Photo: Dr Yunus (right) speaking with women from villages. (Pic from grameen.com)
A CHAMPION FOR THE POOR ... I wrote this item and it appeared in The National newspaper of PNG in the Weekender pages on Friday, February 1, 2013.
IN 2009, while teaching young people a bit of Calculus at the local campus
of the University of South Pacific in Nauru, I was drawn into one aspect of the
subject that I was, for more than a decade, uninterested in.
The applications of Calculus (the subject that deals with how fast rates
are changing) in the exercises given in the course books were in
Science/Physics and Economics. I was more interested in helping students with
the science applications which included studying the trajectories or paths of
projectiles and falling objects.
However, on that island nation (at one time was one of the richest
countries in the world) which was coming out of an economic crisis where
billions of dollars of funds and properties were lost due to misappropriation
and bad management by the government, it was obvious that the application of
Calculus to falling objects would not be attractive as its application to
economics, business and money.
You see, the country had no real bank. The national bank was used only
to transact money, including the salaries and wages of government workers.
Transacting money out of or into the country was also difficult and
expatriate workers as well as locals found using the Western Union agent was
more convenient.
It was clear to me then that the young people in class needed more
emphasis in Calculus to deal with money than discussing projectiles.
The situation there on the island of 10,000 people also reminded me of a
statement that a relative told me more than a decade ago.
The relative was studying business economics at the University of PNG when
he told me that a young lecturer in an Asian country had started a bank for the
poor people and had surprised many on how he did that.
I did a search on the internet and found out that the subject of the
story was a Prof Muhammad Yunus of Bangladesh. (I later confirmed with the
relative that Dr Yunus was the subject of his story years ago.)
In 1974, Dr Yunus was an economist at Chittagong University in
Bangladesh. While the US-educated teacher was on a field trip with his students
to a poor village, and interviewing a woman who made a bamboo stools, he found
that the woman had to borrow 15 pence to buy raw bamboo for each stool made.
After repaying the middleman, she was left with only one penny as profit.
Dr Yunus realised that if the woman was to borrow money at much better
rates, she could have made a good sized profit to help her over a period of time
to raise her standard of living.
He realised that there was something wrong with the economics he was
teaching and decided to do something about it.
Out of his pocket, he lent about US$27 to 42 basket-weavers. He found
that it was possible, with the tiny amount lent, to create interest in the poor
villagers to venture into enterprise and as a result pull themselves out of poverty.
As detailed in his biography in www.grameen-info.org, Dr Yunus went against the advice of banks and the government, and gave
out micro-loans.
In 1983, Dr Yunus formed Grameen Bank, meaning “village bank”. The loans
given were micro-loans. They were helpful for the millions of poor people in
Bangladesh because the terms required to repay the loans received were long and
the interests charged were very low.
In Banglandesh today, Grameen has 2,564 branches serving 8.29 million borrowers
in 81,367 villages. Among others, its objectives include:
-
Extend
banking facilities to poor men and women;
-
Eliminate
the exploitation of the poor by money lenders;
- Create
opportunities for self-employment for the vast multitude of unemployed people
in rural Bangladesh; and
- Bring
the disadvantaged, mostly the women from the poorest households, within the
fold of an organisational format which they can understand and manage by
themselves.
The model used by
Grameen Bank is now used in many countries in giving out micro-loans to poor or
low-income earners.
Dr Yunus, who grew up
in a home that extended its hands to the poor, has been a champion for the
poor.
He said: “People were
poor not because they were stupid or lazy. They worked all day long, doing
complex physical tasks. They were poor because the financial institution in the
country did not help them widen their economic base.”
Muhammad Yunus was awarded the 2006
Nobel Peace Prize, along with Grameen Bank, for their efforts to create
economic and social development.
In the prize announcement, The
Norwegian Nobel Committee stated: “Muhammad Yunus has shown himself to be a
leader who has managed to translate visions into practical action for the
benefit of millions of people, not only in Bangladesh, but also in many other
countries. Loans to poor people without any financial security had appeared to
be an impossible idea.”
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