Muhammad Yunus, Grameen Bank and the Nobel Peace prize.

In July of 1972, a young professor returned from the US to his native and newly independent Bangaladesh to be part of the building of a new Nation. He joined the Chttitagong University to teach Econmic theory. But in 1974 the great famine hit Bangladesh. Combined with the oil crisis of 1973 all economic structures started to collapse. Hundreds of thousands were dying. Prof Yunus saw no point in teaching antiquated western economic theories that had no relevance the reality around him. So he and his students started to tarvel to the nearby villagers to help. In that period he discovered people that were caught in the economic trap of moneylenders. Taking micro loans to barely survive, but could never pay off. And so became slaves to the money lenders for the rest of their lives. Prof Yunus and his students made a study of of the number of such families in the two villages next to their campus. They found 42. They calculated the total amount these families had borrowed.
The total sum was $27. For want of $27, forty two families were living below the poverty line in conditions of abject slavery. Muhammad Yunus gave the families $ 27 and freed them from a life long bondage to poverty. And the first seeds of the Grameen Bank were sown…


The bank was formed on principles that will make a normal banker laugh. Lend (not give) money only to those that are destitute and stuck in the poverty trap. To those that can offer no security. To those that existing banks would not even acknowledge the presence of. To those that society has given up on and turned a blind eye to. To women that actually have never handled money before. To beggars on the streets. And when they return the money, give them more to build their lives even better. So was born the the philosophy of ‘microcredit’, a system that has lifted the lives of 100 million people world wide across six continents.
Today the Grameen Bank that has continued with exactly the same principles. It has given loans to over 7 million people that were stuck in the poverty trap in 78,000 villages in Bangladesh. 97 percent of the borrowers are women ! Since it opened Grameen Bank has given loans to the poor and destitute worth $ 6 billion. The repayment rate is a mind boggling 99 % !. Compare that to the loans given by IDBI to companies in India that have been bankrupted by their owners by illegally transferring their assets overseas. Grameen Bank has made a profit in almost every year of operation since it’s inception. It has refused to accept donor money for the last 15 years, and deposits are at a comfortable position of 156 % of outstanding loans. Compare that with the subprime losses, born of the greed of the great US banks !
And guess who owns the Grameen Bank ? You are absolutely right in being astonished. The borrowers ! The destitute, the beggars, the women that had to be persuaded to actually even touch money ! They now collectively own a major bank. All this goes to prove one thing. That the success of an enterprise has absolutely nothing to do with the profit motive.
I have never been so moved by a speech as I was by Prof Yunus at the YPO in Mumbai yesterday. His speech followed mine. I had tears in my eyes as he talked about the giving life and an honourable living to the poor of the world. Surely that is the effect that Gandhi must have had in his talks.
How can I bring these ideas in the work I do ? I am raising a fund now, where one of the prime motives is to use technology to bring good primary education to every child in India through interactive classrooms. There is so much to learn from this man. On his understanding of a completely different economic viewpoint. On his commitment. On his compassion.
He has invited me to Dacca to study how his people are motivated – wow !
Shekhar

16 thoughts on “Muhammad Yunus, Grameen Bank and the Nobel Peace prize.

  1. Good Morning Shekhar…The morn seems still…cant hear the birds….
    ‘Standing Ovation’ for
    ‘Prof Yunus’
    Hugsss Shekhar..
    Brrr tis cold….

  2. Great Post Shekhar. Please also let me know how one can contribute to the fund.
    Now coming back to technology front I am sure there would be great ideas with you. One thing that amazes me is that why existing technology is not used.
    Why is today no recording of courses from educational institutes and just putting those videos to YouTube.
    This may sound stupid as the question arises how will the poor access using broadband. My take is once great information is collected the distribution will be easy given that mobile phones are reaching evrywhere. The first step is to collect great material. So there needs to be a special camcorder which can record courses in high quality.
    I think IIT has started this recording courses for higher education but it can be done for all levels.
    Thanks
    Vishal

  3. A very inspiring story. But astonishing that goodness pays. Has to be a rare case 🙂

  4. Dear Shekhar,
    Wonderful post and I totally agree with you on everything. I believe passion and focus are the main drivers of the success of a corporation and definitely not the profit motive, but there definitely needs to be a profit model to succeed.
    For almost any big idea to work we have to trust a lot of people and Gramin bank took the big risk of giving money to people who really needed it, and gave it in good faith and with good intentions. This means a lot to anyone who has a heart and truly needs the money.
    Gramin Bank did what this quote wonderfully says, “Trust men and they will be true to you; treat them greatly and they will show themselves great.” – Ralph Waldo Emerson. They trusted men and they showed themselves great by repaying.
    Socialism and benevolence have their benefits to uplift people from extreme penury to sustainability, but ones we are out of that only capitalism can take you to the world of abundance. We in India are prospering not because the govt. gives loans to the poor but because there are tons of new jobs that have been created by entrepreneurs and the middle class has money to spend. I just came back from my weekly trip to “Big Bazaar” and there is hardly enough space to stand in that place with so many customers buying anything from doormats to plasma TVs.
    We definitely need to help the poor, but from there on people have to take responsibility for uplifting themselves to any level they want to. That is what has created America and ‘wealth creation’ is a certainly something that everyone and every country can learn from them. It takes greatness and enterprise to execute such a big and noble idea like Gramin Bank but we need lots of entrepreneurs like him to truly transform a country and take it to glory.
    Best Regards,
    Himanshu

  5. Hi Shekhar,
    Watched most of your movies-liked Bandit queen and actually appreciated her story only then!! Loved “4 feathers” and “Elizabeth” and so would love to see your production of “Katherine” by Anya Seton. Please do read this classic romantic real life story of John Of Gaunt of the Plantagenets and the children of these 2 who went on to become kings and Queens of England and Europe.It is a rich, raw, powerful, lovely romantic story and I can see Nicole Kidman as Katherine and the movie would bring to life Chaucer and his pilgrimages and stories. Please make a 6 hr production of this material. I hope to see it soon:) Thanks indrani in Texas
    I could mail you the book if you like but here is the Amazon link to it:
    http://www.amazon.com/Katherine-Anya-Seton/dp/155652532X/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1202065914&sr=8-1
    and the amazon review:
    “This classic romance novel tells the true story of the love affair that changed history—that of Katherine Swynford and John of Gaunt, Duke of Lancaster, the ancestors of most of the British royal family. Set in the vibrant 14th century of Chaucer and the Black Death, the story features knights fighting in battle, serfs struggling in poverty, and the magnificent Plantagenets—Edward III, the Black Prince, and Richard II—who ruled despotically over a court rotten with intrigue. Within this era of danger and romance, John of Gaunt, the king’s son, falls passionately in love with the already married Katherine. Their well-documented affair and love persist through decades of war, adultery, murder, loneliness, and redemption. This epic novel of conflict, cruelty, and untamable love has become a classic since its first publication in 1954.”

  6. Dear Shekhar,
    As always, excellent blog. Very motivating and touching. Success of Grameen Bank also shows the high human values in Bangladesh. However, I have a query to be clarified. I always wonder why bangladeshis hate India? Isn’t the same ‘Prof Yunus’ who said that India has done no good to bangladesh. And on our part we have honoured Prof. Yunus with a Gandhi Peace prize even before he got his nobel prize. After all aren’t we the country helped them liberating from pakistan(I don’t really if it was a good thing?). Now, Bangladesh is home to number terrorist organization directed against India. Why??? Isn’t a good bilateral relationship with India good for them?
    Shekhar, could you please clarify me on this issue. May be this my misconception. Since, you talked about Prof.Yunus so generously, you are the right person to talk about this.
    Thanks,
    Regards,
    Sree

  7. i was also moved in the same way when i read about this man in an international magazines cover story.. now further is how to bring similar soulful ideas in the work you do i.e. cinema…certainly u can and that is why i said u haven’t yet made the film that U CAN.

  8. A truly inspiring story. This only strengthens my belief that what you give to the world, ultimately comes back to you. Trust begets trust and greed begets greed.
    Cheers to Mohd. Yunus & such clear thinking!
    Navin

  9. Dr. Yunus’ work in the area of micro-credit and recognition of his efforts spawned the evolution of a whole industry around micro-finance and banking for the *unbanked* populations of the world…and, concurrent evolution of concepts such as *social venture funding* and *socially responsible investing*. Consider this…according to a recent Boston Consulting Group study, 65% of India’s population does not have access to basic banking services…in 2007 Sequoia Capital invested $11.5 million in India’s SKS Microfinance which provides loans to over 600,000 members in over 7000 rural villages (http://www.cnbc.com/id/17844093/). I suspect this was not all altruistic in intention, but what’s worth noting is the significant departure from traditional assessment and funding criteria by the investment community and the possibility of access to private equity for social causes. It is heartening to know that there are pure play capitalists who are willing to consider *triple bottom line* benefits…to look beyond purely financial returns, and consider investments that could yield broader social, emotional and environmental returns as part of their investment portfolio.
    Kudos to those that can create such funds, make investments and/or contribute on a large enough scale for single, double or triple bottom line return expectations. For others who want to be more altruistic with their contributions, there’s technology that can empower you to do so from the confines of your living room. Consider one such from the work of a non-profit called Kiva – an organization that empowers those inclined (and able) to share their abundance & make a difference to the lives of the underprivileged many. A bridge to connect the haves with the have-nots. Sort of micro venture-capital but with an upside on emotional returns vs. financial, for the giver. Sort of philanthropy where your money does not really leave you but has the potential for greater impact in the world, than just giving alms – also attractive to those who cannot spare their change but can part with it for a few years…may be.
    While India is still underserved through Kiva, it’s impressive to see how technology can now be leveraged by potentially every [able] individual to integrate the preaching of diverse philosophies about “serving the needy” into their every day lives — without much effort on the part of the giver, but in an empowering way for the receiver.
    Himanshu, your views on capitalism to propel forward to lives of abundance is well-taken. But, I think the kind and scope of support from a Grameen type of effort is to those deprived to a point of hopelessness. Exaggerating to make a point, it’s the kind of hopelessness when one is abandoned to, say, solitary confinement in a dark cell. That you have hands, and feet, and eyes, and much more of God-given potential to do much with all of it becomes irrelevant. All that matters is a ray of hope and a helping hand to prop you up from a sense of darkness and hopelessness. Yes, a lot more needs to happen to alleviate inequities in the world and stimulate wealth creation and upward mobility…nevertheless, at a certain hopeless state of inequities, labels such as capitalism, socialism, capitalistic benevolence etc., seem to be just concocted phrases — what really matters is doing whatever it takes to uplift lives from a vicious cycle of hopelessness, to one of dignity and honor…even if that means turning upside down generally accepted/followed norms and practices and labels.

  10. sree, i think ur question requires an in depth answer, and I don’t think I have enough information to give you one. Perhaps one of our other bloggers can answer sree on why there is terrorism directed against India in Bangladesh ? Shekhar

  11. I hadn’t read much about Dr Yunus, but I have now! What a great achivement, even more underlined by most of the entrepreuners being women. I cannot imagine employees of a bank going door to door to make their support and guidance available. This is so much the need of the hour. I hope you take up the invitation and gain more insights into such a novel concept.
    A fund having primary education focus is a great idea. Yes, do let us know how to to contribute. A question, how would it help children whose parents are too poor to send them to school..

  12. Hello Mr. Kapur,
    Kindly add me to your list of n number of people who have always enjoyed your movies – the ones you make and even more so, the ones you star in!
    And now, this world of blogging has reduced the 6 degrees of separation that exist between us 🙂 It was a pleasure reading your posts especially this one on Prof. Yunus. I came across this article when googling for information on Prof. Yunus. I was also quite intrigued by your creation of a fund on primary education. I would love to know more about it and maybe even network in some manner.
    I have taken the liberty to tag you as a ‘confused traveler’ (as you prefer to call yourself) in my blog.
    Best Wishes – Nehal

  13. i think you are the only film maker who must make filming on saddam hussain.
    i salute to you!!

  14. I think very highly of your creativity, and way of being, real and down to earth, watched your interviews on CNN and discovered this blog.
    Congratulations on your genius.
    Loved your movies, ignoramus me, did not know it was you!
    You make a difference to films, and you have an ardent admirer!
    Faiza.

  15. I sat behind you during Prof Yunus’ presentation in Mumbai. His presence and what he shared with us was overwhelming,moving and humbling for me. I have been inspired to read and learn more about his conceptually simple yet powerful work and what it has achieved. I am left with many questions about the concept of charities and social businesses. My dream would be to create a social business, the mind is working hard on the what and how. What an honour to visit Dacca!
    The blind boys who sang after Prof. Yunus’ talk took my internal state of overwhelm to an extreme, heightened sensitivity.
    I sat in the front row for your talk. You are an extraordinary human being. Your interview, reponses, poetry,comments about Heath ( I am an Australian),started me on a journey of a remarkable,unforgettable, life altering morning for me. Thank you.
    Margot

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