come out on top. Very heart-warming indeed! The borrowers own 90% of the bank. Convinces you that micro-credit is an incredibly powerful tool for eradicating world poverty. Little wonder, Dr. Yunus' successful business model is implemented by so many other countries today. Ergo, this book deserves a chance if you are intrigued by the concept of micro-credit or feel the inclination for some inspiration, you will not be disappointed.

you should read this book not because its exceptionally well written, because it is only competently written. You should read it because it is written by a man who has challenged our business model of helping the poor (and make no mistake, helping the poor is a business model more than a charity model)>There is a reason these ideas rated a Nobel Peace prize, and reading about the thoughts and ideas in the firsst person is more powerful than others' interpretations. So read it to learn, and to expand your thinking.

Mr. Yunnus details how he helped people slowly and on a small basis and with that foundation helped people on a larger scale. The discussion of failure and politics and buercracy are invaluable here. A great book especially if you are studying economics and banking.

This is a truly inspirational story. After reading the book, you will realize the power you have to change the world around you. With passion, patience, and, hard work, anything can be achieved. This is the message that I got from the book.

Muhammad Yunus's story is truly inspirational. In a world where we all too often accept situations as beyond our ability to influence, he demonstrates what one man can achieve with enough compassion and ingenuity. We read so much that is critical of the Muslim world, this book is a timely antedote. We could all learn a great deal from this man's life.

This story is really about courage and strength of conviction. Dr. Yunus showed his courage when he stood up with his peers and helped create the state of Bangladesh. After that, he returned to his country rather than stay in the USA in an easy safe place.That move put him in the middle of the poverty and starvation of his country, and he again showed the strength of his convictions by facing down the beaurocrats and rich classes to begin changing lives. The reason he succeeded is because he used the realism of economics and a reasoned approach. No dreamer, he knew that (as global economics has proven) if people were given access to a free market, and supported in their efforst, they could rise above poverty.I've given my first two copies away, and bought a third. Maybe I can read this one before I give it away!! Read his story and be inspired.

An excellent autobiography of a very interesting man, Muhammad Yunus, a Bengali economist and pioneer of microlending, who won the 2006 Nobel Peace Prize. The book deals with the story of his life: his childhood in Chittagong (his father was a jeweller) in the newly independent East Pakistan (later Bangladesh), his university education in the United States, and most important, how he decided after a horrible famine in 1974 to leave the ivory tower world of academia (he was by then the director of an economics department in a university in Bangladesh) in order to start a program of microlending that would become a huge success, and offer hope to millions of people living in poverty. Thirty two years later, the Grameen Bank he founded would become known throughout the world for its approach to microlending, and get Yunus a well deserved Nobel Prize.

What fascinates me most about Yunus is that he is a do-er, not just a theorist cranking out research papers. This is not a how-to book, but rather a story about Yunus's struggles and successes while starting and expanding Grameen Bank. It is more of an ideological foundation (you can't ignore those attacks on the World Bank and United Nations), but inspirational nonetheless. I highly recommend this book for anyone interested in microfinance.

This book reads like a memoir. It's inspiring and yet factual. Individuals can make a big difference!

Mohd Younous is my hero. Social engineers like Younous are changing the face of the earth in a positive manner. Through his courage and faith in ordinary people, Younous has shown that the poor are creditwrthy and its the lack of credit taht keeps them poor. I love it when Younous debunks all the fancy economic theories and puts his faith in the poor into practice. It must be noted that the Mullahs in Bangladesh are a powerful force and have opposed Mr Younous. But Mr Younous is a true Bengali liberal and a fighter and has shown that welfare of the people is the true religion.Younous is no less than Tagore and Kazi arul in that respect. I share Younous' vision that one day our children will go to museums and see poverty as an extinct phenomenon. I gather that some people have been critical of Grameen. May be they have a point, may be they ahev an agenda. I am no economist to judge. But what I do know is that Younous's vision and courage has an ennobling effect on the reader and motivates many social engineers

I enjoyed Muhammad Yunus's story about the formation of Grameen Bank but it did begin to drag a bit at the end. Not that the story grew less noble with the telling but because it became a repetition of the same story as the concept of micro-lending to the poor was applied to other countries. Yunus deserves so much praise for the idea and making it happen. As much as anything this is a story of overcoming the odds and one man's commitment to an idea.

I really enjoyed this book from an inspirational standpoint. I wasn't necessarily a fan of the writing style but the message is powerful. I think what Mr. Yunus is espousing in terms of micro-loans and showing people "how to fish" is accurate. Quite obviously it has worked for his bank. I believe it would work well in the US if we had more of an entreprenuerial spirit. We teach our young to go to school, get a good education and to work for some one else. This country was founded by entreprenuers and somewhere along the way we lost that vision. I have purchased another copy of this book to give to away. I have highlighted a lot of areas that are powerful...which is most of the book.

It took me several weeks after starting this book to actually get into it. It starts with Yunus childhood but then gets into the political climate of Bangladesh, which is quite boring. Once the author starts talking about Grameen bank and establishing its microcredit system, it gets interesting. Yunus is both an idealist and practicalist and has strong opinions on what government should and shouldn't do. As a government employee for 10 years, I found his opinion on the mark. I found that I worked in bureaucracies that spent money on studies rather than directly helping people, for example. His discussion of socially responsible business is quite interesting, but has a huge obstacle of overcoming the idea that the poor can't/won't help themselves...overall, a great book on a great economic initiative that has directly helped the poor all over the world.

Consulting to the banking industry, I always admire those who find innovative approaches to building profitable financial services businesses serving the poor and unbanked. There are great examples in South Africa and the US. The Grameen story is so inspiring. It provides a ray of hope to the world's impoverished and, by extension, to the entire world.