“Existing banks serve to rich, not to poor people”


Prof. Muhammad Yunus is an extraordinary person who created a totally different perspective for social inequality. He is an intellectual, benevolent, banker, social entrepreneur, economist, and civil society leader as well as being an inventor of vital economic terms for poor people. His great initiative, the Grameen Bank helped poor people and gave a chance to them to be investors. In 2006, the bank and its founder, Muhammad Yunus, were jointly awarded with the Nobel Peace Prize because of his efforts for the social development.

Mehmet Fatih Oztarsu, The MagazineN reporter, made an interview with him for our valuable readers.

  1. Mr. Yunus, you have been inspired by the Bangladesh famine of 1974 and you followed a creative way for your rural economic program. Can you tell us about that process?

I was shocked by the famine of 1974. I was teaching as an economics professor at Chittagong University in Bangladesh in the year 1974. I felt what teach in the classroom is all fairy tales, it has no relevance to the reality of the people who were dying of hunger. I felt that I am a useless person having no usefulness to other people. I wanted to make myself useful in some ways to the people in the village next door. That’s when I started visiting the village almost every day to see if can make myself useful to at least one person each day. In the process, I got to know the people in the village. I keep seeing the horrible system of loan sharking which takes away everything poor borrowers got by exploitative conditionality. In order to protect the poor, I started lending money myself. People loved it. I was happy because I could see my work was being appreciated by the poor people. This was the beginning of my lending money to the poor people. Since much more wanted to borrow money from me I transformed it into a bank in 1983. We called it Grameen Bank, or village bank.

Grameen Bank offers collateral-free loans to poor people, particularly poor women. The bank now has 9 million borrowers, 97 per cent of them are women. It is financially self-reliant; it does not depend on any external funding.


  1. The Grameen Bank is a prime example of the social business with poor people being its shareholders. What are the main mission and functions of the Grameen Bank?

Yes, Grameen Bank is a prime example of social business. It fulfills the conditions of the definition of a special type of social business by being a problem-solving business and owned by poor people.  The core mission of the bank is to provide financial services at the doorstep of poor women in an affordable way to turn themselves into entrepreneurs, and take charge of their own destiny.

  1. The terms of “microcredit” and “Grameen credit” sound magical. Can you give us details about them?

Essential features of microcredit are: it does not require any kind of collateral, it is for assisting the borrowers to turn themselves into entrepreneurs by investing the loan money, it does not include consumption loans, it requires weekly savings in savings account as an integral part of it, focused on poor women, all poor are eligible, loan is to be paid back in small weekly installments, nobody is excluded from the program, not even the beggars. It works in urban areas, rural areas, in rich countries and poor countries, it works wherever the poor live. It is sustainable.

  1. Grameen supports microfinance institutions in different countries. What is the regional perspective of the foundation?

Independent organizations were created to help set up Grameen microcredit programs all over the world. As a result, many Grameen supported programs were created around the world, including in the US and Europe. Grameen America, a Grameen organization dedicated to providing micro credit to the low-income people of the US, now has 85 thousand borrowers, all women, mostly undocumented women, through 18 branches located in 11 cities of the US. It has a repayment record of over 99 percent since its beginning in 2008. It has provided over half a billion dollars in cumulative loans, averaging about $ 2,500. Grameen replications undertaken by Grameen organizations are in operation in Africa, Latin America, India, China, Indonesia and many other countries.

  1. What are your proposals for alleviating poverty in Asia?

The most powerful and effective action to take to overcome poverty is to provide all kinds of financial services to all the poor through social businesses. It requires legislative action to create a law to enable the creation of Banks for the Poor. Existing banks are banks for the rich. Neither they have the intention to serve the poor, nor are the equipped to serve the poor. We have to remember that poverty is not created by the poor people; it is created by the system. We have to change the system by changing concepts, institutions and policies. A financial institution should be at the top of the list. Institutions are needed not just for lending; it is needed for all financial services, such as, insurance, equity, investment funds, guarantee funds, venture capital, Angel capital, whatever the market already has for the rich. The only important element that is needed to do is to create them as social businesses to get the maximum results.

  1. Mr. Yunus and Grameen Bank jointly received the Nobel Peace prize in 2006. How do you explain the togetherness of personal and institutional behavior?


It is ten years now since Grameen Bank I received the Nobel Peace Prize. It attracted the attention to microcredit and social business from all over the world. It inspired replication of both in many countries. It is growing in depth and width. Multinational companies are coming forward to set up social businesses. Universities are setting up Yunus Social Business Centres. There are thirty universities around the world which now have these Centers which offer courses, workshops, consulting services to businesses. Many entrepreneurs around the world are personally inspired to design and operate social businesses. Microcredit expanded to deliver financial services to around 165 million poor people, the overwhelmingly portion of them are women.  Global events are organized each year around social business, such as Social Business Day in Bangladesh, Social Business Summit, Social Business Academia Conference, Social Business Regional Forums, etc. But still, we have a long way to go. Our goal is to achieve three zeroes in the coming years, zero poverty, zero unemployment, zero net carbon emission. I need to build up initiatives everywhere to make this happen. We know how to do it, but we need all segments of people to get involved in doing it.

  1. As an addition to Grameen Bank, you established the Yunus Centre as a think tank. What does the Yunus Centre do?

Yunus Centre was created as a one-stop resource center for social business related activities in Bangladesh and around the world.

We work to expand our international network of individuals and institutions, especially ones that work for reaching three zeroes as fast as we can.

A major focus here is the dissemination of ideas through social media as well as through contribution of articles and other media to renowned publications globally.

As a resource center for existing and potential social businesses, we assist each venture in making sure to stay on course and come a stage to expand in various countries.

Besides that, we organize international events on social business around the world, assist in the development of academic programs focusing on social business within academic institutions.

Muhammad Yunus at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland

Muhammad Yunus at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland

  1. Mr. Yunus, our readers wonder about your evaluations about global poverty. Can the humanity terminate this problem?

Yes, definitely. I firmly believe poverty can be eradicated if we collectively work for it. As I said, poverty is not created by poor people. It is being created and sustained by this flawed economic and social system that we have adopted for ourselves; the institutions and concepts that make up this system and the policies that we pursue. We have built our theoretical framework on concepts that are too constricting and which underestimate human capacity such as the concepts of business, credit-worthiness, employment etc. Three mega powers will make us achieve the world without poverty: the power of youth, the power of technology, the power of social business. We have to put all these three into action. These three powers can make impossible possible in an unexpectedly short time span. We have to put these powers into action.

Thank you very much for your valuable answers, Mr. Yunus!

Photos credit to the Yunus Centre.

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