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.

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.

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.

See Also: Is It Time for the U.S. to Issue a Digital Dollar?

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