Nobel Laureate Yunus Talks Poverty at Global Forum
Muhammad Yunus, microcredit pioneer and 2006 Noble Peace Prize winner, has a great idea for a horror movie. The movie would be about a world without banks. A world with no ATMs, no ready access to money, no one willing to lend you money.
If you are poor, this world already exists, he says. “Two-thirds of the world’s population lives that way every day.”
Yunus told that story as one of the keynote speakers at the Georgetown Global Forum on April 17 in New York. The forum, “Profit, Policy & Philanthropy: The Keys to Global Development,” brought together leaders from government, corporations, nongovernmental and philanthropic organizations to share experiences and best practices in addressing the world’s most pressing challenges, including poverty, access to education and health.
Yunus founded Grameen Bank-- meaning “village bank” -- in his native Bangladesh in 1983. The bank is based on the principle that loaning what would be considered tiny amounts of money to entrepreneurs -- the first loan was $27 to a total of 42 craftspersons -- could not only lift people out of poverty but also serve as a sound investment practice.
With 8 million borrowers, an almost 100 percent loan repayment rate and profits for all but three of its 25 years, the Grameen model has been so successful that it has expanded its reach into the United States. The first Grameen America loans were made last year in the Jackson Heights area of Queens, N.Y.
The Grameen Bank functions similarly to a traditional bank in many respects -- its revenue is from the interest paid by borrowers, for example, but the lending model is built on a system of trust, recognition of potential and personal responsibility rather than collateral, Yunus said.
The irony of Grameen America’s viability, investment in the poor and 99.6 percent repayment rate considered against the collapse of great American banks has not gone unnoticed by Yunus.
“We have to make financial systems more inclusive,” Yunus said at the Georgetown Global Forum. “The existing systems are exclusive clubs for privileged people.”
Though the current global economy is in crisis, this could be the prime time to retool and reconceptualize the financial system.
“This is a big crisis, but it is also a great opportunity,” Yunus said. “When the financial crisis has passed, we cannot return to the same normalcy we came from.”
Almost all of Grameen Bank’s loans wind up going to women. The loans foster their businesses, but their ultimate impact is on changing the larger socioeconomic landscape. In one generation, a family can move from being “the poorest of the poor,” led by a mother without literacy to one with a child going to college, Yunus said. In fact, Grameen now has a student loan program.
Grameen is helping to create what Yunus called “social businesses.” These are business that can realize a profit while being based on the principle of doing good for others. Grameen and Dannon Foods, the yogurt producer, are making yogurt easily affordable and accessible to malnourished children. Something as small as regular amounts of yogurt can reverse the impact of the lack of micronutrients in a child’s diet. By cutting back on marketing campaigns and product packaging and investing its dollars in keeping prices low and the product easily available, Dannon continues to profit, Yunus said.
These small steps can reduce poverty.
“Why are people poor? Poverty is not created by the poor. It is created by the institutions we create or didn’t create,” said Yunus.
Poverty is not in a person; it is something society imposes on them, according to the Nobel laureate who has spent decades enabling some of those who are most in need gain means toward productivity. “We need to say ‘goodbye’ to poverty,” Yunus told the Global Forum audience.
In fact, he imagines a “poverty museum.” Not to honor or celebrate poverty, he said, “but a place where, if our children or grandchildren ask us what poverty is, we would have to take them to see it.”
The Georgetown Global Forum occurred during the university’s John Carroll Weekend in New York and featured panelists and speakers including Greg Mortenson, co-founder of Central Asia Institute, founder of Pennies For Peace and author of the bestseller “Three Cups of Tea;” the Rev. John Foley, S.J., founder and executive chairman, Cristo Rey Network; Cardinal Theodore E. McCarrick, archbishop emeritus of Washington; José María Aznar, former president of Spain and distinguished scholar in the practice of global leadership at Georgetown; Wendy Kopp, chief executive officer and founder of Teach For America; and Ann Veneman, executive director of UNICEF.
Former President Bill Clinton, a 1968 alumnus of the Walsh School of Foreign Service closed out the Global Forum on Friday evening.
Source: Blue & Gray
April 18, 2009
