The Orbis

Media Credit: Photo by Michael Robie/Orbis [Click to enlarge]

The 1960s were a decade of change: The Civil Rights Movement. Vietnam. Flower Children. And the Grameen Bank. In 1965, Dr. Muhammad Yunus, who received his PhD. in Economics from Vanderbilt, founded the Grameen Bank and pioneered micro lending to the poor. Speaking at Vanderbilt on January 28th, Yunus detailed several ways the Grameen Bank has succeeded beyond its critics wildest expectations.

Microcredit is often touted for its successes in banking for the poor. But what is forgotten is the success the Grameen Bank has had in other areas. Yunus discussed in length how the Grameen Bank approach is criticized but has succeeded every time.

For example, one focus of the Grameen Bank is the children of Grameen Bank beneficiaries. Yunus explained how the Grameen Bank has a "sixteen decisions" members commit to, one of which is "we shall send our children to school."

Since they began their work, the Grameen Bank has encouraged students to go to school. But Yunus soon realized that telling children they should and helping them to actually do so were completely different matters. "Then it dawned on us that we'd missed the whole thing. So we came up with scholarships. And then we introduced the student loans. [For] any Grameen Bank child [that] goes into higher education, their entire education is financed by [the] Grameen Bank" Yunus said.

In 2004 Grameen began to focus on beggars. Yunus quickly discovered 4,000 to 5,000 beggars, and decided that logistically the Bank could take on one beggar for each member of the staff. The approach the Bank takes with beggars is simple: turn begging into selling.

Now, the Bank loans out money to beggars so that they can sell goods as simple as cookies and soft drinks door-to-door for a profit. Yunus shared a conversation he had numerous times with different beggar women: "I asked several of them ‘do you feel shy?' They said ‘when I used to beg, people would just talk through the window. But now when I sell they open the door and let me sit on a stool.'"

Recently the Grameen Bank has started working in the healthcare sector. Yunus realized that poverty and poor health go hand in hand, so the Grameen Bank decided to start offering health insurance.

Currently the health care program is working in 30 different locations. Each borrower pays $3 a year and the entire family receives coverage. In the 30 spots the Grameen Bank is working, their health insurance program covers 80% of costs. The Grameen Bank is also working with the Japanese to build two hospitals in Bangladesh.

Revealing his sense of humor, Yunus remarked "then I realized 42 million people in the U.S. don't have health insurance. And I thought maybe we'll offer them health insurance."

Yunus articulated how capitalism has gone wrong. He explained that the West interprets capitalism too narrowly. "In the theory we've got, business needs business to make money. If you are in business, you are doing it to make money. We need two kinds. Business to make money, and business to do good for people" he said. Yunus believes that business to do good for people could be quite profitable.

Yunus closed by explaining the root of poverty: "People ask, how do you get into poverty, how do you get out of it? And I say poverty is not created by poor people, it's created by the system. It's caused by us, the people who are running the world. The institutions we have built policies we have made, Universities. Poverty is created by something else, and they are the victims."

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