Wednesday, July 14, 2010

Book Review: Banker to the Poor: Micro-lending and the battle against world poverty (Muhammad Yunus)

Being Filipino, I know that growing up in a developing country meant witnessing poverty everyday – from the beggars knocking on your window as you drive to school in the morning, the squatter areas you pass along the way, down to some of the feature sob-stories in the evening news.

It is easy to run into people who have grown desensitized after years and years of having such in-your-face encounters with poverty, while others grow angry at the poor’s supposed laziness and lack of initiative to make things better for themselves.

Surrounded by many people who hold opinions like these, reading Muhammad Yunus’ story in “Banker to the Poor” is refreshing. He is, as my WYA friends would put it, “angry at poverty, not at the poor”.  It is clear to him that the problem is not the poor -- people are not problems to be solved. The problem is their poverty. 

When you begin from that different starting point of empathy, suddenly you see things differently. And then, fresh answers or new creative ideas will begin to surface.

Not subscribing to the usual condescending view that poor people are poor because they are lazy, Yunus gives a differing opinion: “The fact that the poor are alive is clear proof of their ability.”

Of course, one can never make a sweeping statement about the poor. It is true that some of them may be lazy, or some of them may be addicted to too many vices. But the point is, that’s just some of them. Not all of them.

On the other end of the spectrum are the poor who work hard all day, and whose street smarts prove that they do have some mental prowess despite not being educated in the formal sense. What of them who have made efforts to help themselves but still end up stuck in the same cycle of poverty? Only someone from a standpoint of empathy could look beyond the condescending stereotypes and actually take the time out to observe and listen to their stories.

For Yunus, it was the story of Sufiya that left him puzzled and challenged him to dig until he got to the core of the “why” behind things: 
“People like Sufiya were poor not because they were stupid or lazy. They worked all day long, doing complex physical tasks. They were poor because the financial institutions in the country did not help them widen their economic base.”
And that triggered this economics professor to take a second look at his profession, his country, and the financial institutions within it. He saw how there was great knowledge available to people in his profession, and yet he could find no one directing these brilliant economic minds to help alleviate the poverty that exists right outside the university walls. He saw how there is a big market of small entrepreneurs in need of loans, and yet traditional banking institutions did not allow access to those who needed it most. He began to question one thing after another – basic assumptions, processes, systems, belief sets…

And when he found that society and the system were unable to adjust to the poor, he went out and decided that it was time to create an alternative system that placed the poor at the very heart of it. I think this conversation he had with a traditional banker illustrates this quite well. He narrates: 

          "It seems to me your banking system is designed to be anti-illiterate," I countered.

          Now the branch manager seemed irritated. "Professor, banking is not as simple as you think," he said.

          "Maybe so, but I am sure that banking is not as complicated as you make it out to be."

And so he set out to do begin his microfinance projects that eventually lead to the creation of the now famous Grameen Bank.

Time and again on this blog I have mentioned how I love it when people take their areas of expertise and apply it in such a way that it affects meaningful and lasting social change. But what I admire about Yunus more is the fact that more than just applying technical expertise, he also placed an emphasis on keeping the person at the center of his operations, consciously developing systems in such a way that the poor are allowed to conduct themselves in a dignified manner all throughout the loan and repayment process. Of primary importance was not making the poor richer, but of affording them the opportunity to reclaim their right to live dignified lives.

He says of his own employees and clients of Grameen Bank:

“Observing this phenomenon, one cannot but wonder how an environment can make people despair and sit idle and then, by changing the conditions, one can transform the same people into matchless performers.”

Once again, people are not the problem. Poverty is. Solve the poverty, and you will see the people flourish.

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