Since the fall of PM Sheikh Hasina’s government and appointment of Dr Muhammad Yunus as the head of the Interim Government, citizens of Bangladesh may want to know more about the new leader. What is his background, his ideas and work that has made him a global celebrity? Partly due to the work of his NGO, today Bangladesh has burnished its reputation and image, not as a “basket case” as Kissinger was informed, but as a dynamic nation with an enormous untapped potential. A leader with the vision and values that Dr Yunus brings to the task, can help realize the pent-up dreams of millions of young citizens of this young but dynamic nation.
In terms of education and attainments, with a PhD degree in economics from Vanderbilt University in America, a professor and department head at Chittagong University, winner of the Nobel Prize in peace, and more awards than perhaps any living person in the world, in some sense he was already the most famous citizen of Bangladesh, before becoming its political leader. There is no other head of state on earth today, with a resume remotely comparable to that of Dr Muhammad Yunus in its depth and breadth.
It is interesting that even though over his lifetime he has toiled in remote villages working with poor women and their families, his reputation and recognition outside Bangladesh arguably has always been greater than at home. For much of his career, he was busy building what is today a Nobel Prize-winning institution, the Grameen Bank, a powerhouse in informal finance, with more than eight-million-member shareholders.
His fame or notoriety is partially explained by the fact that Yunus is a brilliant expositor who has frequently travelled across the world to speak, inspire young people, wealthy entrepreneurs, and politicians who love to listen to his visionary ideas. The three books he wrote certainly contributed to his global fame among the general public outside Bangladesh as a thinker, an academic, a teacher of economics, an intellectual, a best-selling author, a visionary, and a social critic. His message is always hopeful, but he does not mince words when his criticizes the status quo. He is particularly critical of the unbridled pursuit of profits which has turned the global economy into a playhouse for the rich and powerful, given the extreme income inequality and unsustainable growth given the mantra of free-markets and capitalism. In his recent book, he quotes Oxfam, a highly credible charity that today the five richest persons on earth have more wealth as the bottom fifty percent of the globe’s inhabitants.
We begin by discussing his first book, The Banker to the Poor, published in 1998, which introduced the author to a wider global audience. Since then he has written two additional books, each a best seller. However, the first book (Banker to the Poor) is important given it is an autobiographical work, and gave the readers a good introduction to his work and ideas. Many of the millions of global readers likely were introduced to Bangladesh, microfinance and the Grameen Bank, through this and the other books written by Professor Yunus. His stated life’s mission was to help “at least one,” if not millions of poor women in rural Bangladesh escape from a life of desperate poverty. A reasonable argument is that his first book burnished his reputation as an original thinker, a humanitarian, and an anti-poverty activist par excellence. The fame eventually led to his becoming the first Bangladeshi to receive the Nobel Prize in Peace (2006), a prize he shared with his organization, the Grameen Bank (GB), making it the first Bangladeshi institution to be honoured with a Nobel Prize.
To get a sense of the book, let me begin by sharing a few (selected) quotes from the inside jacket of the (1998) book. The introduction says, “Banker to the Poor is an autobiographical account of the founder of the Grameen Bank, Muhammad Yunus. This work is fundamental rethink on the economic relationship between the rich and the poor, their rights and obligations.”
“By giving poor people, the power to help themselves, Dr Yunus has offered them something far more valuable than a plate of food -- security in its most fundamental form.” Former US President, Jimmy Carter
“Mohammed Yunus is a banker with a plan to end world poverty with pound 17 and a lot of trust. And it works. Here he explains how?” The Guardian, London
“Visionary banker sets free powerless poor. Bangladesh’s famous financier uses micro-credit to bring wealth to the underprivileged of many nations.” Rosemary Righter, The Times, London.
In the foreword to the book, His Royal Highness, The Prince of Wales (now King Charles III) wrote, “I hope that this book will bring the benefits of micro-credit to an even wider audience. I know that it will fascinate and entertain. Perhaps it will also serve as a reminder to those who think they have grand and global solutions to the challenges of the world that it often through the grass roots, by listening to those who lives they seek to change, that true and sustainable solutions, in tune with the land and human spirit, will be found. I comment it to you.” [Prince Charles]
For those who have not previously known the author, a brief introduction from the book’s jacket will help.
“Muhammad Yunus was born in 1940 in Chittagong, the business center of Eastern Bangladesh. He was the third of 14 children. Educated in Chittagong, he was awarded a Fulbright scholarship and received his PhD from Vanderbilt University , in the USA. In 1972 he became heard of the economics department at Chittagong University. He is the founder and Managing Director of the Grameen Bank. In 1997, Professor Yunus organized the world’s first Micro-Credit Summit in Washington DC.”
In 2006, Dr Yunus become the first citizen of Bangladesh to receive the Nobel Prize in Peace along with the institution he founded and led for many years, the Grameen Bank. He was also an early recipient (1984) of the Ramon Magsaysay Award often described as the Asian Nobel Prize. Additionally, he was honored with several prominent awards – The World Food Prize (1994), International Simón Bolívar Prize (1996), Sydney Peace Prize (1998), The Prince of Asturias Award for Concord (1998) and Seoul Peace Prize (2006). Since the publication of his first book, he has written two other books: “Creating a World Without Poverty: Social Business and the Future of Capitalism,” published in 2007 and, A World of Three Zeroes: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emission (2017).
In chapter 6, we learn that the younger Yunus has always been an activist. As the young professor was teaching economics in an American university in Tennessee, back home, Bangladesh was engulfed in a murderous struggle for its liberation. As news of the brutal crackdown by the Pakistani military junta spread, like many others in the Bangladeshi diaspora, he sprang into action.
Working with other Bangladeshi-American colleagues in Nashville and across America, as part of an informal citizens organization, Yunus travelled to Washington DC to lobby with the US Congress to immediately stop arming the military-led government of Pakistan that was actively engaged in a genocide in East Pakistan. There he met and worked with Enayet Karim (a senior staff member at the Pakistan Embassy in Washington DC), Dr M Alamgir, Shamsul Bari, Hasan Chowdhury, among others who had arrived from across the United States looking to see how they could support the cause of Bengali resistance back home. This informal citizens group raised funds by pooling donations from their meagre earnings, visited foreign embassies to raise awareness of the genocide in Bangladesh, organized demonstrations on the steps of US Capital to convince Senators and Congressman not to support the Pakistan-army led genocide, begin to publish a newsletter to spread the word on the freedom struggle, started an informal radio station, and even sent a representative to Calcutta to make contact with Bangladeshi politicians to explore the possibility of forming a government-in-exile.
This last step was important because it will lead to a concrete and fill a vacuum to help nations who wish to provide humanitarian and political aid nations and organizations sympathetic to the cause of liberation of Bangladesh. Not all of their efforts bore fruit, but many did. They certainly contributed to raising awareness in the United States, and abroad on the atrocities committed by the Pakistan army, and eventually contributed to the its defeat. The hard-fought war of independence received a huge boast when the Mukti Joddhas or Freedom Fighters were joined by the Indian army. On December 16, 1971, the Pakistani army surrendered. This was a momentous event. A great victory over oppression earned with great sacrifices in life and property. The road ahead towards normalcy as a free nation was going to long and treacherous. Yunus writes, “Bangladesh was a devastated country. The economy was totally shattered. Millions of people needed to be rehabilitated. I felt I had to go back and participate in the national-building. I thought owned it to myself.”
In chapter one, we learn about the origins of his work which led to the Grameen Bank. In 1974, the nation was engulfed in a terrible famine. Professor Yunus, now head of the economics program at Chittagong University, felt miserable with a feeling of helplessness as he saw the death and suffering among the villagers near the campus. “One could not miss these starving people even if one wanted to. They were everywhere lying very quiet.”
He felt a void in his knowledge and work as a professor. He wrote that I was teaching fancy neoclassical economic theories and models to my students, what I had learned in the graduate school. Yet the real world reflected none of this, but a brutish economic reality for millions. He decided that modern economics has little to offer to the immediate and urgent problems of the poor struggling to survive in the midst of a merciless famine. “What good are these elegant theories when people died of starvation on pavements and on doorsteps…how could I go on telling my students make-belief stories in the name of economics.” To learn more about the poor, he started visiting the villagers and interacting with the poor villagers (in Jobra) along with some of his students.
He writes that one day as he was walking in the village with his colleague, they had the opportunity to speak with a woman who was making beautiful bamboo stools (to sit), and came to know that she had to borrow a small amount of money (Tk5 or 22 US cents) to purchase the raw materials (bamboo) with which she crafted the final product (a stool to sit on). Further, he learned that she had to repay the middleman at rates as high as 10 percent of her earnings from her meagre earnings as a small business.
As a result, she was left with a miniscule profit (50 paisa, or 2 US cents). If she had access to capital, and was able to borrow at more reasonable interest rates than what the middleman or the money lender offered, her profit or earning margins would be much higher. She would then be able to lift herself and her family more rapidly from poverty and subsistence living. He wondered, “Why had not my university, my economics department, all the economists in the world for that matter…not tried to understand the poor and to help those who needed help the most?”
He writes of his frustration with the neglect of the poor and poverty at the national and international level; The University Declaration of Human Rights requires all member nations to recognize these rights…it seemed to me that poverty created a social condition which negatives all human rights…”. Why do nations tolerate this? Why do we as citizens of a free nation tolerate violations of the basic human rights of millions of our fellow citizens?
Yunus’s mind was in turmoil as he searched for a solution to the vexing problem faced by the poor. He wanted to, but resisted, giving the poor basket weaver enough money from his pocket as a charitable gift, so that she could bypass the middleman – this will not make the problem go away for many others facing a similar dilemma, whom he wanted to help. He was fully aware that rural Bangladesh had millions of such mothers, poor entrepreneurs, who remained stuck in poverty since they lack “access to institutional credit” which the rest of us enjoy. These potential small business owners continue to spend their lives mired in poverty, despite their ambition and hard work. He decided to conduct a live experiment. He asked one of his students to survey the villagers and based on the findings compose a comprehensive list of borrowers who were indebted to the local money-lender. He asked the student to include the full amount of each loan. To his surprise, the total amount of money owed to the local moneylender came to only $20. He decided to given these away funds from his pocket. The student worker was tasked to hand over cash to each borrower on the list so that they can pay off their loan and become debt-free, perhaps for the first time in their life.
Sociologists have a name for complex social problems such as poverty. They call these “wicked” problems, since they are hard to solve given the complexity and interconnectedness of many contributing factors. Yunus realized that poverty of these women-led families was not something a one-time loan repayment would solve. What can be done, he thought, to provide these poor not just a ready access to credit or financing investments at reasonable interest rates, but also to create for them an income stream they could use to prevent future indebtedness?
He reached out to the manager of the public bank on the campus, who said he would lend money to a poor asset-less poor women entrepreneur (with no collateral), only if Professor Yunus would personally guarantee the loan. Yunus agreed to these terms, fully expecting to lose the funds he was guaranteeing for the sake of his experiment. At the end of the month, to his amazement and against all logic, every borrower had returned their installment of the bank loan. This was an aha moment for him. This led him to the concept of team-based micro-credit loan program for the poor, where some form of social or team discipline would be reduce default.
His student workers would train a group of five women, who knew one another, on how to productively invest in small trade or enterprise to generate an immediate and steady revenue stream. The program would be based 100 percent on trust. There would be no documents to sign. Only two of the five members would get the initial loan. As they start repaying the loan (weekly installments) from the earnings of their businesses, the other members of the team would qualify to receive loans. This “social pressure” within the team, would replace the “collateral” normally associated with such loans, to ensure a remarkable 98% rate of return. Once he was able to replicate these results over many villages and teams of borrowers, he went to Dhaka, the capital city, to speak to the politicians and central bankers. He lobbied for a license to start his own innovative bank, which would be like no bank in existence, since its only purpose would be to cater to the poor financing their small income-generating investments in rural Bangladesh.
From the famine of 1974, if we fast forward a few decades, we see a remarkable scenario in 2015, when “the Grameen (Bank) had 2,568 branches, with 21,751 staff serving 8.81 million borrowers in 81,392 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 97% are women and over 97% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.” At the time, the Grameen Bank member borrowers owned 76% of the Bank, while 24% was owned by the government.
This book tells the story of the humble beginnings of the world-renowned Grameen Bank (formally established in 1983) and its founder, Muhammad Yunus, who is today known as a world-famous thinker, innovator, and winner of the 2006 Nobel Prize in Peace. Professor Yunus has achieved much in his life, and has also endured state persecution in his own country.
In a historic reversal of political fortunes, after the student-led pro-democracy movement of July-August 2024, resulted in the resignation of the iron-fisted Hasina government, the student-leaders chose Professor Yunus to lead the Interim Government of non-partisan experts as the Chief Advisor.
For those interested in learning more about his life and remarkable career, the 1998 autobiography is highly recommended as an excellent starting point.
Munir Quddus serves as an endowed professor of economics and dean of the business school at Prairie View A&M University, near Houston, Texas. He can be reached at [email protected].
