Banker to the Poor (9 page)

After a few months, in early 1978, I was invited to preside over a session at a seminar called "Financing the Rural Poor" organized by the Central Bank. The seminar was under the aegis of the United States Agency for International Development (USAID) and attended by a group of experts from Ohio State University. These U.S. experts argued that the key to lending to farmers was setting interest rates at a high level. They believed that when threatened with higher interest farmers would repay more consistently.

This made no sense to me. I protested: "When farmers in Bangladesh are desperate, they will borrow regardless of what interest they are charged. They will even go to a moneylender who threatens to take over all their possessions." The men in the conference room looked at me uneasily. "I would pay farmers a negative interest rate," I explained. "I would lend them one hundred taka (about five dollars), and if a farmer returned ninety to me, then I would forgive him the repayment of the ten taka. You see, the real problem with lending to farmers is getting the principal back, not the interest."

I was being intentionally provocative. These policy experts wanted to make credit so difficult that only skilled farmers and artisans would dare to borrow money. I, on the other hand, wanted to make it easier for people so that they would be encouraged to pay back their loans.

One elderly banker had little patience for my lecture. "Professor Yunus," he began, "your Jobra experiment is nothing, only a flyspeck compared to the big national banks we manage. Our hair has not turned gray for nothing. We have a lot of experience. If you want to prove your point, show us success over a whole district, not just in a single village."

I was not surprised by his challenge. Most bankers did not take me seriously. They glossed over my desire to extend the program and remained entrenched in their belief that it was unworkable on a national level.

The deputy governor of the Central Bank, Mr. Asit Kumar Gangopadhaya, was in the audience listening to this whole discussion. After the meeting, he called me into his office and asked me if I was serious about wanting to extend my experiment. I told him I was. A month later he invited me to a meeting of all the managing directors of the state-owned banks to discuss my proposal.

The directors received me with indulgent and patronizing attitudes. When Gangopadhaya asked them for their support they said, "Of course, no problem at all," but it was clearly lip service to please him. In truth, they had deep reservations. They argued that borrowers were repaying their loans simply because I was a highly respected university professor and that micro-credit worked in Chittagong because I was a native of that city. I tried to explain that the poor did not go to my university, that none of their families could read and write, and that my academic reputation was meaningless to them, but the directors around the table were not listening. If I was serious about demonstrating that this project was replicable by any other bank, I would resign my professorship, become a banker, and set up a Grameen branch in another district.

In the end, I did just that. The University of Chittagong granted me a two-year leave of absence. On June 6, 1979, before I knew what had happened, I had officially joined the Grameen Bank Project in the District of Tangail.

Tangail was selected because it was close to Dhaka and it would be easy for them to judge if the program was having any real impact on the villagers. It was agreed that each national bank would make three branches available to us—one small bank offered only one branch—giving us a total of nineteen branches in Tangail, six branches in Chittagong, and the Agriculture Bank branch we had already created in Jobra. Suddenly, Grameen was twenty-five bank branches strong.

Tangail District was in the throes of a warlike situation. Armed gangs in an underground Marxist dissident movement called the Gonobahini ("The People's Army") terrorized the countryside. These guerrillas killed with little compunction. They simply pointed a gun and fired. In every village we came across dead bodies lying in the middle of the road, hanging from trees, or shot by a wall. The countryside was awash with arms and ammunition left over from the War of Liberation. To save their lives, most of the local community leaders had run away, hidden with neighbors, or moved into hotels in Tangail City. There was neither law nor order.

What could we, a fledgling bank project, achieve in the face of this bloodshed and killing? We worried about the physical safety of our newly recruited branch managers and bank workers who would be working and living by themselves in distant villages. To make matters worse, many of the young workers we were hiring were ex-students with radical sympathies, who could easily be swayed by the armed leftist guerrillas. (In fact, we later found out that some of our workers had been active Gonobahini members up until they began working for us.)

It was the hottest part of the year. Even the slightest effort left one completely exhausted. During the day the roads were deserted and people stood under trees praying for a
kalbaisakhi,
a sudden summer storm. The villages we passed through seemed so godforsaken and the people so poor and emaciated that I knew I had come to the right place. This is where we were needed most.

The staff at the banks through which we were supposed to operate resented us for adding to their workload. Countless times they refused to provide services or actively opposed us. Once the situation got so bad that one of our own officers aimed his gun at the manager of a local commercial bank and threatened to kill the man on the spot if he did not make more funds available to Grameen borrowers. We had to fire the officer. The assaulted manager asked to be sent back to Dhaka, and it soured relations with that bank.

We did not give up. Rather than depend on the unreliable staff at the national banks, we tried to do as much of our own work as possible. The ex-Gonobahini turned out to be excellent workers. These underground fighters were young (usually between eighteen and twenty years old), hard working, and dedicated. They had wanted to liberate the country with guns and revolution, and now they were walking around those same villages extending micro-loans to the destitute. They just needed a cause to fight for. We channeled their energies toward something more constructive than terrorism. Provided they gave up their guns, we were happy to hire them as bank workers.

At first I just had a skeleton staff that came up from Jobra with me: my young associates Assad, Dipal, and Sheikh Abdud Daiyan. Then later, when it was judged safe, I brought two of the female colleagues who had also worked in Jobra: Nurjahan and Jannat. I moved into a building that was still under construction. I lived in a tiny unfinished room on the third floor with laborers working all around me. During Ramadan I broke the daily fast with the traditional light meal of
iftar
in the evening: pressed rice, called
chira,
sweetened with ground coconut and sugar, chickpeas fried with red chilies, slices of mango, and flat disks of fried ground lentils seasoned with green chili and onion.

I had no toilet in my office. When I wanted to relieve myself during the day, I had to disturb my neighbors. What kept my spirits up in those first difficult days was the startling generosity of the locals. At night an old neighbor living under a badly thatched roof would often offer me some
pantabhat,
leftover rice soaked in water, fermented, and seasoned with hot fried chilies, raw onions, and leftover vegetables. Unfortunately, Grameen had made it a rule not to accept food or gifts from any borrower or villager. Reluctantly, I refused his offer.

Every tiny decision I made had to be reviewed by all the managing directors of all the participating banks at the regular monthly meeting of the Central Bank of Bangladesh in Dhaka. This was a slow and ponderous process. For example, we wasted two hours on Decision Number 37, arguing back and forth about whether to give flashlights to bank workers so they could walk between villages at night. One managing director felt that village life in Bangladesh ought not to be "ruined" by the importation of flashlights. He wanted our bank workers to use old-fashioned lanterns and kerosene lamps. Like the social anthropologists who continually accuse Grameen of fundamentally altering rural society in Bangladesh, this banker was not willing to allow the introduction of anything that sounded nontraditional. With wealth comes change. But why is this a drawback? I am all for change. And if that managing director lived in the poorest villages of Tangail and Chittagong, he would be all for it too.

In March 1980, I was remarried in a big ceremony in Dhaka. My marriage to Vera had come to an end several years before. Soon after the birth of our daughter Monica in March 1977, Vera determined to leave Bangladesh, saying that it was not a good place to raise a child. Though we still loved each other, we simply could not agree to settle in the same place. Vera refused to stay and I could not abandon Bangladesh. With great sadness, we agreed on a divorce in December. Unlike Vera, who came from a culture so foreign to my own, Afrozi Begum was a Bangladeshi researcher in advanced physics at the University of Manchester. She was as comfortable in the eastern and western worlds as I was. For a few months after our wedding, Afrozi remained in England to finish her research while I worked in Tangail. But soon she joined me in Tangail, where we lived on the third floor of our office buildings. Since then, we have always lived close to our office, and even today we live within the office complex. The only difference now is that we have our daughter Deena Afroz Yunus, who was born on January 24, 1986.

By November 1982, Grameen Bank membership had grown to 28,000, of which fewer than half were women. How did we achieve this jump from the 500 Jobra members we had in 1979? There was no one secret to the success of our Tangail expansion, but surely the hard work and dedication of our bank workers and managers was an essential part of it. From those early days, we learned the importance of picking fresh young people to run our branches. Surprisingly, people without previous work experience of any kind are often best suited for this. Previous work experience distracts new workers from the ideals and unique procedures of Grameen.

Many young managers embraced Grameen as a great opportunity. They loved the thrill of experiment and adventure. Responsible for setting up the local Grameen branch, the manager chooses the general location of the future office and draws a map of the area. He writes reports on the village's history, culture, economy, and poverty situation. To give Grameen maximum exposure, the manager then invites all the people in nearby villages, including village leaders, religious leaders, teachers, and government officials, to a "projection meeting" at which a high-ranking Grameen official explains the bank's procedures in detail, giving the villagers the option to either accept Grameen with all its rules and regulations or to reject it, in which case the bank promises to leave the area. So far, no one has ever asked us to leave, but we like to make it clear from the start that the choice to have us is theirs.

Working in a bank for the poor is highly specialized work. This is true from the planning and designing level on down to the person-to-person contact in the field. Visitors to Grameen often ask me, "What makes a Grameen worker or manager so different from other young people? Why are they so willing to work under such harsh conditions?" I believe the answer, in large part, is the training program for bank employees that emerged from the informal weekly review meetings I used to have with our staff in Tangail in the early 1980s. When most people talk about training in the context of an antipoverty program, they mean teaching poor people new skills. In Grameen, we offer our borrowers little if any formal training. Instead, we train our staff, turning them into an elite brigade of poverty fighters.

Anyone younger than twenty-eight with a master's degree and at least a B average in all final examinations is eligible to apply for a job as one of our bank managers. We advertise in the national newspapers and receive a large number of applications. Half of these applicants would make first-class bank managers for Grameen. But since our training facilities are limited, we screen the candidates through interviews to pick only a limited number. Those we select are asked to report to our training institute. Here they receive a two-day briefing, and then we send them off to various branches, where they remain in training for most of the following six months. Before they go, the institute staff tells them, "Observe everything carefully. When your training is over, your task will be to create a Grameen branch of your own that will be better in every respect than the one in which you spent your first six months."

So trainees discover Grameen for themselves by watching others run one of our branches. We immerse each new young worker in the Grameen culture and the culture of the poor, teaching him or her to appreciate the unexplored potential of the destitute. Our staff training is simple, but tough and rigorous. The bulk of it is self-taught. There are no reading materials to go through or computer programs to learn. We find that the villages of Bangladesh teach young people more about life than the pages of any book ever could. During this time we encourage them to criticize everything they see and come up with proposals for modifications or improvements to any procedures. When they reassemble at our training institute in the Dhaka headquarters, they present their improvement proposals to their colleagues. After their spell in the field, the trainees always bring in a breath of fresh air. They also bring keen observations and sharp criticisms. Often they report that our sacred rules are violated or that our clockwork precision is crumbling down. They come with major plans for overhauling our operations and terrible punishments for those who violate our rules. In the ensuing open debate, the sharpness of these criticisms often gets blunted, but still there are elements of truth in what they report. We encourage these spirited debates, for innovation can only sprout in an atmosphere of tolerance, diversity, and curiosity.