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					       Group I

Banker to The Poor
          By: Muhammad Yunus
                    Agenda
• Overview
    – Author
    – Book
•   Ethical Issues
•   Critique
•   Personal Perspective
•   Recommendation
                 Author
• An economist from Bangladesh
• Chairman of the economics department at
  Chittagong University
• Inventor of Micro-credits
• Founder of Grameen Bank
• Noble Peace Prize Winner
• Aspires to create social business
              Book Overview
• An autobiography about his life and how he
  formed the Grameen Bank
  – What influenced him?
  – His concept of micro lending
  – Importance of working women
  – Growth and challenges for the bank
  – And what it has achieved till date
                 Continued…
• Most essential decade was 1970s
• Bangladesh won its independence
  – But left the country in Famine
• Millions of people needed to be rehabilitated
• Yunus was stricken by the amount of poverty
  – He desperately wanted to change it.
  – He initiated projects to aid the farmers
 Differentiating Poorest from the Poor

• Farmers were not the poorest
• Poorest of the poor had
  – No land
  – Food
  – Clothes
  – Source of income
• Mostly women with kids
• If not helped, they would die
             A New Form of Bank
• Sufiya Begum
  – The inspiration for Grameen Bank
• Loan sharks
  – Ate up the profit in terms of huge interest
• Birth of Grameen Bank
  –   Grant small loans at decent interest rate
  –   Without any collateral
  –   Mostly for women
  –   Based on trust and good faith
            Grameen Bank Success
• In 1976
   – Only a small single hut
   – Students work as volunteers
   – Number of borrowers = 42 women
• According to the book, it has now
   – 1,181 branches
   – 11,777 employees
   – Total Loans given $174.78 billion
   – 98% repaid
   – 95% borrowers are women
• Over 250 institutions around the world operate micro-credit
  programs based on Grameen
                Ethical Issues
• Inequality
  – Women treated unfairly
• Regular Banks not allowing poor people to
  borrow
  – No collateral
  – Illiterate
• Moral rights vs. religious rights (women)
  – i.e. women are not allowed to work outside
          Ethical Issues Contd.
• Multilateral Aid Institutions
  – Aiding countries with the biggest price tag
  – Move up the promotion ladder
• Corrupted officials
  – Government, suppliers, consultants
• Corporate Social Responsibility
  – All businesses want money
  – No one wants the betterment of society
                   Critique
• Book Quality
  – mostly focuses on micro-credit and the Grameen
    Bank
  – well-written
  – a subtle arrogance exists
  – quality is derived from the content
                Critique Contd.
• His points:
  – Well argued and effective
  – Uses individual examples
  – Uses statistics to better grasp the context
• Contribution to the field
  – It “is” the field to micro lending
  – Relations with World leaders ensure field
    development
              Critique Contd.
• Raises the question of whether micro-lending
  is applicable in first world countries.
• In a sense his goal is the opposite of “trickle
  down theory”
• Gives “short shrift” to issues such as GDP and
  overpopulation
           Personal Prospective
•   Establishment of the Bank
•   Utilitarianism
•   Competition
•   Ownership of the Bank
         Establishment of the Bank




                    Government



The government bears responsibility for its failure to keep
the market fair.
                    Utilitarianism
• An action is right if it tends to produce, the greatest
  amount of good for the greatest number of people.
                    Competition
• Competition tends to produce efficiency in the market and
  benefits the general consumer by resulting in a variety of
  goods at the best prices.
              Ownership
• Government control would not be good for
  bank’s development
        Possible Improvements
• Explaining how his theory negates traditional
  economic theory
• Is micro lending “one size fits all”?
• More technical and less optimistic approach
• Include organizational structure and balance
  sheets
• Is it possible for normal banks to micro lend?
  – If so? How?
 Thank You
Question or Comments
                              References
• Picture of Mr. Yunus (slide 3)
    – http://www.speakers.com/media/2012/images/yunus-muhammad-bio09.jpg
• Title Page
    – http://thelemonaideguide.com/lemonaideblog/wp-content/uploads/2010/05/capitol-
      vs-finance.jpg
• Book pic
    – http://covers.openlibrary.org/w/id/1468840-L.jpg

				
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posted:1/14/2013
language:English
pages:21