Muhammad Yunus, Founder of Grameen Bank, on the US Financial Crisis

Posted by: Bruce Nussbaum on September 28, 2008

I interviewed the founder of Grameen Bank Muhammad Yunus recently and asked him about the current financial crisis gripping the US and the world. He laughed and said that Grameen Bank’s portfolio of micro-loans to poor people in Bangledesh and elsewhere was more solid than the portfolios of the big American banks full of falling subprime financial products and option ARMs.

“Our loans are real, they are transparent and they are being paid back by the people,” said the Nobel Prize Winner. “You can’t say that about the states.”

There is an important point here. Every since Yunus started the micro-finance movement, criticism has existed on the financial soundness of the system. Do poor people pay back on time and do banks make a profit? Well, compared to commercial banking practices, the efforts of Grameen and other micro-finance banks look very good today.

Maybe Grameen Bank should buy the weakened Wachovia Bank. Hmmm…. Maybe not.

Reader Comments

John Manoogian III

September 28, 2008 9:59 PM

it's gRameen bank. :-)

GenghisSam

September 30, 2008 6:10 PM

It is in the ethics and fidelity of poor Muslims of Bangladesh.

Same cannot be said of west.

Praful

October 1, 2008 4:23 AM

The one who's alive and kicking defines the (new) rules and benchmarks of the game! Till last month it was the Wall Street, now - The Grameen Gali (Street in subconitent language)!

Talleyrand

October 1, 2008 12:48 PM

Its not only that mysterious "ethics" of poor Muslims. I would also suggest:
The loans are small and they are given to people who use them to feed their families through small businesses. They are also given ( I think this is correct) to women, whose pro-family and pro-community motivation is higher. Men tend to be spendthrifts, I hate to say, and a "male" world is hardly sustainable. I know some men will get very annoyed at this, but the proof is there.

2)The villages and the communites know of these loans and there is some pressure for the recipients to perform. They are also investing in real assets (people, material) not in high-risk, derivatives and various other opaque financial instruments that aim to make everyone rich, except for those at the bottom of the financial pecking order.
Plus: Many subprime loans were also used as a way to refinance debt and make more debt... Not the microloans.

I think that adds to the picture a plittle. Don't mean to offend men here (I am one, I have enormous respect for the way women handle business, by and large ... but I think Palin is an exception:::)

Syamant

October 14, 2008 8:41 PM

I read his book , Creating a World without Poverty and it has a very powerful message. He has also talked about the concept of Social Business.

There is so much talk about the end of capitalism and executive pay etc etc. Perhaps there are learnings to be had from the model of Social Business.

Global Businesses in their existing markets or when they enter emerging markets might want to consider this model.

We currently have a question on Unstructure that you might want to participate in. Here is the link

http://www.unstructure.org/how-should-global-businesses-respond-to-the-unique-opportunities-that-open-up-with-the-emerging-markets-taking-center-stage/

zohra

November 27, 2008 2:07 PM

People who criticise Muhammad Yunus are those who have no vision in life and can only follow the crowd. They dont want to believe that something so simple can actually work, they run after companies who introduce terms like "Derivatives" "CDS" "Hedge Fund" etc. etc; cause most people believe the more alien the word the more likely it is to be good. Its cause of people like these the world economy is fre-falling into an economic abyss.

In life sometimes the most simple acts yield the greatest results, we all tend to give money to the poor off and on but he did it the right way, and he cared enough to see that its used the right way.

Those who criticise him should go get themselves a GRAMEEN Brochure and learn something for a change !!!

Mzwakhe Kheswa

July 13, 2009 8:19 PM

Greetings

I'm a South African music lecturer in Soweto, I obtained my Honours Degree in Jazz Performance at the University of Cape Town. I would like to request advices,help and any assistance you may see fit for this endevour. At the momment me and my other friends with whom we share the same the passoin for our South African indegenous, contemporary and popular music. We need to register a Trust Company that will en-able us to properly seek funding and a lot of assistance interm of proper research and documentation of this art form. We need Prof. Muhammad Yunus or his organisation to help us, at the momment to find a financial company that we can include in our forms for registering this company.

Any advice on proper steps to follow as
we have spent a year pursuing this venture.

We have lost some of our members as they believed that we will never succeed in this, we need to archieve this as many of our musicians pass on with a lot of information that is not documented or documented properly. We feel that as we have musical qualifications and practical experiances including languages we will never suffer when documenting we will properly document everything the present us with.

Your assistance will be highly appreciated.

Mzwakhe Kheswa

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