Something From Nothing

To make something from nothing is what visionaries do. In the 1970's few entrepreneurs were looking for opportunities in Bangladesh. What opportunities could be created with millions of poverty stricken people? Yet one man saw something in what appeared to be nothing to most people. His name is Muhammad Yunus, and he founded the Grameen Bank. Dr. Yunus, an economist, and his bank have been awarded the 2006 Nobel Peace Prize. How and why did a banker win this year's Nobel Peace Prize? He won the award because he made something from nothing.

Dr. Yunus began Grameen Bank by loaning $ 27 to a poor bamboo stool maker and 41 other desperately poor villagers in Bangladesh in 1975. A whole new industry of micro credit, loaning small amounts of money to poverty stricken people, was born. As of August, 2006, Grameen has loaned over 6 billion dollars to over 6.6 million borrowers, 96 percent of them women. Interest rates on Grameen's loans are about 16 percent, and 98  percent of them are repaid. (Typical independent money lenders in poor countries charge 50 percent.) Grameen now employs over 17,000 people.

As Grameen has grown, hundreds of other micro credit institutions have been created to serve the world's poorest people. This year 3110 institutions have made loans to 82 million of the poorest people in the world.

This bottom up economic growth in Bangladesh has had an impact on other factors. CCN Matthews News Distribution reports "...the 20 largest micro finance institutions in Bangladesh reach 21 million clients affecting 105 million family members in a country of 140 million. According to UNICEF, the number of deaths of children under five per 1,000 live births has fallen from 239 per thousand in 1970 to just 77 per thousand in 2004 and the fertility rate in Bangladesh has fallen from 6.4 in 1970 to 3.2 in 2004."

Grameen has proved that money can be made when lending to the poor, thus giving the world's banks incentives to focus on the weakest links in society. This approach ensures inclusive growth so that virtually everyone may have access to finance.

The Grameen model is based on peer pressure. Money is loaned to individuals in groups. If one person defaults, the whole group is cut off from further credit. If someone is behind in their payments, the group members apply social pressure or help the person pay in order to keep the group's credit standing high.

Grameen Bank is an example of a business that truly serves its customers through loans and other programs that help people to gain prosperity, end poverty and suffering, and increase the quality of life for the community at large. Less poverty and suffering decreases the tendencies toward violence, terrorism, wars, and disease often found rampant in poorer countries.

Dr. Yunus teaches us the power of a vision. He envisioned that he could help millions of people who had no collateral to develop and grow their visions. As a result tens of millions have started businesses, gone to school, and purchased housing that never would have been available to them without Grameen and the micro credit movement. While much of the world dismisses poor people as a problem to be solved someday, Dr. Yunus envisions real people with dreams and abilities. "I believe in the capacity and capability of human beings," he states. "Handouts take away initiative and help maintain poverty. If you give a woman a loan worth about $75 to buy a cow, she can start selling the milk. She might make about $2.50 a week. Her installment payment on the loan would be about 50 cents. So the other $2 could be used to buy food and other necessities. As amazing as it sounds to people in the world's rich nations, $2 a week can mean a lot in Bangladesh."

Poverty is a problem that social programs have been unable to solve. In 1975 Bangladesh had recently fought a civil war and experienced a famine. It's future looked bleak. Poverty was rampant. Dr. Yunus came up with a solution to poverty for millions of people that cost no tax money, required no government programs, and that inspired people to take personal responsibility. He created a banking system based on mutual trust, accountability, participation and creativity.

Every individual has an imagination. Every employee has an imagination. There are ideas, solutions, and possibilities, some small, and some great. We are quick to dismiss people who seem unimportant and  ideas that seem impossible or not sensible. Instead of thinking of all the reasons why something cannot happen, how about asking the question: "How can it happen?" How about asking: "What are the possibilities here?"In summary,  Dr. Yunus shows us the following:

•  Everyone is important and has something to offer.

•  Your ability to see someone as capable and successful can uplift them.

•   Something can be made from nothing.

Thirty years ago poverty stricken people had no access to credit except through usurious money lenders. Today millions are thriving because of micro credit. Where others saw hopelessness and despair, Dr. Yunus envisioned growth.

• People are motivated by meaning. Dr. Yunus has treated each "poor" person as "someone". His actions have created meaning in the lives of millions of people.

•  Tendencies toward conflict and violence are reduced when people find meaning in what they do and who they are. Graneen and micro credit are a positive influence for peace.

•  Believing in your self and in your vision combined with courageously taking action can lead to great success. Dr. Yunus did what no one had done before. He broke through the prevailing assumptions of the financial world (that poor people are not good credit risks)  and consequently created a positive impact on the lives of millions of people.

• This is great leadership--doing well while doing good.