Muhammud Yunus and Microfinance.

So when Peter and I go to Africa, I am hoping to meet up with some women involved in the Widows Program that Children of the Nations started in 2006. The program is similar to a microfinance program, but the women do not pay interest on the loans they receive, and I am not too sure if they pay the loan back in full? I suppose that is something I could find out! Needless to say, I am extremely interested in microfinance as a way to lift people out of poverty, and figured what better person to learn from than Muhammud Yunus, the man who started the Grameen Bank.

So lately I have read his books Banker to the Poor and Creating a World without Poverty. Quite frankly, I enjoyed Banker to the Poor more. Perhaps this was because it was the first Yunus book I read, and it provided much more background about the Grameen Bank and Foundation, whereas Creating a World without Poverty discussed the potential of social business in the world and the countless social businesses that have been created through Grameen.

I just wanted to share some of my insights and favorite bits from both books...

Creating a World without Poverty.

Poverty is the absence of ALL human rights.

When I first read this I thought WOW that's a bold statement, but then I started thinking about poverty and how true that statement really is. When someone is extremely impoverished, they are living in inhumane conditions, without proper sanitation, food, etc because they can NOT afford to live any other way. All their human rights have been taken away from them and completely stripped away, or perhaps they were never fully granted privileges and rights in the first place due to their poverty?

Banker to the Poor.

Welfare laws in the U.S. create disincentives for welfare recipients to work. Those who receive welfare become virtual prisoners not only of poverty but of those who would help them; if they earn a dollar it must be immediately reported to the welfare authority and deducted from the next welfare check. Welfare recipients are not allowed to borrow money from any institutional source, and Microcredit programs couldn't approach welfare recipients at all.

In the developed world, my greatest nemesis is the tenacity of the social welfare system: recipients of a monthly handout from the government feel as afraid to start a business as the purdah-covered women in Bengali villages. Many count the amount of welfare money and insurance coverage they would LOSE by becoming self-employed and conclude the risk is NOT worth the effort.

I believe in the power of the free market and the power of capital in marketplace. I also believe that providing unemployment benefits is not the best way to address poverty. The dole only increases their misery, robs them of incentive and self respect.

Poverty is not created by the poor. It is created by structures of society and the policies pursued by society. Change the structure and you will see that the poor change their own lives.

I believe that all human beings are potential entrepreneurs. Some of us get the opportunity to express this talent, but many of us never get the chance because we were made to imagine that an entrepreneur is someone enormously gifted and different from ourselves.

Poverty does not belong in civilized human society. Its proper place is in a museum.

Can you even IMAGINE poverty not existing? How glorious that would be! Yunus says that poverty will be a thing of the past, merely something we reflect on and that we only see in Museums. The imagery of this concept is amazing, to think that maybe my grandchildren or my great grandchildren will read about poverty and its dehumanizing effects in history books is simply CRAZY and utterly divine!

As you can see Yunus is not a huge fan of the social welfare system we have set up in our country to favor the unemployed. Personally I agree with him. I mean why would someone want to get a job if they were going to lose their benefits that may ultimately pay them more? Why have we set up a system that discourages people from actually getting a job? Don't we want this for our people? Lives would be changed, hearts transformed, personal value instilled, and self esteem would increase. Is this really the best system for us? And if not, how do we go about changing the system?