Charity

Yunus explores the realities of handing out money to the poor. We have all been there, faced with a beggar on the street we have a desire to help them out but we really don’t know how to and in a spilt second we reach into our pocket and give them a small amount of money. We know that though it is not much for us it will mean a lot to them, it makes us feel like we are doing some good but as Yunus points out this behaviour can often be very damaging, here’s why.

• Giving money is self gratifying and is a way for us to avoid dealing with the real issues.
• Giving money is only a short term solution it does not offer long term alleviation from destitution.
• Giving money creates dependancy, the poor become reliant on handouts.
• Charity can remove the incentive for becoming self sufficient.
• Charity can deprive the poor of their dignity.

Yunus states that he “does not question the moral duty to help, nor the instinct to want to help, only the form that help takes”. Charity and aid is not just applied to individual poor people but also to governments who play on their countries problems and natural disasters to receive international aid, saying that “aid distorts the economy and political climate”.

Economic Theory and the Reality of the Poor

Yunus talks about his realistion that economic theories did not explain the suffering and starvation that he saw within his local village (Jobra). He speaks about those with the knowledge not understanding how to apply it to the real world. In investigating poverty he started to focus “on the task of unlearning theory, and on learning instead from the real world. [He] did not have to travel miles to find the real world. It was just outside the doors of the classrooms. It was everywhere expect inside the classroom”. He talks about the drawbacks of the market is that it “always pushes things on the side of the powerful and that without the human side, economics is just as hard and dry as a stone”.

Establishing the Target Group of a Community Programme

Through Yunus’s experiences he talks about the difficulties of distinguishing who the poor actually are and the different levels of poverty. Yunus puts forward three definitions of the poor in Bangladesh and warns those working in development that “if one mixes the poor and the non-poor within a programme, the non-poor will always drive out the poor, and the less poor will drive out the poor. This will continue unless one takes the protective measures right at the beginning”.

Challenging Traditional Banking

Yunus challenges the methods of traditional banking, mainly the fact that the more you have the more you can borrow and less you have the less open the banking system is to you. He talks about how he defied the world banking system and the belief that if you leant money to the poor they would never be able to pay it back. In fact through establishing the Micro-Credit system he has shown that those who are poor have a better repayment record than those who have a lot of wealth.He shows the benefits of breaking down payments to overcome the psychological barrier of paying one big lump sum, the power of peer pressure and peer support in helping borrowers to repay loans and going beyond the traditional bank-borrower relationship.

Tackling other Social Problems through Micro-Credit

Yunus describes the knock on effect of his programmes in helping to tackle not just hunger and homelessness but also, equality, education, inclusion, abuse etc. He talks about keeping his borrowers engaged in the problems even through extremely difficult times for instance natural disasters and the importance of being able to stay flexible in your approach.

Developing a System that Works

Yunus describes in depth the steps that Grameen take to establish a new programme and working with really hard to reach communities. He empathises the importance of growing slowly and most of the Grameen projects take two to three years to get going. He also talks about developing Grameen employees and making sure that everyone has an understanding of the target group by spending time working with them as part of the company induction. This ensures that Grameens employees fully understand it’s ethos and what the organisation is aiming for. He talks of keeping the organisation separate from government bureaucracy so that they can continue to grow in the way that will best serve their target group.

Grameen and Developed Countries

The book also talks about how the programme was translated into developed societies such as the USA and Europe, talking about the challenges and pitfalls of the welfare state and the advantages of self-employment. In Norway he demonstrates how the model was used not to alleviate poverty but “as a tool for social integration”.

Conclusion

All in all the book offers a great insight into the world of Micro-Credit and offers some great tips on how to start, run and scale up community businesses/ programmes. The reader is also made to think about the wider issues of associated with alleviating poverty both in developing and developed societies. To find out more about the Grameen Bank click here to visit their website.