Inspirational Banking: Grameen Foundation

Today is Blog Action Day 2008, where thousands of bloggers are banding together to write about the issue of poverty. Well, count me in.

Last year, I read a book that threw me for such a loop that one year later, I still think about it. Muhammad Yunus, Nobel Peace Prize winner and founder of the Grameen Foundation, wrote a book about his work called Banker to the Poor: Micro-Lending and the Battle Against World Poverty. You cannot read it and emerge thinking the same way about the poor. It’s just impossible.

In 1983, economist Yunus established Grameen, against the advice of bankers, government officials, and pretty much everyone. His vision was that if credit were given to the poor, then they would be able to establish businesses that would allow them to escape poverty, maintain a living wage, and best of all, pay back the loan. Grameen Bank now provides over 2.5 million dollars of micro-loans to over two million families in Bangladesh. Ninety-four percent of the clients are women, and repayment rates are near 100 percent.

The book is amazing, pure and simple. It is written in such common sense terms that it becomes hard to argue against the logic of instituting such programs everywhere, and Yunus provides advice on doing exactly that. And with success rates like Grameen’s, perhaps bankers everywhere should be looking to them for guidance.

Is this the cure for global poverty? Probably not. But boy, it sure seems like a running leap toward the cure.

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