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Book Review: Banker to the Poor by Mohammad Yunus

Banker to the Poor narrates the story of how the Grameen Bank was born, through the eyes of its founder, Mohammad Yunus. It is in fact, his auto-biography, from 1940 up to 1998.

It begins with his childhood story: a rather poor boy in the Chittagong area, previously in East Pakistan, where he had numerous brothers, a hard-working father and a mother, who from a young age, suffered from a mental illness.

Thanks to a high score at a national contest, Yunus was offered a place at a very good school and from there he went on to university, winning the Fulbright Scholarship to study in Colorado, US.

Yunus was a quiet, studious economist who in the 1970s participated in the gathering support in the US for the creation of Bangladesh. His advocacy work during the years of the Bangladesh Liberation War was only the beginning of his life as a leader and working for the poor.

From 1976, he began his microfinance work, established the Grameen Bank in 1986 and in 1998 held a monumental Micro-credit Summit in Washington DC, in which three thousand people participated and committed to reach out to a hundred million people by the year 2005.

This 304 page-long book, separated into short chapters, makes you realise that one does not have to be born in a privileged environment to become an inspirational hero, like Mohammad Yunus. What struck me the most about Yunus’ story, is how he was not necessarily a leader from the start.

He was going towards the academic path, happy to become a university professor and it looks like life events and the people surrounding him, pushed him to become a leader, until later he was convinced of his call for microfinance and consciously led the way. For this, it was somewhat comforting to read that he was initially quite an anti-social person, who loved watching television.

You do not have to be born into the Kennedy clan, where children are raised to become charismatic leaders, in order to successfully realise your dreams at a global level.

Having said that, it is not to be forgotten that the Grameen Bank was not built in a day. As a matter of fact, it took a lot of patience and time for Yunus to bring the Grameen Bank to the solid institution that it is now. Negotiations with government officials and prospect donors took months, if not years, and most importantly, his proposals for projects or funding were rejected multiple times and yet he persisted.

Also, for Yunus, microfinance is not just a job but a mission, where he has been dedicating his time, night and day, often living in disadvantaged conditions for lengthy periods, in order to grasp the essence of the borrowers. That is true determination and personal commitment, which perhaps are the attributes that are missing in people who have good intentions, but yet do not succeed.

Two poignant arguments that Yunus makes, are that he is against aid or charities and welfare schemes. He is against aid because he believes that giving aid to the poor puts them in a position of victimisation and dependence. Also, he has been witness to aid money trickling down with few results, due to high levels of corruption.

Yunus is also against welfare schemes, which personally took me by surprise. Again, here, his argument is that it puts the recipients in a state of mere survival, under conditions where they are not allowed to receive loans to start up their own business. As a result, Yunus claims that in order to remain a valid recipient of these welfares, people have been blocked from trying to achieve more in their lives.

We can say that the book, by now, is slightly out of date, as he speaks naively of the power of the internet and telecommunications and his objective for the microfinance sector to reach out to a hundred million people by 2005. I wonder if that objective was reached and believe that the books he published after 1998 will touch upon that for sure.

What makes this book sound out of date now, however, is mainly the changed conditions in the world following the global financial crisis of 2008 and the growing criticism about microfinance which peaked in 2010 with the resignation of Yunus himself from his CEO position at the Grameen Bank.

In this book you can feel Yunus fully convinced that microcredit can eradicate poverty and yet in following years there have been studies proving that microfinance does not have a significant impact in reducing poverty. Also, the backing of the funds behind microfinance institutions may now have to come from alternative sources than the traditional ones, which have been multilateral agencies, national governments and philanthropic organisations, since they all seem to be tighter on cash compared to the past.

In all, Banker to the Poor is about an economist who, from being a ‘bird-eye view professor talking about fancy theories’, turned into having a ‘worm-eye view’ of economics. This book will always remain a number-one read for any of us interested in microfinance, as the founder of this movement does an excellent job in narrating his success story in simple and often personal words, which allow the readers to feel connected to him. It will be interesting to see how Yunus’ ideas may have changed post this publication in 1998.

I will now move on to read another well-recommended book, by an Indian economist based in MIT, Abhijit Banerjee (and Esther Duflo), called Poor Economics; Barefoot Hedge-fund Managers, DIY Doctors and the Surprising Truth about Life on Less Than a $1 a Day. When I heard a talk by Banerjee about this book I was struck by his research results, which said that most poor would like to find employment in the public sector and by his anti-microfinance stance.

The research Banerjee conducted sounds rigorous and for this I look forward to the read, but for the moment, I would be adamant about the important role microfinance has in giving the poor the opportunity to be self-employed because, even if they want to have a salaried job in the long run, they are essentially making themselves more employable by improving their economic status and entrepreneurial skills, thanks to enrolling in microcredit schemes. Let’s see if Banerjee changes my opinion.

Ayako Iba

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