Banker to the Poor: Micro-Lending
and the Battle against World Poverty
by Muhammad Yunus
Bankers, Go Back To School
It began with a simple $27 loan. After witnessing the cycle of poverty that
kept many poor women enslaved to high-interest loan sharks in
Bangladesh, Dr. Muhammad Yunus lent money to 42 women so they
could purchase bamboo to make and sell stools. In a short time, the
women were able to repay the loans while continuing to support
themselves and their families. With that initial eye-opening success, the
seeds of the Grameen Bank, and the concept of microcredit, were
planted. After earning a Ph.D. in economics at Vanderbilt University, Dr.
Yunus returned to Bangladesh to settle into a life as a professor. But a
famine in 1974 ravaged the country, leading Dr. Yunus to alter his thinking
and his life profoundly: What good were all my complex theories when
people were dying of starvation on the sidewalks and porches across from
my lecture hall?.... Nothing in the economic theories I taught reflected the

life around me. Armed with little more than a lofty dream to end the
suffering around him, he started an experimental microcredit enterprise in
1977; by 1983 the Grameen Bank was officially formed. The idea behind
the Grameen Bank is ingeniously simple: extend credit to poor people and
they will help themselves. This concept strikes at the root of poverty by
specifically targeting the poorest of the poor, providing small loans
(usually less than $300) to those unable to obtain credit from traditional
banks. At Grameen, loans are administered to groups of five people, with
only two receiving their money up front. As soon as these two make a few
regular payments, loans are gradually extended to the rest of the group. In
this way, the program builds a sense of community as well as individual
self-reliance. Most of the Grameen Banks loans are to women, and since
its inception, there has been an astonishing loan repayment rate of over
98 percent. Banker to the Poor is an inspiring memoir of the birth of
microcredit, written in a conversational tone that makes it both moving and
enjoyable to read. The Grameen Bank is now a $2.5 billion banking
enterprise in Bangladesh, while the microcredit model has spread to over
50 countries worldwide, from the U.S. to Papua New Guinea, Norway to
Nepal. Ever optimistic, Yunus travels the globe spreading the belief that
poverty can be eliminated: ...the poor, once economically empowered, are
the most determined fighters in the battle to solve the population problem;
end illiteracy; and live healthier, better lives. When policy makers finally
realize that the poor are their partners, rather than bystanders or enemies,
we will progress much faster that we do today. Dr. Yunuss efforts prove
that hope is a global currency. --Shawn Carkonen
Personal Review: Banker to the Poor: Micro-Lending and the
Battle against World Poverty by Muhammad Yunus
The last twelve months have been very significant in terms of what can be
termed as the financial meltdown and crisis of confidence in the global
economy. However the defaults and bankruptcies of businesses and banks
have been those run by the wealthy and the highly qualified professionals.
On the other hand we have not seen any such crisis in institutions serving
the poorest of the poor, where recovery rates for loans have exceeded 98
%. Bankers, go back to school, please. Better still, read this book written
by Prof Yunus.
Even after four decades of putting a man on the moon and bringing him
safely back to earth, every day, 35,000 children world wide are dying due
to hunger related causes. Humanity has successfully fought and
eradicated apartheid, slavery and small pox from the face of this planet.
However, poverty remains the greatest challenge confronting
governments, societies and all of mankind.
This book is a great step to understand one of the key strategies to send
poverty to the museums in our lifetime. Prof Yunus's experiment and later
large scale success in microcredit and the concept of social business are
at the heart of this book.

As a boy of eleven living in India in 1971, I clearly remember the events
leading to the freedom struggle and the subsequent liberation of
Bangladesh. Prof Yunus's journey from his return from a lucrative teaching
job in USA, back to his homeland soon after its independence speaks
volumes about his compassion for his fellow citizens, trapped in poverty.
Every chapter in the book narrates Prof Yunus's journey step by step from
the basic concept of microcredit starting with his own funds of $27 at the
village Jobra, to where the great institution Grameen is today.
Prof Yunus challenges the fundamental premise of banking and turns it on
his head. Conventional banking looks for "collateral" for security of its
loans, and hence only the rich have access to loans. The poorest of the
poor are completely excluded from conventional banking.
Banking needs to have a human face. Gender inequality is one of the key
factors that lead to social disparities and the vicious cycle of poverty. Prof
Yunus's strategy to target the poorest women even in a very conservative
society like Bangladesh proves that we need a totally different approach to
address poverty.
The myth that poor will not repay the loans has been fully exposed. (On
the other hand we feel shy to talk of mighty corporations filing for chapter
11 and heave a sigh of relief on hearing of massive bailout plans).
The conventional thinking that the poor lack skills, and hence need to be
trained, is now a joke. Most of Grameen's beneficiaries are illiterate, but as
human beings, they do not lack creativity, ingenuity and above all integrity
to put the smallest amounts of credit to good use.
Poverty is not a curse of the poor countries alone. The challenge exists in
developed countries, and the solutions we need are remarkably similar.
Bureaucracies are one of the greatest impediments to progress, as
demonstrated clearly in this book. However Prof Yunus's courage and
persistence to fight it out is a great source of inspiration. I would
recommend this book as a compulsory reading in all institutions that train
bureaucrats in developing countries.
Prof Yunus openly confronts multilateral institutions, particularly the World
Bank. These ivory tower institutions employ highly paid executives who
have seen poverty only in text books, and work from posh offices in
developed countries, funding and dictating programs aimed at poverty
alleviation. I personally do not suspect their good intentions, but fully agree
wit Prof Yunus's contention that there is a better way of doing it.
Every word of this book is filled with a great sense of commitment, an inner
passion for fighting poverty, and above all the will to succeed against all

odds in this holy war, in the true sense of our responsibility to mankind and
to God.
My FIVE STAR rating to this book on Amazon.com, since the system does
not allow anything more.
I sincerely stand in salute to the great contribution to humanity from this
Nobel Laureate of Peace.
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