Sunday, April 25, 2010

Eliminating Poverty

One day when Muhammad Yunas visited Jobra, a small India village, he watched Sufia Begum, a 21-year-old villager craft a beautiful bamboo stool. She was poor, uneducated and had calloused fingers. He could not have guessed that seeing her would set in motion a cascade of events that would eventually change his life and the life of literally millions of people like Sufia who were entrenched in poverty.


Yunas asked Begum how much she earned. She told him that she borrowed 9 cents from the middle man and that after he collected his profit, she earned 2 cents a stool.


“My God,” Yunas thought, “for 9 cents she has become a slave.” Despite the beauty of her work, the fine craftsmanship, and the time she put into it, she had nothing to show for her work but calloused fingers and low esteem.


The next day Yunas and his students surveyed 43 villagers and discovered that they owed a grand sum of $27. Yunas said he could not take it anymore. He lifted the money before the villagers and told them they could liberate themselves. They could buy their own materials, cut out the middle man and pay him back whenever they could afford to. They all did and that moment launched a business concept that would lead Yunas, years later, to a Nobel prize.


Yunas founded the Grameen Bank and has since lent nearly $6 billion to 6 million Bangladeshis. Known as microcredit financing, small investors worldwide lend small sums of money to help a poor villager buy a goat whose milk they can sell to help sustain themselves and their families or to purchase a flock of hens whose eggs bring in money.


The ultimate goal is to eliminate poverty.


The Nobel Prize Committee said, "Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. " Microcredit helps.


This is how it works. The bank gives out small loans averaging around $200. Recipients are grouped together with four others and first two loans are handed out. Once a loan is repaid another in the group receives their loan. This encourages responsibility and 99% of the loans are repaid. This concept has spread and spurned development well beyond Bangladesh. In fact, the results have been staggering.


One man made the decisive difference when, in a moment of compassion, he shared his meager resources and helped changed the life course not only of himself, but also a group of struggling strangers. I wonder what moment of compassion lies ahead for us and whether we will have the wherewithal to follow through. I'm glad Muhammad Yunas did and so are millions of others whose lives and dignity have been restored through his efforts.

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