Reviews
Banker to the Poor: Micro-Lending and the Battle… by Muhammad Yunus
On the plus side, Yunus' passion for eradicating poverty does come through, and I think he is the real deal. He has worked with many politicians and philanthropists, and he names names. As an economist, he is good at explaining what could have been complex concepts and bringing them down to terms that are very understandable and clear. I admire his devotion to working with the poor in a way that is very respectful and preserving of their dignity. It really is a tale of what one man can do to make change, and in that regard, it is extremely compelling.
On the less good side, while the book was a fast read, it also was somewhat boring. I mean how interesting can you make a book about loans be? The answer - - not very. I sort of felt that the book lacked some soul, but I really forgive Yunus because you can't make the truth be something that it isn't. The truth is that if you loan very poor people some money, some industrious ones will develop a cottage industry that is enough to ensure that they eat and that they have a roof over their heads. And in Bangladesh, that's saying a lot. But it isn't really a rags to riches story . . .it's more like a rags to better rags story.
Yunus also feels compelled to share many numerical specifics - - and frankly I think that is appropriate because it lends substance to his book. It's also - - not that interesting.And there is the fact that he has a certain air of self importance that while it may be justified is still slightly annoying.
So all in all, he takes a tough-to-write about topic and does a good enough job with it to publish a book the mainstream public can enjoy. That's pretty impressive. And my hat is off to him for the good he has done for poverty stricken people worldwide.
Follow up:
bureaucratic waste
Millennium Development Goals from the UN
socially conscious entrepreneurship
mentally incapacitated/not able to make their own way?
His efforts began with his effort to do more than lecture on economic theory and actually bring economic benefit to his country. His volunteers idenfied a local example of a village woman who scraped by in life making bamboo stools. But she needed to borrow money for supplies, and then had to pay back that money after her labor, leaving only pennies for herself and her children. The cycle continued on a daily basis. By lending her the money she needed for supplies out of his own pocket, she was able to keep the profits for herself, gradually earning enough to break free of the money-lender and raise her family from total poverty. Through this beginning, he found support to loan very small amounts of money to very poor people, enabling them to become self-employed instead of giving most of the money earned to the middlemen. He chose to deal with the very poorest in his native Bangladesh, and almost exclusively with women, who had the fewest opportunities for success in this society.
The Peace Prize he was awarded recognized that lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.
The book describes how micro-lending has succeeded from this small beginning, and benefited millions, not only in Bangladesh, but also in many countries around the world. He also was invited to the U.S. and intiated efforts during the Clinton years, although the initial efforts were not easy given the background of welfare and charity in this country. He shows the harmful side of a welfare mentality in this country, and how small financial backing to individuals can be a liberating force and bring economic benefit. He also shows how these efforts, while socially responsible and be profitable for banks as well. I found this to be a very enlightening book.
founder of the Grameen Bank
On Pages 140 - 147, Dr. Yunus describes setting up the Tangail branch of Grameen bank, and how the terrorist situation made it very dangerous. In the end the presence of the bank directly contributed to the safety and lessening of terrorist activity in that province.
Elsewhere he mentions that job applicants in Bangladesh had to pay an application fee and another fee to have a job interview! Talk about participating in your own exploitation. How to get around such a practice?
(When I was in Turkey we had to list photos and age on our CV, which is also participating in your own exploitation as I think on it now...)
P. 206 - 207
The Proud Cherokee!! Now I see where my mother got her 'Chief Joseph look' from!!! She would drive me crazy as a small child trying to argue with her, and all she would do was fold her arms and go 'stoney-faced' like the Cherokee women he spoke to in Oklahoma. I always knew then that 1. she was imitating her mother, my grandmother, and 2. I was not going to get another word out of her! Ok, now I see that we've got it honest...
note...
p. 16-17 waste & deception of aid
(renting gov. official-owned places ; Foreign aid budget -> employ & sell own ppl and goods...)
p. 23 aid -> dependency & 'good at negotiating for more aid'
p. 66 waste of deep tubewells: no link to end-user
p. 69 obj. to 'small farmer' 1. male issues only (wow-for a man to say or think of this is amazing!!)
2. 1/5 time = agric. so 80% of time not farming
p. 70 must diff. really poor vs. farmers
p. 71-3 defs/groups: p1 == bottom 20%, p2 ,p3 -cannot help poor & non-poor: poor "elbowed out" by less poor
p. 71 each country needs its own def. of 'poor'
p. 81 'banking untouchables'
p. 88 credit to women -> faster change
p. 91 Grameen req. women to get title to land
p. 92 wife-beating lower
p. 110 (1st pag f ch. 14) -no legal/police/ paperwork
p. 119 Grameen is shareholder/borrower owned
p. 120 TRUST; all borrowers start below poverty line
-poverty in national context
p. 142 takes ~ 2 years to find structural faults
p. 148 eng a social rev.
p 154 / 155 -micro-credit prevents terrorism
p. 157-9 natural distasters not show-stopper
p. 178 9/13 board members illiterate (borrowers)
p. 182 Turkey had non mc in 1998 [[they do now...]]]
p. 190 'charity' -> wage slavery 'can be a prison.'
p. 191 WSEP, Chicago
p. 193 credit -social change
p. 210 RESULTS (Sam Daley-Harris) & CBS 'Sixty Minutes'
chapter 27 1st page: P. 213 "The market always pushes things onto the side of the powerful."
[[but he is not at all anti-mkt...]]]
p. 215 'the dole...robs them...of self-respect'
'poverty...is created by the structures of society'
[[[but participating in it can be a vote for legitimating it... imho]]]
p. 216 -Yunus believes in competition
[[[Yunus (imho) is wrong to say 'competition is the driving...' since we've got good evidence that cooperation works even inside of competition (look at the cartels...)]]]
p. 214 social-consciousness-driven
p. 216 Yunus is right "all human beings are potential entrepreneurs."
p. 217 (accountable maximization) -Barnes would disagree with Yunus: says 2 item max. basket, since can only max. 1 thing effectively...
[[hmmm...]]
p. 219 imho cooperation more effective than compe.
p. 220 defines development via bottom 25% qualies
P. 221 GramenPhone, Grameen Shakti (Energy)
-judge a society by lowest percentile
[[as Ros quoted ...Rawls??? ... on "judge a society by how it treats it's most vulnerable" ]]
p. 224 refs David Bornstein (1996) 'The Price of a Dream'
p. 226 -'The poor work for the benefit of someone who controls the productive assets.'
-unless other help intervenes or they cooperate
P. 228 Frederiko Mayor -UNESCO
to help Grameen Shikkha (Education)
P. 232 Grameen families lower birthrates
Chapter 31 (p. 233) SELF-EMPLOY !!!
p. 234 -back to social theoretical framework
credit -> economic power -> social power
-credit as human right
P. 235 micro-econ. theory w/lbr & capital -firm leaves no self employment
p. 236 econ. denigrate 'informal sector'
p. 246 health care essential
p. 250 mkt: GrameenCheck & Flannel
[[ok, Joe was right, Yunus did create a market...]]]
p. 258 fisheries, etc; Need direction to prevent rich incr.
p. 284 Clinton nixed welfare to help the poor??
P. 285 not true: info. is restricted!!
YES!! -P. 286 1. access to a. credit b. info. c. mkts
2. no passports or visas
Read, Write, Dream, Teach !
ShiraDest
19 February, 12016 HE
founder of the Grameen Bank
On Pages 140 - 147, Dr. Yunus describes setting up the Tangail branch of Grameen bank, and how the terrorist situation made it very dangerous. In the end the presence of the bank directly contributed to the safety and lessening of terrorist activity in that province.
Elsewhere he mentions that job applicants in Bangladesh had to pay an application fee and another fee to have a job interview! Talk about participating in your own exploitation. How to get around such a practice?
(When I was in Turkey we had to list photos and age on our CV, which is also participating in your own exploitation as I think on it now...)
P. 206 - 207
The Proud Cherokee!! Now I see where my mother got her 'Chief Joseph look' from!!! She would drive me crazy as a small child trying to argue with her, and all she would do was fold her arms and go 'stoney-faced' like the Cherokee women he spoke to in Oklahoma. I always knew then that 1. she was imitating her mother, my grandmother, and 2. I was not going to get another word out of her! Ok, now I see that we've got it honest...
note...
p. 16-17 waste & deception of aid
(renting gov. official-owned places ; Foreign aid budget -> employ & sell own ppl and goods...)
p. 23 aid -> dependency & 'good at negotiating for more aid'
p. 66 waste of deep tubewells: no link to end-user
p. 69 obj. to 'small farmer' 1. male issues only (wow-for a man to say or think of this is amazing!!)
2. 1/5 time = agric. so 80% of time not farming
p. 70 must diff. really poor vs. farmers
p. 71-3 defs/groups: p1 == bottom 20%, p2 ,p3 -cannot help poor & non-poor: poor "elbowed out" by less poor
p. 71 each country needs its own def. of 'poor'
p. 81 'banking untouchables'
p. 88 credit to women -> faster change
p. 91 Grameen req. women to get title to land
p. 92 wife-beating lower
p. 110 (1st pag f ch. 14) -no legal/police/ paperwork
p. 119 Grameen is shareholder/borrower owned
p. 120 TRUST; all borrowers start below poverty line
-poverty in national context
p. 142 takes ~ 2 years to find structural faults
p. 148 eng a social rev.
p 154 / 155 -micro-credit prevents terrorism
p. 157-9 natural distasters not show-stopper
p. 178 9/13 board members illiterate (borrowers)
p. 182 Turkey had non mc in 1998 [[they do now...]]]
p. 190 'charity' -> wage slavery 'can be a prison.'
p. 191 WSEP, Chicago
p. 193 credit -social change
p. 210 RESULTS (Sam Daley-Harris) & CBS 'Sixty Minutes'
chapter 27 1st page: P. 213 "The market always pushes things onto the side of the powerful."
[[but he is not at all anti-mkt...]]]
p. 215 'the dole...robs them...of self-respect'
'poverty...is created by the structures of society'
[[[but participating in it can be a vote for legitimating it... imho]]]
p. 216 -Yunus believes in competition
[[[Yunus (imho) is wrong to say 'competition is the driving...' since we've got good evidence that cooperation works even inside of competition (look at the cartels...)]]]
p. 214 social-consciousness-driven
p. 216 Yunus is right "all human beings are potential entrepreneurs."
p. 217 (accountable maximization) -Barnes would disagree with Yunus: says 2 item max. basket, since can only max. 1 thing effectively...
[[hmmm...]]
p. 219 imho cooperation more effective than compe.
p. 220 defines development via bottom 25% qualies
P. 221 GramenPhone, Grameen Shakti (Energy)
-judge a society by lowest percentile
[[as Ros quoted ...Rawls??? ... on "judge a society by how it treats it's most vulnerable" ]]
p. 224 refs David Bornstein (1996) 'The Price of a Dream'
p. 226 -'The poor work for the benefit of someone who controls the productive assets.'
-unless other help intervenes or they cooperate
P. 228 Frederiko Mayor -UNESCO
to help Grameen Shikkha (Education)
P. 232 Grameen families lower birthrates
Chapter 31 (p. 233) SELF-EMPLOY !!!
p. 234 -back to social theoretical framework
credit -> economic power -> social power
-credit as human right
P. 235 micro-econ. theory w/lbr & capital -firm leaves no self employment
p. 236 econ. denigrate 'informal sector'
p. 246 health care essential
p. 250 mkt: GrameenCheck & Flannel
[[ok, Joe was right, Yunus did create a market...]]]
p. 258 fisheries, etc; Need direction to prevent rich incr.
p. 284 Clinton nixed welfare to help the poor??
P. 285 not true: info. is restricted!!
YES!! -P. 286 1. access to a. credit b. info. c. mkts
2. no passports or visas
Read, Write, Dream, Teach !
ShiraDest
19 February, 12016 HE
I received this book through a Goodreads giveaway. Although encouraged, I was under no obligation to write a review. The opinions I have expressed are my own.
He devised it as a way of avoiding some of the negatives of capitalism and endless growth. But it does not cover the risk of loss in the startup phase. Only big corporations can use the model. It furthers concentration and uncontrolled growth. It will tend to become a scam by which the powerful greenwash their power.
This weekend I attended the Bottom Billions | Bottom Line Conference hosted by Seattle Pacific University’s Center for Integrity in Business. The event served as a convergence zone between business, nonprofit organizations, and the academy seeking to better understand ways that business can help alleviate world poverty.
Of the many interesting subjects discussed at the conference, the topic of microfinance seemed to continuously echo through my head. For those unfamiliar with the term, microfinance occurs when banks or nonprofit organizations loan small amounts to the poor, helping them to use these miniscule amounts of capital to begin income-generating endeavors.
Muhammad Yunus, founder of Grameen Bank and author of Banker to the Poor, observed that the only thing the poor lacked was opportunity.
He writes,
“When you hold the world in your palm and inspect it only from a bird’s eye view, you tend to become arrogant – you do not realize that things get blurred when seen from an enormous distance. I opted instead for “the worm’s eye view.” I hoped that if I studied poverty at close range, I would understand it more keenly.”
Charity vs. Microfinance
Without capital, the poor would take a loan from a moneylender at exorbitant rates in order to partake in the economy. At the end of the day, these people took home pennies to support a family. Yunus figured that if he could loan these slight sums at low interest rates, the poor could enjoy selling the products of their labor on the open market, thus creating economic capital and a trail out of poverty.
Charity, on the other hand, gives freely without expectation of return. Many, though, have suggested that pure charity does not eradicate poverty, because the poor become dependent on receiving aid. Blogger Filip Spagnoli aggregates international development aid on his website. The evidence he has compiled suggests that the amount of aid contributed to these developing nations is staggering, and yet economic growth is not a result.
Would development function differently if aid came in the form of a loan instead of charity? Yunus believes that loans to the poor provide the best investment. Many stuck in the cycle of poverty are smart and hardworking; they just need the money to start. While big banks typically consider micro-loans to be both risky and inconsequential, Yunus’ experience argues that the poor possess the highest incentive to repay their loans.
Of course, when unforeseen problems such as natural disasters and economic meltdowns place the poor in positions where they are unable to repay the loan, Yunus extends grace and loans more money to help the poor back on their feet. In this way, microlending encourages entrepreneurial spirit. Where charity gives the widow a fish, microfinance engages in teaching the widow to fish.
What Is the Best Thing?
Although charitable giving in and of itself is never a bad thing, I do wonder if it is the best thing. Of course, a free gift without expectation of repayment carries the highest blessing for the receiver, yet long term, I wonder if microloans create a better society. Certainly, charity is necessary for the destitute – the people who are so poor that any money loaned would be used to keep them from dying. Yet, the moderately poor need a kick start and microlending seems to be the best option in alleviating these struggles.
Yunus writes Banker to the Poor in an autobiographical tone. He tries his best to position the book as a personal success story in the ongoing battle against poverty. It certainly seems like his position could and should be implemented worldwide, yet Yunus writes with a touch of humility. If you are interested in ways to eradicate poverty outside of giving to your favorite nonprofit, I suggest that you read this book.
Originally published at http://wherepenmeetspaper.blogspot.com/
Author: Muhammad Yunus
Publisher: PublicAffairs (2008)
This is the second book by Muhammad Yunus that I have reviewed for Letters on Pages. I reviewed his first book, Banker to the Poor, which was basically a biography of Grameen Bank. Yunus founded the Grameen Bank, which provides microcredit to the poor people of Bengladesh and the rest of the world. But you should remember that anyway, seeing how I just wrote that review pretty recently!
Yunus' second book, Creating a World Without Poverty: Social Business and the Future of Capitalism, is a thesis statement on social business. Yunus believes social businesses will be the wave of the future of capitalism. The key tenets of social business is that it is a "no-risk, no-return" investment. There is no risk or return because the investors of the business get all of their initial investment back, with money that the social business made in "profit". Eventually the business becomes self sustaining...relieving the need for investors.
Yunus certainly recognizes that these businesses will need investors who are more interested in helping underprivildged people than making a huge ROI. Of course, the basic idea of capitalism is that the company is run with one goal: maximize shareholder return. So I guess social business is capitalism-lite.
The book was pretty interesting and had a lot of cool ideas. I am sure they will take eventually, especially as people are becoming more conscious of social issues and stuff like that. Especially as they relate to business. There were some pretty slow parts of the book though...and Yunus gets a little preachy at times. But I suppose he has earned that right considering all he has done.
I like the idea of social businesses as much as charities. I think a social business could probably provide more service than a charity because they can become self sufficient. Neat stuff.
Rating: 3.5 out of 5
--------------------------------
This review, and others, can be found at www.lettersonpages.com
In very poor areas of the world, like Bangladesh...where this book takes place, it is very difficult to get out of debt and into a cycle of self-sustainability. Loans are available to people by local "lendingmen", but they generally charge extreme interest rates making it nearly impossible to be relieved of a poverty stricken life. That's where Grameen comes in. They offer the villagers loans at 20% interest...with no collateral or previous credit. They also do not require the borrowers to pay back at any particular time. Of course, they set up a program for the borrowers to follow, and if they do not repay the loans at all, they can't borrow again. But Grameen boasts over a 98% repayment rate, which is outstanding.
These loans allow for the villagers to start their own businesses doing what they already know how to do. They weave baskets, make food, etc.. These loans allow the borrowers to purchase raw materials and make a profit...and repay the loan. There are plenty of success stories where people have broken the poverty cycle and now live self sustained lives.
One interesting aspect of Grameen Bank is that they lend predominantly to women. This causes some issues in these poor villages because women are not generally considered worthy of handling money or running businesses. They are pretty much second class citizens. But what Grameen found out was that lending to a women had a much larger impact than when they lent to men. Yunus said that when a man would make extra money he would spend it on himself. But a women would spend the money on her family or housing improvements. For some reason, when I told my wife that story...she wasn't surprised. Weird.
The book is actually Yunus' life story and how he came to start Grameen Bank. Yunus is a fascinating person, and I would venture to say that by creating the micro-lending culture, he has done more to alleviate world poverty than all the governments combined. He is an amazing man, who was recognized as such when he won the Nobel Peace Prize in 2006.
If you are interested in reading more about micro-lending...read this book. I also recommend getting involved with Opportunity International, a US based micro-lending organization. I believe you really are changing lives when you donate your time or money to these organizations.
Rating: 5 out of 5
-------------------------------
This review, and others, can be found at www.lettersonpages.com
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