Muhammad Yunus, founder and managing director of the Grameen Bank and recipient of the 2006 Nobel Peace Prize, discusses the role of microcredit in fighting poverty. Isobel Coleman, senior fellow for U.S. foreign policy at the Council on Foreign Relations, presides.
Founded in 1921, the Council on Foreign Relations is an independent, national membership organization and a nonpartisan center for scholars dedicated to producing and disseminating ideas so that individual and corporate members, as well as policymakers, journalists, students, and interested citizens in the United States and other countries, can better understand the world and the foreign policy choices facing the United States and other governments.
Isobel Coleman is senior fellow for U.S. foreign policy at the Council on Foreign Relations (CFR) and director of CFR’s Civil Society, Markets and Democracy Initiative. She is also director of CFR's Women and Foreign Policy program. Her areas of expertise include democratization and economic development in the Middle East, educational reform and regional gender issues.
She is the author and co-author of numerous publications, including Paradise Beneath Her Feet: How Women are Transforming the Middle East (Random House, 2010), Restoring the Balance: A Middle East Strategy for the Next President (Brookings Institution Press, 2008) and Strategic Foreign Assistance: Civil Society in International Security (Hoover Press, 2006). Her writings have also appeared in publications such as Foreign Affairs, Foreign Policy, The Washington Post, Financial Times, International Herald Tribune, USA Today, Christian Science Monitor, and online venues such as the Huffington Post.
Dr. Muhammad Yunus
Muhammad Yunus is founder and managing director of the Grameen Bank, established in Bangladesh in 1983. Dr. Yunus founded the bank with the objective of helping poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound principles of finances so they can help themselves.
The Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through micro-lending and its model has been replicated in over 100 countries worldwide.
In 2006, Dr. Yunus was awarded the Nobel Peace Prize for his work with the Bank.
Good afternoon. Thank you so much for coming. We have a full house here at the Council on ForeignRelations today, and for obvious reason. I'm Isobel Coleman. I am a senior fellow here for U.S. foreignpolicy and I also direct the Women in Foreign Policy Program.And I just want to remind you all that this meeting in on the record. Please take this opportunity to turnoff all electronic devices; BlackBerrys, Redberries, cell phones, whatever you may have. And also thismeeting is being webcast.It is with tremendous pleasure that I have the opportunity to introduce our speaker today, ProfessorMuhammad Yunus, who is one of my personal heroes. And I must say he arrived a little bit harried. Hisluggage had gone astray. He was wearing, I think, jeans and a green cardigan, but looked every bit asdistinguished as he does now that he has changed and cleaned himself up.Muhammad Yunus, as all of you in this room know, took a small idea, making loans to the very poor inBangladesh, and has turned it into, along with the help of many other people, but really turned it intoone of the great big ideas of our time. And for that, he and the Grameen Bank were recognized for theirefforts this year with the Nobel Peace Prize. And he has been on the short list for, I know, over adecade, and all I can say is, about time. This truly is a personGrameen today has made over $5 billion in loans and served 6 million people, 97 percent of them verypoor women. And this man and this concept needs no further introduction. Thank you.Thank you so much.Well, I got back my luggage. I could. make myself presentable quickly. I'm so honored thatyou organized this meeting and that this gave me a chance to meet many of my friends here; otherwise,probably I would not get a chance to meet them in a kind of rushed visit to New York.I'm very happy that the Nobel Peace Prize Committee decided to give the prize to me and GrameenBank this year because it. suddenly world changed for me personally and for microcredit. I'm justcoming from Halifax, where we had our Microcredit Summit, which is held usually after five years. Sothis is our third summit that we are having.Our first summit was in 1997 in Washington, D.C. Many of you may remember it. And we set a goal toreach 100 million poorest families with microcredit, preferably to the women of those families, by2005. And 2005 was declared as International Year of Microcredit because that was our terminal year.Last year U.N. observed the year as International Year of Microcredit. And we have reached 100million. When we declared it in Washington D.C., everybody said you are crazy, it will never happen,because you don't have the money, you don't have an institution, you don't have the manpower. Youhave nothing. We said we have determination, that's only thing we've got. And we'll make it happen.And we're lucky. At that time we were not sure whether we'll make it. We said even if we do 50million that's good enough. If you have reached 50 million people, poorest families, poorest women,with microcredit, that's an achievement by itself, so 100 million was not somethingthat we have to really on the dot have it delivered.So we did it, 100 million have been reached, so that's a cause of celebration in the summit, that wecame all the way and did it. And also other celebration, of course, was the Nobel Prize, becauseeverybody who came, there were 2,300 delegates in Halifax coming from all over the world, from allcountries, and it appeared like they, every one of them, are the Nobel laureates.This is a fantastic energy that created in them, so now we can achieve anything we want. First of all,have done something, and then right on the date, we got the Nobel Prize.So we said they set the new goals now.What does it mean to have microcredit for the poor people? And one example I gave was, supposesuddenly today, 16 th of November, all the banks in the world become dysfunctional. All the bankingin the world doesn't work anymore. Your check doesn't work. Your credit card doesn't work. Youbank account doesn't work. Nothing works. It will be such a horror story, worth a Hollywood movie.You can really build a Hollywood movie on how we. blackout on this, suddenly something happened.But this happens for almost two-thirds of the world population every day. For them it doesn't exist.Nobody cares. Nobody feels the horror in it. So microcredit is a kind of window, a little opening forthem to see that it's possible for them. And it works as good as any otherbanking anywhere in the world, even better.Today Grameen Bank has nearly 7 million borrowers. Ninety-seven percent of them are women. Andit's owned by them. And the money that we lend out comes from its own deposits. It doesn't takemoney from outside. It doesn't borrow money from anybody. No donor moneyis involved in it. And we have plenty of money to lend money to people.Last year we opened branches because we. one decision we took recently, that nobody in Bangladesh,the poor families. no poor family in Bangladesh should be left out of the reach of microcredit. Todaywe cover 80 percent of the poor families of Bangladesh. So our goal is to make it 100 percent so thatthere is no family left out. So we are opening branches wherever we left out corners, pockets. So lastyear we had opened branch on an average of one branch per day for every day of the year. So that'squite a management challenge. This year we thought we'll kind of level off. This year we have done onan average of two branches per day, every day of the year.And it works. And our direction to each branch is, you go there, mobilize the money from the localitythat you'll be serving, and take that money and give it to the poor people of the locality.And help build up the local economy.So money doesn't come from Dacca to some remote village, Dacca to some little village. It's all localmoney. And then they generate surplus. They have more excess money to spare, which they send out tous. We give them. we say that if you have excess, you send it to head office, we'llgive you interest, so don't worry about your cost part of it.So this is what appears. It is owned by the borrowers, and the children are going to school. Hundredpercent children of Grameen families are in school. And they not only went to school, now going intohigher education. We are giving higher education loans. Right now there are more than 12,000 studentswho are in medical schools, engineering schools and all kinds of professional schools, universities. Andwaves of new students are coming because it's for the first time this generation is going to school.Their parents never went to school, they're all totally illiterate, cannot write, cannot read. Never inhistory of their families ever anybody ever went to school. So a new generation is coming with 7million families where they are going to school, and some of them are now at the top of theireducational level, already several of them got Ph.D.s.It's amazing kind of change that happens in the family. So all these things can happen with just doingbusiness. Grameen Bank makes profit. So if all can be done just by doing business, the question that Ialways raise: Why aren't we doing more of this business?And that's the question to you, too: How do we do it?