Muhammad Yunus, the ‘banker to the poor’ turned Bangladeshi government leader – Technologist

To understand the remarkable journey of Muhammad Yunus, the “banker to the poor” who was thrust to the helm of Bangladesh by a bloody popular revolution, one must look back to the mid-1970s. At that time, Yunus was an economics professor at the University of Chittagong, in the major southern port city of Bangladesh. It was there that he conceived an idea in a nation where poverty and overpopulation were often seen as inevitable: “I thought we needed to change the lives of the poor,” he recalled back in 1987, smiling as he welcomed Le Monde into his office in Dhaka, the capital. “After returning home from several years in the US,” he went on, “I realized that the government was incapable of meeting the needs of the poorest. And then I thought: after all, why can’t these poor people contribute to improving their own lives?”

This idea came to him after the devastating famine that ravaged his country in 1974, claiming hundreds of thousands of lives at the very least. This tragedy only compounded the suffering of this ancient land of misery and fertility, watered by the Ganges and Brahmaputra rivers, but regularly hit by cyclones and floods.

Pursuing his vision, Yunus founded the Grameen Bank in 1983 – the “village bank” in Bengali – an institution that would lend money to the most needy. His belief was that providing the necessary capital to anyone wishing to set up a business would help lift beneficiaries out of poverty.

‘The missing piece of capitalism’

The inventor of microcredit saw his idea confirmed after meeting a woman making bamboo furniture in a village near Chittagong. She explained that, after paying the traders for the bamboo, her profit margin was almost non-existent. “Her work didn’t allow her to survive,” he observed, realizing that “nobody was going to lend money to such entrepreneurs, as they couldn’t provide the necessary guarantees.”

Yunus confirmed this when he approached local bankers to explain his reasoning. “They laughed when I suggested lending money to the poor,” he recalled, laughing himself at the memory. He didn’t listen to them, of course, and decided to lend money to people he knew. And so Grameen Bank was born. With it came “microcredit” and the concept of “social business,” a development model that Yunus helped popularize.

The difference between Grameen and other banks is that almost anyone can apply for a loan, and women are the main beneficiaries. In rural areas, despite the patriarchal nature of Bangladeshi society, it is women who control household finances. “Women understand poverty much better than men,” explained Yunus. However, he had no intention of becoming a new “Mother Teresa” of Bangladesh: he immediately imposed strict conditions on female borrowers, including a ceiling on the loan amount, non-renewal of loans if the previous one was not repaid, and priority given to landless farmers or those with less than half a hectare of arable land.

You have 58.27% of this article left to read. The rest is for subscribers only.