TRANSCRIPT: Muhammad Yunus

Fred de Sam Lazaro, TPT: Can we begin with that? What kind of overall report card would you give the idea that has blossomed so large?

Yunus: Well one thing is 25 years or so back the word micro credit didn’t exist and it was coined; now it’s a known word. Any dictionary, which will be missing of that word probably people will stumble on it. Why is it not there? So that’s one thing; the concept became familiar, idea became familiar. So I think that has done a quite quick job on that one. On the ground when we began very few people to start with, with micro credit and today around the world probably some 20 million families have access to micro credit — and the micro credit summit in 97 got the goal of reaching 100 million poorest families with micro credit by the year 2005. So we are on the way to 100 million but in the year 2000 we are 20 million. So that’s one. And also country-wise in terms of diversity of countries and communities having micro credit experience has widened quite a bit. But it’s still at a very low level as a still NGO activity. It has not grown into a commercial financial institution. Still the financial institutions who work across the world have not changed a bit because of micro credit. And our struggle has been to create new financial institutions, influence financial institutions, redesign financial institutions so nobody is missed out in terms of coverage of the financial institutions. Our allegation is that financial institutions as they exist today are biased against the poor people; they almost practice financial apartheid. They still do the same. That has not been changed. The people unserved have not come within the new institution. It’s a program. It’s a project. But not a new financial institution. So that piece is still missing. So I’ll say that there are good news; there are bad news.

FdSL: Why do you think that might be? How did you think up the idea of lending to poor women?

Yunus: One of the circumstances which force me into that, it’s not that I was dreaming about micro credit — I had no idea about micro credit. Simply the fact that it’s a newly born country that I came back to and wanted to be of assistance in any way to, in the rebuilding process of the country. And I saw how the country and economy was sliding very fast — and we had a famine in 1974 — people we dying of hunger. And I find myself in a very strange situation teaching elegant theories of economics, telling all my students that how every economic problem has beautiful solutions. And I walk out of the classroom those elegant theories have no use for people who are dying. So I wanted to get away from that theoretical environment and see in practice as a human being if I can be of use to any other human being around me. So this is what drove me from the campus to the next door neighbor, the village. Trying to locate those poor people and see if there’s anything that I can be of any use to them for, even for a day. I thought this would be lucky of me that I have used one day usefully. In the process I found how people suffered from tiny amounts of money and I wanted to do something about it. So I made a list about the people who needed that kind of money. And, and I was surprised to have that list prepared with 42 names on it - the total amount of money needing was $27 in total. And that was a big shock because in the classroom I’m talking about national development plans, 5-year plans, millions, and billions of dollars of investment to change the fate of the people. In the next door people are suffering not for millions of dollars or billions of dollars — for less than a dollar apiece. So it’s a new awakening for me that what, how far apart we are, what we teach or discuss in the classroom and what exist in the next door neighbor. So one way I thought I could tackle this is to give this $27 out of my pocket and tell them that this is a loan; they can pay me back whenever they want to. The excitement that it has generated in them that kind of touched me and I asked myself if you can bring so much happiness and so much excitement to so many people with such a small amount of money why shouldn’t you do it more? So that part led me to think of banks to come up and lend the money. Why shouldn’t the bank come and lend the money? So I went to the local bank; the manager was surprised. He fell from the sky; he didn’t believe that I even said that. He said poor people are, are not creditworthy; bank cannot lend them loan; and so on. And so a big struggle began between me and the bank. After a long series of negotiations I offered myself as a guarantor; said I will be guarantor, you give the money. So that was the beginning in 1976. I took this money and gave it to the people in the village. And the bank manager told me this is the last time I see this money. The amount was very small because the, when even I offered myself as guarantor after long 6 months negotiation they fixed a limit up to which I can go — and that limit was $300. So this was within the $300 limit that I had to give. So I gave it and lucky for me that I soon found out that people are paying back and they paid back every penny without any hitch. So I got very excited. But the bank manager challenged me to do it in 2 villages instead of one because in one village maybe something happen so two villages probably would be bit better judge. So I did it two villages — still the same. So he changed his mind and kept on increasing the number every time I do it. So he raised it to 5 villages and then I did it. And he raised it to 10 to 20 to 50 to 100. And every time he asked me to do it I, and yes and I’d go and do it because I’m totally convinced by that time that what he is saying is wrong. But finally I saw that it’s useless to persuade him because his mind is made; so I thought I should have my own bank. So I went to the government with a proposal that I should be allowed to set up a bank. It took me another 2 years to negotiate with the government to persuade the government to allow me to set up a bank for the poor people. In 1983 we became a bank. So I kept on expanding. And we, in the meantime we developed some methodology. We are lending to the poor and we wanted to lend to women to bring some gender balance into it because my allegation to the bankers was that not only they’re opposed to giving money to the poor people but they’re also opposed to giving money to women. And I said not even 1% of all the borrowers of all the banks in Bangladesh is women. So I said that something must be wrong with what you’re doing. And when I begin I want you to make sure half the borrowers in my program are women. But women themselves were running away from me. In fact they said, "No, no, no, we don’t use money. We don’t touch money. It’s our husbands who touch, do money business." So you go to her husbands and I kept on repeating what I though I should tell them that yes it is true that if you have an idea you need the money; here is the money; you can do that. So it took us 6 years of continuous, running after this women to persuade them to join Grameen Bank and finally in the 6^th year we came to that level — 50/50. Then we saw how better it works if you enter the family through women. So we changed our mind. We started giving priority to women. Now out of 2.4 million families of Grameen Bank the borrowers that we have, 95% of the borrowers are women. So this is where we came to those ideas and developed the methodology and many essentials that we thought that would work better for women, better for poor.

FdSL: It seems counterintuitive that people without formal education would be able to handle money and not spend it on immediate needs for example.

Yunus: Probably the decision that I wanted to get away from what I was teaching because it didn’t match with what I see — and I said why don’t I be just a human, a human being instead of trying to be an economist. So I didn’t have any obligation to those things. I just could be plain simple and interact and try to see what it really is instead of using my academic glasses to see them. The moment I took that off I started seeing things in the real manner — and I wanted to react to that; I wanted to make myself useful. And that became the driving force behind me that solve the problem. And every time it was a bite size problem. It was not a huge problem I was handling. It looked like all it needs a little effort and it can be done. So I was doing that; so when I was trying to negotiate with the bank manager I thought soon this guy will be convinced — it’s such obvious. And so I did it and and he was not convinced. So he said if you do it two villages that will make sense. I thought now it’s easy; now he will be convinced. But he was not convinced. So this one step to another step this is how it began and I don’t — I didn’t have a blueprint of any kind. I was not looking for a destination; all I’m trying to do is to be helpful for today —if it help, fine. I’m not thinking that oh, this is permanently solved; this is the big theory — I was not doing that. And I never claimed that. I said person need money, we can find a way to give the money and he or she can find a way to pay back. So we are negotiating on that kind of scale. And as it happened that when you repeat one you become many; so this is what happened. And then at that time I was trying to tackle a local problem right next door to the campus. I didn’t realize it’s the same problem all over Bangladesh. So when I did it then I thought that it’s the same thing all over so why don’t we do more? So we had to do more; so we’re doing all over Bangladesh. And then well it may work in Bangladesh but not in other countries. I said well if it works here it should work other places too for the same reason because financial institutions are doing the same kind of rejection everywhere else. So luckily another person came up from Malaysia; he’s a professor of economics. He said, "Well, I would like to do it in Malaysia." So he began; he went through our experience to understand, absorb that — and he started in Malaysia and it worked very well. So we had one example. Here’s Malaysia which is a small population; economically much better off right now compared to Bangladesh. Within that it works. So when religiously they’re more conservative than Bangladeshi people are so that gave us another handle. Then other experiences came in from Malaysia from Indonesia, from Philippines, and some other countries around the place. So saw that this has a broader application.

FdSL: You went with women to do more social good. Talk about that. How did you find that out? What are the benefits of lending primarily to women versus men?

Yunus: When we reached the level of half and half men and women among the borrowers we were kind of feeling relaxed that we did the job; it was a pretty tough job to make it happen. Then we started noticing that when women was the borrower, children were much better off ‘cause women always paid more attention to children - and we saw the manifestation in many different ways. Like in many families, poor families will give away their children to better off families to work for those families in exchange of food; and they will stay there perm, literally slave labor. And it starts from the age of 6, 7, and so on; so they will be given away and they will handle it. They will grow up in those families; they’ll be kicked around. But the moment the woman becomes the borrower and she starts earning money; first change you see the children are coming back one after another. And particularly the girl children are brought back fast and many children will be brought back. And if you compare that situation with a family where the men is the borrower you don’t see that happening. In women always you saw a, a very cautious user of the money. And I thought this came from a basic skill she has kind of accumulated over the years being a woman in a poor family; you have to stretch every little source you have to go further. So she became a better manager of her scarce resources. She used it, skill, management skill to the money she received. So she wanted to get better mileage out of the money she got but men were very impatient. They wanted to do quick and make money, whatever they could. And then use of the money which they have earned women are very cautious with the use of the money. And the money if she made extra it will go to the children, go to the improvement of the household, go to the building of a future. But the men were impatient; they wanted to enjoy right away. They will entertain friends; they will go to the movies; they will do whatever they could to enjoy, to for themselves personally. But women didn’t look at it personally. Women look at it for the children, for the family and so on — and for future. So you look at every item. Then you see the children are going to the school quicker in a family where mother is the borrower than the children in the family where the father is the borrower. And so you notice this so repeatedly you get convinced that there is something to do with mother being the borrower and the father being the borrower. So it changed our ideas that maybe we should focus more on, more on women.

FdSL: Did you anticipate why it did not happen that there was more social disruption? Did you worry you were upsetting an ancient traditional way of interaction within the family? Did you think that you may be threatening? Why don’t men feel more threatened than they seem to be?

Yunus: Oh, they do. They do feel very threatened and even today after all these 24 years of work, you hear a lot of negative things about Grameen Bank in Bangladesh. And this one reason is because we give money to women. And that became our biggest problem giving money to women because immediately we are faced with two things. One is the religious opposition to us. Everybody said among the religious people that we are doing, what against interest, against Islam, against the religion because according to their interpretation of religion that women should be home; they shouldn’t be handling money; they shouldn’t be connected with the market, and so on. So they thought it was a very destructive thing we were doing. So they were very emotional charged. So it was not easy. And then they were joined with male folks within the family where we are giving the money to the women. The husband was very upset; he thought we were eliminating him; we were insulting him by giving money in the hands of the woman rather than him. So he didn’t look at us very kindly. Sometimes he used religious interpretations to protect his male ego of saying that no I’m not about me, it’s not about me it’s my religion and so on. But we didn’t give up; we continued. Yes, if you do something new it’s always you’re kind of going against the stream so it creates problem — it did create a lot of problems for us.

FdSL: How much of that problem does prosperity solve?

Yunus: The way kind of a time curve that we see the first 3 years are the most difficult years; among them first year is the most difficult. Then gradually it goes down. But once people see that the women are earning money; then their art is not falling apart because she is earning money; she is now better concerned about the family and so on taking care of the children; she doesn’t nag anymore for this and do that because she has the money she can take care of a lot of little things in the household. So husband came around to see that the better improvements within the household. The neighbors, the religious people started kind of reorienting their thing — well so far it’s good but you never know because soon she will be going out in the bazaar and mixing with men, which will be dangerous thing to do and so on. So they kind of took a second position rather than the initial thing that it will fall apart right away. And some were really impressed by the fact that women are taking money and taking care of themselves and the religion didn’t get broken because of that; didn’t get shattered because of that; she is still a very religious person and so on. So this is how we see it and after three years it kind of cooled down. And in many occasions, you see the religious leaders who were opposing, who have been opposing in the first place coming back, some of them coming back saying that would you please take my wife into it because she has been complaining that others are getting the loan but she’s not getting the loan. So that we thought is a big success that she, the person came around all the way around to come to that kind of conclusion.

FdSL: Would you say that the social mores, the gender relation’s problem is a hindrance to the further growth of this concept? Has that been a hindrance?

Yunus: I don’t think so. I don’t think so. Whenever you’re doing anything new, even for the first time you bring computers people will have some excuses to say this is a bad thing to happen. And I remember when computers were coming one of the big issue is labor replacement. The machine now is replacing men so it’s a very bad thing; men will be out of jobs and so on. In many places there was strict opposition from the trade unions introducing computers. So opposition you name it, there is opposition. Flying has an opposition. IT has opposition, anything. So that way, actually what we were doing was so different, so way other way that it’s very natural to see those reactions. So you have to be patient. You have to be friendly. You have to explain to people that you have not bad intentions behind it. And people gradually get around to it. And so I don’t see this as a separate thing that you have brought in. Even religious leaders had extreme difficulties; all the religious leaders who said things differently than what is the conventional wisdom considered was the right thing to do. So compared to that this is nothing.

FdSL: Do you find male acceptance to have improved considerably? You said the father accepts this generally. Does he become a partner? Does he coexist with it independently? What’s the pattern of evolution?

Yunus: Y: As a successful Grameen borrower absorbs the family members, the children, the father, in many families the father is the real manager of the enterprises and many women introduce their husbands. They say he is the manager of the project. And he says this with authority. "I’m the boss." But he’s the general manager so he goes and deals with the marketplaces and so on. But I make the decisions. Others maybe she’s not as strong as some women be but the person, the male person is absorbed into the enterprises that they are building up because the size becomes bigger and bigger and men plays more and more important role because he is the outer face of the business. And the children get involved in it. And then if you are still successful, still expanding you start hiring people into it so that now you not only you have a man as your husband, man as your son. Also men and women of the other families too. So this, this is a basic graduation that we see happening in those families.

FdSL: Do you find that the men are using the women as fronts?

Yunus: Sure.

FdSL: In order to secure loans. And how do you feel about it? Just to use an analogy in the US it’s often alleged that minority allocations have been used. Do you see that as an abuse in the Grameen situation? Do you encourage that?

Yunus: We, we don’t encourage and we don’t discourage but this is the reality. Sometimes it’s a man who would encourage woman to go and borrow because it’s a scary situation, woman are so nervous she wouldn’t do it herself unless she is nudged into it; she needs that nudging. If a man was opposed then she is reluctant; she wills never. So we said that’s okay; you consider it. Who takes the initiative? But for sure we are not giving it to men. So when the first loan would be probably she say, "Well you take it for a cow and bring the cow, we’ll look after it." So it will be a cow which is being looked after by both the husband and wife together and so on. And gradually more and more money will come; husband will get into the marketplace thing, things and running the business and so on. And so it’s true that in some places, cases too but there are cases where women themselves would come. Because it’s impossible situation for her to live; many of those abandoned woman who don’t have a husband. These are the usual ones who takes the first decision, desperate ones; they, she has nothing to lose because she has been abandoned by her husband. She has been married 3 times, 4 times; each time abandoned by their husbands and left. Now with their friends’ family, their brother’s family, or daughter’s family; so she needed something so she is the one who came out to trying that. So with the man and woman thing whether man is in a commanding position or a woman is a kind of subsidiary position you can argue with that but it’s a family, which work out and we want to enter the family through woman. Other option for us is to go through the man. Forget about the woman. I think between the two I will definitely go for the one enter the family through the woman even if husband is the real user of the money — after all technically it’s very important, technically and legally. She is the owner of everything that she’s becoming owner of because she is the borrower and she can show to the court and it has happened many time in the divorce situation that bead belongs to me. The cow that I brought in no matter how many hours my husband has spent on it to look after and I didn’t pay any attention, but it’s my cow.

FdSL: She has the leverage in other words?

Yunus: She has the leverage. She has the legal right. The house she built with the money from the housing loan belongs to her; it’s a legal document. So if she is divorced the husband has to go out of the house. So irrespective of who did what this ownership comes to the woman because she borrowed the money; money came to her; she paid back the money; no matter where that money came from but she paid back the money legally. So that’s her loan and she paid it back; everything belongs to her. So legal rights-wise she is in much better condition. Savings she made with the money because savings is a continuous process it belongs to her; it’s in her name. And she has the right and obligation to designate a nominee in case of her death who should inherit this money. Usually she put her daughter’s name. That’s my daughter; she’ll inherit this money. She doesn’t say my husband should inherit. So it’s her right no matter who paid the money. So that’s also. And she is the owner of this bank because she is the shareholder; they own this bank. It’s not her husband. So if we give a dividend, which we have not done yet; if we give a dividend it’s her money that goes to. She elects the board of directors, members of the boards of director, board of directors. So again the legal rights-wise she has a much better position irrespective of what role has been played in using the money.

FdSL: How much are you concerned with the fundamentalist/conservative backlash?

Yunus: Very little.

FdSL: So you’re not that concerned?

Yunus: No, we have been dealing with ever since we are born. I mean this is a continuous thing — but that was not fundamentalism what I was describing as the religious background. That was very normal thing. Even my grandfather tell me, "What you are doing — cause you are a good guy, you’re a good person, I understand that but you are not doing it right. You shouldn’t give the money to women. This doesn’t work right." So he doesn’t have any bad feeling for me. He has tremendous love for me, but he feels that this is not right according to the way he has been trained in religious interpretations. So what I see is basically that. They see it’s a good thing but it doesn’t go right with the religious thing. So people gradually get used to it and start reorienting their religious interpretation. And we have a good case for that. In Islamic history there are a lot of women who contributed in a major way. Like the prophet himself married a businesswoman. So you immediately say are you saying that the prophet has done a wrong thing by marrying a businesswoman? He endorsed it; that’s why he married - his first wife was a businesswoman. So we, we get back to those kind of stories and how women fought in the battles and were leaders and generals and so on. So that gives a background and say maybe this is right. Why should it be bad? So we don’t worry about it in that sense. But people make use of this for other reasons — either it’s for political reasons they, just to show that see we are the protector of Islam so we are attacking this. You should find us the good guys because we are pro working against the Grameen Bank in something. It may happen. Or we may push them into such situations. Some people go so far against the religious sayings and things; immediately it hurts people. That creates those backlashes and so on. So this is what I would say, I would say that whatever fundamentalism there is in Bangladesh is a very minor one at this one but even in a, in a big stack of wood if you have a tiny, little fire in somewhere it can grow big. That I admit right away. At the moment it is small. If you are careful, if you look at it, keep your eye on it, and make sure it doesn’t grow, it’s fine. But if you are not paying attention to it, it can grow in a big fire. So this is true for any society wherever those kind of — either on religious ground or on ethnic ground, anything can grow big if you are not careful, you are not paying attention to it. But if you are paying attention to it, people are happy with has happening, people don’t care. And in Bangladesh, people, the Islam that, that is practiced is a very liberal kind of Islam unlike in many other countries, like in Pakistan for example — very conservative brand of religion. Here it is not so, here people accept things in a more pragmatic way and religion has been interpreted in that pragmatic way. So I wouldn’t worry very much on that score about fundamentalism.

FdSL: What’s your response to the small smoldering fire in the woodpile? What are your responses to make sure it doesn’t spread? Is there any concerted effort on your part?

Yunus: I was not doing anything special to address that. To give one example how it happens that way we always encourage our borrowers to vote during the election. This is a campaign we always launch; every general election time we make a big preparation that every, single voter in the Grameen families must go and cast their vote — 100% voting from Grameen families, this is our motto. So we elaborately prepare for that. In 96 general election we expanded that. We said we not only we all vote, which we do all the time we’ll also bring our neighbors, particularly our women neighbors. So we went ahead and women brought their women neighbors. And in 96 election more women voted in general election than men, which has never happened in the history of Bangladesh. Usually it’s a half way mark male voters and half of them are female voters. This time more female voters casting their vote than male voters casting their vote. It created a lot of difficulties at the casting stations because preparations for female booths were half the number than the male booths — these are separate booths traditionally. So they had a longer line waiting under the sun with the babies on their lap and so on. But they stood there and cast their vote. One of the outcome perhaps, and at least in (squeaking noise) the press they speculated that way and discussed that way that that the fundamentalist party in the country was literally wiped out during the election. So one is the more women will be casting their vote; they will never vote for fundamentalist parties because fundamentalism never goes well with the women. So Grameen activities making people conscious about their rights, casting votes, women integrating into the system I think itself is a big protection for such things, rights and. In 97, following year there was a local election. And surprising results came out — this time, not only they voted, which we campaigned usually, in the usual way but this time they became candidates. More than 4,000 Grameen members got elected in the local board elections. Two of them became chiefs of the local bodies. So this is very unusual thing; a woman who was reluctant to go and cast their vote. Not only this time casting their vote they became candidates and many of them won their elections. So if 4,000 got elected there are many, many more who contested. So this is something and this I see as a big protection. In the families where these women are contesting, I can bet you the children in the family, men and women, with the boys and the girls will never like the fundamentalist ideas because they have a very completely different attitude. And that’s another picture of all the Grameen families; we gain out of the sixteen decisions the Grameen Bank has. One is that we shall send their children to school. And I would say it’s about 100% enrollment from Grameen families today and many of them are in colleges, universities, coming all the way. So that is very different. So having those children going to school the second generation that is coming from out of these, 2.4 million families of Grameen at least they are not becoming the kind that you would expect to grow up in an illiterate family where illiteracy ran for generations.