Epiphanies: Muhammad Yunus
I WAS TEACHING economics at the university in Chittagong, Bangladesh, in 1974, and the theories that I was teaching didn’t seem to be of much use to the extremely poor. One day, I met a woman who was making a bamboo stool in front of her dilapidated hut. She made only two pennies a day. ...
I WAS TEACHING economics at the university in Chittagong, Bangladesh, in 1974, and the theories that I was teaching didn't seem to be of much use to the extremely poor. One day, I met a woman who was making a bamboo stool in front of her dilapidated hut. She made only two pennies a day. That's all that was left to her because of the moneylenders. And I looked at her and thought, my God, she's not a borrower, she's just slave labor.
I WAS TEACHING economics at the university in Chittagong, Bangladesh, in 1974, and the theories that I was teaching didn’t seem to be of much use to the extremely poor. One day, I met a woman who was making a bamboo stool in front of her dilapidated hut. She made only two pennies a day. That’s all that was left to her because of the moneylenders. And I looked at her and thought, my God, she’s not a borrower, she’s just slave labor.
THE NEXT DAY I WONDERED, why don’t I find other people who are going through a similar situation? I came up with a list of 42 people, who borrowed a total of $27. And suddenly it came to my mind: The problem is enormous, but the solution is so simple. I can just go ahead and give this $27 to these 42 people, and they’ll be free from the moneylenders. The rest is history.
AFTER SIX YEARS [of lending to women], we started noticing something: Money that had gone to the woman of the household [rather than the man] brought much more benefit to a family. One strategy the extremely poor had for survival was to send their children to work, one by one, perhaps as maids, in exchange for food. Seven-, 8-, 9-year-old kids would be slave labor. But when mothers received loans, the first thing they did was bring the children back.
THE WOMAN IN A POOR FAMILY is actually a very efficient manager of scarce resources.
BIG ORGANIZATIONS like the World Bank don’t see [microfinancing] as a development intervention. They think that infrastructure is development, not giving tiny loans. Otherwise, how can you justify that the World Bank does not devote even 1 percent of its portfolio to microfinance? After all these years, the World Bank has still not changed.
More from Foreign Policy

Saudi-Iranian Détente Is a Wake-Up Call for America
The peace plan is a big deal—and it’s no accident that China brokered it.

The U.S.-Israel Relationship No Longer Makes Sense
If Israel and its supporters want the country to continue receiving U.S. largesse, they will need to come up with a new narrative.

Putin Is Trapped in the Sunk-Cost Fallacy of War
Moscow is grasping for meaning in a meaningless invasion.

How China’s Saudi-Iran Deal Can Serve U.S. Interests
And why there’s less to Beijing’s diplomatic breakthrough than meets the eye.