The Business of Caring

DUBAI, UAE, November 3, 2014 /PRNewswire/ --

In an exclusive interview, Vision talks to founder of Grameen Bank and Nobel Prize-winner Muhammad Yunus about the philosophy behind his caring approach to commerce. vision.ae

     (Photo: http://photos.prnewswire.com/prnh/20141103/713605 )

What does it feel like to win a Nobel prize? For Professor Mohammed Yunus, it was the legitimacy that the prize brought to his work with the poor, rather than any accolade, that meant the most to him. "Winning the prize was an exciting experience. It gives you an opportunity to communicate what you have to say. Before winning the prize, no one was paying attention. They used to say: 'Who is this guy? He's crazy!' After winning the prize, people start listening to you. The doors that weren't opening before are now open."

It was in 2006 that the Norwegian Nobel Committee jointly awarded Yunus and Grameen Bank the award "for their efforts to create economic and social development from below". The prize recognised an effort that was started three decades earlier.

1976 was a time of hardship for the newly independent Bangladesh, struggling to recover in the aftermath of the Liberation War. Poverty was widespread, particularly in the areas around Chittagong, where Yunus was born in 1940 and where he returned to serve as the Head of Economics at the local university after receiving his PhD from Vanderbilt University in the US in 1971.

Yunus was able to observe first-hand the impact of the famine that had hit
the country at the time, and of the unscrupulous lenders who were preying on the vulnerable. Against this backdrop, Yunus decided to offer the rural poor an alternative, and started lending small amounts of his own money to the people who needed it the most. "Grameen Bank was not a thought-out plan," he explains. "It was a spur-of-the-moment thing, a reaction to a moment of frustration and extreme devastation," he explains.

Success was immediate. "Everybody wanted to take money from me," he recalls. Yunus observed a similar phenomenon in nearby villages, and with the sponsorship of the Bangladeshi central bank and support of the nationalised commercial bank, went on to set up microcredit projects in other parts of the country. Some of the more disreputable lenders, who were offering loans at unaffordable rates of interest were, understandably, not happy to see their business taken away - "they started to spread all sorts of vicious rumours" - but a new movement was born.

Within seven years, Yunus's initiative, delivering a credit-delivery system to provide banking services targeted at the rural poor, officially became Grameen Bank. With this new type of bank, which offered "appropriate and reasonable" loan terms and conditions, there was no need for collateral: it was based on trust, accountability and participation.

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