Muhammad Yunus, Banker to the World's Poorest Citizens, Makes His Case - Knowledge@Wharton
Sometimes finance need not be about millions of dollars. A perfect example is in microlending. Often by giving only a few hundred dollars of financing, microlenders can make a huge difference. Wharton and the Nightly Business Report provide fascinating interview with Muhammad Yunus, managing director of Grameen Bank in Bangladesh and a pioneer in the practice of microcredit lending.
It is well worth your time!
A few highlights:
* "I saw how people suffered for a tiny amount of money....So I made a list of people who needed just a little bit of money. And when the list was complete, there were 42 names. The total amount of money they needed was $27. I was shocked. Here we were talking about economic development, about investing billions of dollars in various programs, and I could see it wasn't billions of dollars people needed right away. They needed a tiny amount of money."
* "This is business money. Business money is limitless. And then, you can reach out to many more people than you would otherwise do....This is not charity. This is business: business with a social objective, which is to help people get out of poverty. Other banks were not giving loans to these people. "
* "If we start with that $27, and you add on all the money that we have loaned, it's nearly $5 billion that we have given over time. Now we have come to a stage where every two years we are giving $1 billion. So half a billion dollars a year. That's the stage we are in."
* "NBR: We have recently seen elections in Iraq for the first time. Self determination is the hope there. In a sense, is that what your program does? It changes people?
Yunus: Definitely. Actually, if you look at it one way, the microcredit we give to the women is a tool to explore one's self, how much capacity that is stored up inside: 'I never knew that I had the capacity. That creativity. That ingenuity. To make money to express myself. So that money gives, for the first time, an occasion for me to find out how much I can do.' When you were successful in the first round, when you took tiny amounts -- $30, $35 -- and went into business and paid back the loan, you are now much more equipped to do better. Bigger. So you ask for a $50 loan, a $60 loan, because you think you can do bigger business and more challenging business than when you first took out an easy loan.
NBR: It gives you that self confidence."
To those of you who think financiers are just bad people, read the full article, it will change your mind. Finance is important and done correctly really does make the world a better place :)