Monday, September 14, 2009

Book Review: Banker to the Poor

Banker to the Poor: Micro-Lending and the Battle Against World Poverty Banker to the Poor: Micro-Lending and the Battle Against World Poverty by Muhammad Yunus

My rating: 3 of 5 stars

As a professor of economics at Chittagong University in Dhaka, Bangladesh, Muhammad Yunus witnessed first hand the devastating poverty, disease, and death associated with the famine in 1974. He grew frustrated with the disconnect between the ivory tower of the university and the people dying right next door in the village of Jopra. He decided to take his students right into the village and study poverty. "I wanted to teach my university students how to understand the life of one single poor person."

Yunus tells the story of how he founded Grameen Bank, beginning with the $27 he lent a group of 42 villagers. The book is a combination of memoir (with a bit of personal history) and the story of the bank's evolution.

He has definite ideas on government assistance and poverty intervention; he believes that microlending is the best way out of poverty rather than welfare or charity. I found the book to be very thought provoking. The vast majority of the loans Grameen gives are to women (I believe around 97%). Yunus defends this practice against Muslim clerics and conservatives who feel this is inappropriate. What I liked about Yunus' approach is that he designed a simple way to reach the poorest of the poor--not the farmers in the fields, but the villagers who didn't have land or the basic materials to make a living.

The beginning of the book was the best--he talks about the growth of the bank and the refining of their processes. I also liked the personal stories of real-life bank members as well as the bank employees. Each bank member must commit to 16 decisions toward changing their lives, and obtaining a loan is not something to be taken lightly.

The second half was not as captivating, as he talks about the expansion of Grameen. Overall, however, I found the book inspiring and interesting. Yunus not only won the Nobel Prize in 2006, but he was also one of President Obama's recipients of the Presidential Medal of Freedom last month.

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