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Banker To The Poor
Micro-Lending and the Battle Against World Poverty
Muhammad Yunus
read on July 1, 2010

For quite some time I've heard positive things about the work of Muhammad Yunus and his Grameen bank. His program was the birth of micro credit- something I never heard about while in school but once I left I started seeing all kinds of stories about the difference it was making in poor communities. I definitely understand the power of credit and leverage, but I wasn't convinced that giving unsophisticated poor people small loans was going to make a long term positive change. I wanted to understand the economics behind the Grameen bank.

In that regard, this book fails miserably. It seems written for the very people meant to receive the loans, not for anyone seeking a rigorous understanding of low income economics. Yunis is an econ professor, so I'm very disappointed by his approach here. The book is almost entirely anecdotal. It never discusses actual theory, it just shows example after cherry-picked example of how his system is great and can work all over the world. It was a huge bore actually, and left me with far more questions than I went in with.

Yunus' bank seems to be more of a ponzi scheme than anything else. He clearly demonstrates how extremely poor people benefit from initial loans. He highlights many cases where people just need ten dollars or so to 'own their own capital and means of production', which creates far higher profits for them than before. That would make sense, if he stopped there. But Yunus thinks that as soon as they pay off a loan they should immediately apply for another, larger one. This doesn't make sense to me. His ideal world is everyone owing him more and more money as they become more and more productive- but they're never free of his debt. 

I'm not saying Yunus is wrong, or that micro credit isn't helpful. This book just didn't make the case for any of it.

Author Bio:

Muhammad Yunus (Bengali: মুহাম্মদ ইউনূস; born 28 June 1940) is a Bangladeshi social entrepreneur, banker, economist, and civil society leader who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and microfinance. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. In 2006, Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize "for their efforts through microcredit to create economic and social development from below". The Norwegian Nobel Committee said that "lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty" and that "across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development". Yunus has received several other national and international honours. He received the United States Presidential Medal of Freedom in 2009 and the Congressional Gold Medal in 2010. In 2008, he was rated number 2 in Foreign Policy magazine's list of the 'Top 100 Global Thinkers'. In February 2011, Yunus together with Saskia Bruysten, Sophie Eisenmann and Hans Reitz co-founded Yunus Social Business – Global Initiatives (YSB). YSB creates and empowers social businesses to address and solve social problems around the world. As the international implementation arm for Yunus' vision of a new, humane capitalism, YSB manages incubator funds for social businesses in developing countries and provides advisory services to companies, governments, foundations and NGOs. In 2012, he became Chancellor of Glasgow Caledonian University in Scotland. He is a member of the advisory board at Shahjalal University of Science and Technology. Previously, he was a professor of economics at Chittagong University in Bangladesh. He published several books related to his finance work. He is a founding board member of Grameen America and Grameen Foundation, which support microcredit. Yunus also serves on the board of directors of the United Nations Foundation, a public charity created in 1998 by American philanthropist Ted Turner's $1 billion gift to support UN causes. In March 2011, the Bangladesh government fired Yunus from his position at Grameen Bank, citing legal violations and an age limit on his position. Bangladesh's High Court affirmed the removal on 8 March. Yunus and Grameen Bank are appealing the decision, claiming Yunus' removal was politically motivated. In March 2017, the employees of Bangladesh's Grameen Telecom (GTC), established by Muhammad Yunus, sued him over alleged unpaid dues.