MUHAMMAD YUNUS REVOLUTIONISED BANKING
I first came across the work of Professor Muhammad Yunus in 2009 when a friend gave me a copy of his book, Creating a World Without Poverty. I read it at a time of transition, having just moved to the Middle East to start a job helping set up an office of an international company in a young country. It was with the backdrop of this fledgling economy, where the promises of capitalism and development were alive and strong, that I heard Professor Yunus’ clarion call: “What if you could harness the power of the free market to solve the problems of poverty, hunger and inequality?” His answer was clear, yes we can, and his book was filled with examples of how a more humane version of capitalism could manifest. Looking around at the most extreme inequality I’d ever encountered, it struck me that this question did not feature in any public discourse, and that it should.
“Human beings are driven by the fact that they can make the impossible possible.”
Muhammad Yunus is no stranger to asking challenging questions. Perhaps the greatest example was his question about lending practices in banks. Why, he asked, did banks have to guarantee loans by taking security against people’s property or real assets? He pointed out that because of this, people experiencing poverty, people with no property or real assets, could never access finance—the very thing that might allow them to move themselves out of their circumstances. He started to investigate what constituted security for poor communities and realised that it was their relationships and community connections that ensured their survival. This led him to establish the Grameen Bank in 1976 in his home country of Bangladesh, putting into place a new form of lending called micro-loans, predominantly to poor women that could be guaranteed by their communities. He was able to prove that a guarantee built on relationships was often more secure than any traditional form, when, during the Global Financial Crisis, the Grameen Bank had repayment rates higher than many other banks around the world.
His work as a social entrepreneur, banker, economist and writer has had a profound effect across the world, earning him multiple awards including the Nobel Peace Prize in 2006. But his work hasn’t been without its challenges. In 2011, the Bangladeshi government took legal action against him and he was removed from his position at Grameen. I’ve read about the underlying political motivations of these actions and it’s impossible to know what happened, only that it is a complex situation and that after decades of work to empower the poor I imagine he would be deeply saddened by the
