Sufiya Begum earned two cents a day. It was this knowledge that shocked me. In my university courses I theorized about sums in the millions of dollars, but here before my eyes the problems of life and death were posed in terms of pennies. Something was wrong. Why did my university courses not reflect the reality of Sufiya’s life? I was angry, angry at myself, angry at my economics department and the thousands of intelligent professors who had tried to address this problem and solve it. It seemed to me the existing economic system made it absolutely certain that Sufiya’s income would be kept perpetually at such a low level that she would never save a penny and would never invest in expanding her economic base. Her children were condemned to live a life of penury and as her parents did before her. I had never heard of anyone suffering for the lack of twenty-two cents. It seemed impossible to me, preposterous. Should I reach into my pocket and hand Sufiya the pittance she needed for capital? That would be so simple, so easy. I resisted the urge to give Sufiya the money she needed. She was not asking for charity. And giving one person twenty-two cents was not addressing the problem on any permanent basis.
I did not know anything about how to run a bank for the poor…I decided to do exactly the opposite of traditional banks.
2 comments:
this is interesting...I would be interested to read more about it...or possibly read it...so long as it is not bulletproof.
There a several links on my original post that have some good information regarding the book, Muhammad Yunus, and the Grameen Foundation.
Bear with me here, the excerpt below from the book was a real eye-opener for me as it questions convential economic theory regarding the poor.
" When I talked about micro-credit in the 1980s, whether to World Bank economists or journalists, most people assumed that I was trying to alleviate poverty by lending to small businesses that would then expand and hire the poor. It took people a while to see that I actually advocated lending to the poor directly. Policy makers tend to equate job creation with poverty reduction and economists tend to recognize only one kind of employment—salaried employment. And economists tend to focus their research and theories on the origins of wealth in the former colonial powers, not on the microlevel reality of poor people in the Third World countries. Whatever attention is given to poverty comes under the rubric of so-called development economics, a field that emerged only after the Second World War and that has basically remained an afterthought or reinterpretation of the main body of economic theory.
Worst of all, economists have failed to understand the social power of credit. In economic theory, credit is seen merely as a means with which to lubricate the wheels of trade, commerce, and industry. In reality, credit creates economic power, which quickly translates into social power. When credit institutions and banks make rules that favor a distinct section of the population, that section increases both its economic and its social status. In both rich and poor countries alike, credit institutions have favored the rich and in so doing have pronounced a death sentence on the poor.
Why have economists remained silent while banks rejected the poor as unworthy of credit? Nobody can provide a convincing answer. Because of this silence and indifference, banks have imposed a financial apartheid and gotten away with it. If economists would only recognize the powerful socioeconomic implications of credit, they might recognize the need to promote credit as a human right.
The shortcomings of the core economic theories remain unchallenged. Microeconomic theory, for example, which plays a central role in the analytical framework of economics, is incomplete. It views individual human beings as either consumers or laborers and essentially ignores their potential as self-employed individuals. This theoretical dichotomy between entrepreneurs and laborers disregards the creativity and ingenuity of each human being and considers widespread self-employment in the Third World countries as a symptom of underdevelopment.
In many Third World countries, the overwhelming majority of people make a living through self-employment. Not knowing where to fit these individuals into their analytical framework, economists lump them in a catchall category called the “informal sector.” But the informal sector really represents the people’s own effort to create their own jobs. I prefer to call it the “people’s economy,” a term often used by a German friend of mine, Karl Osner, who has played a critical role in educating Europeans about micro-credit. Any economist with a real understanding of society would have come forward to increase the efficiency of this people’s economy rather than undermine it. In the absence of economists’, organizations like Grameen must step into the breach. "
How's that for not bullet-proof?
If I stay in traditional banking for a time, it's going to be my training on how not to do banking. In the meantime I pray daily for God to advance his Kingdom through my job. It's a challenge but I've had occasional success.
Just this week a customer with a substantial amount in her savings account told me the other day that her religion prevents her from accepting interest, she wanted to put the money in a non-interest bearing account. I asked her what her religion said about giving away the interest to someone who needs it. And she said she would keep the account and send the earnings to someone who needs it in Africa.
Unfortunately this is not the norm in banking.
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