Muhammad Yunus got started in “Microlending” when – with money from his own wallet – he gave poor villagers loans of about 64 cents each. Though it sounded insignificant it enabled them to own the resources needed for their little family businesses. It didn’t make them rich but at the end of the day, it left them with enough profit to feed their family. These loans might purchase things which seem small to us… a cow, some chickens, materials for a fruit stand, or a cell phone. But however small they were what was needed to make another step to self sufficiency.
He founded Grameen Bank to facilitate this “microlending” on a bigger scale. Grameen means “rural”. They have a 99% repayment rate though the average loan today is only $200.
Sufia Begum was a 21-year-old villager and a mother of three when the economics professor met her in 1974 and asked her how much she earned. She replied that she borrowed about five taka (nine cents) from a middleman for the bamboo for each stool.
All but two cents of that went back to the lender.
“I thought to myself, my God, for five takas she has become a slave,” Yunus said in the interview.
“I couldn’t understand how she could be so poor when she was making such beautiful things,” he said.
The following day, he and his students did a survey in the woman’s village, Jobra, and discovered that 43 of the villagers owed a total of 856 taka (about $27).
“I couldn’t take it anymore. I put the $27 out there and told them they could liberate themselves,” he said, and pay him back whenever they could. The idea was to buy their own materials and cut out the middleman.
They all paid him back, day by day, over a year, and his spur-of-the-moment generosity grew into a full-fledged business concept that came to fruition with the founding of Grameen Bank in 1983.
In the years since, the bank says it has lent $5.72 billion to more than 6 million Bangladeshis.
Story posted at My Way News
Related link: With $25 you can become a microlender through Kiva.org
I’m supporting several entrepreneurs through Kiva.org. Here are two (but these pictures will change once their loans are funded):
Perhaps you’ll help too! It only takes $25 to help a hard working person expand their business and feed their family! (Once the loan is repaid, you can take your funds back or reinvest them.)
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