Muhammad Yunus — Creative Potential of Bonsai People

Nobel Peace Prize Winner, Bangladesh

The contribution of the creativity and ingenuity of one person benefits everybody else. One inventor, one discovery, will change the whole of everybody, it touches everybody’s life.

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Muhammad Yunus — Banker to the Poor

Professor Muhammad Yunus established the Grameen Bank in Bangladesh in 1983, fueled by the belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves.

From Dr. Yunus' personal loan of small amounts of money to destitute basketweavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through microlending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide.

Born in 1940 in the seaport city of Chittagong, Professor Yunus studied at Dhaka University in Bangladesh, then received a Fulbright scholarship to study economics at Vanderbilt University. He received his Ph.D. in economics from Vanderbilt in 1969 and the following year became an assistant professor of economics at Middle Tennessee State University. Returning to Bangladesh, Yunus headed the economics department at Chittagong University.

From 1993 to 1995, Professor Yunus was a member of the International Advisory Group for the Fourth World Conference on Women, a post to which he was appointed by the UN secretary general. He has served on the Global Commission of Women's Health, the Advisory Council for Sustainable Economic Development and the UN Expert Group on Women and Finance.

Professor Yunus is the recipient of numerous international awards for his ideas and endeavors, including the Mohamed Shabdeen Award for Science (1993), Sri Lanka; Humanitarian Award (1993), CARE, USA; World Food Prize (1994), World Food Prize Foundation, USA; lndependence Day Award (1987), Bangladesh's highest award; King Hussein Humanitarian Leadership Award (2000), King Hussien Foundation, Jordan; Volvo Environment Prize (2003), Volvo Environment Prize Foundation, Sweden; Nikkei Asia Prize for Regional Growth (2004), Nihon Keizai Shimbun, Japan; Franklin D. Roosevelt Freedom Award (2006), Roosevelt Institute of The Netherlands; and the Seoul Peace Prize (2006), Seoul Peace Prize Cultural Foundation, Seoul, Korea. He is a member of the board of the United Nations Foundation.

[Bio courtesy of]

  • Unleashing Human Potential

    People are very creative … Whether you are born in the richest family in the world or the poorest family in the world, you have the same capability as a human being.  You are packed with all the potentials that a human being is supposed to have. It is a question of how you unleash that energy that is packed into you.  Some societies facilitate that unleashing process, in some societies they don’t.  So we have to remove those barriers which is keeping them down, so that they unleash themselves.  It is good for the whole mankind as a whole, it’s not just for the person.  The contribution of the creativity and ingenuity of one person benefits everybody else. One inventor, one discovery, will change the whole everybody, it touches everybody’s life.

  • Bonsai People

    When I talk about poverty, one example I like to give is the bonsai tree.  If you go and look at the tallest tree in the forest and pick the best seed of the tallest tree and plant it in a flower pot, you get about a meter high or less than a meter high plant, exact replica of the tall tree that you saw in the forest.  So what is wrong with this little one?  Is it the seed, no, we picked the best seed possible, planted it on that.  So what is wrong?  The wrong thing is the flower pot.  Because you didn’t allow the base on which it could grow.  If you had planted in the real soil, it would be as tall as the tree you saw in the forest.  Poor people are bonsai people; society doesn’t provide them the base … Human beings are not animals, animals are the ones who go around and look for food all day and then get tired and sleep and the next day begin in search of food.  Human beings are created for much bigger mission, to take care of the whole planet and to take it forward.

  • Free Markets = Good. Free-for-all = Bad.

    On the free market thing, this is the best thing that happened to the human society that you have rights to enter and you have rights to choose.  It is the freedom of choice, free market is freedom of choice, freedom of choice in terms of what you produce and freedom of choice in terms of what you buy, you want to possess for yourself.  So those things are important. 

    But we need the regulatory framework – I wouldn’t say that the free market is a free for all situation, that I’m totally against and that is what is creating problem for globalization and free market is interpreted as a freedom for everybody.  Freedom for everybody is destruction of the poorest.  So the rule of law with free market, that two goes together.  You cannot have a highway called globalization where all the nations are moving with their merchandise, expecting that everybody will have their choice how to do this in the free market.  It’s not.  It’s a big truck, big vehicle, which hits Bangladeshi rickshaw and gets off the road.  I’m saying that even in there, in the free market situation, you have to have the traffic rules, so that you know your lane, you can’t go and bang everybody out, rickshaw has its’ own lane and it will be safe and it will be slow and rickety but it has its’ own path, it will go to its’ destination.  So free market has to be interpreted that way, it has to be within the framework of rule of law.

  • How the Grameen Bank Microfinance Model was Born

    I saw how people suffered for tiny little money, and they had to go to the moneylender to borrow the money and get started with their life and whatever activities they are involved with.

    So I went around making list of people who took money from the moneylenders and when my list was complete there were 42 names on that list and the total money they borrowed from the money lenders were $27.  And I was shocked.  Here we talk about millions of dollars and billions of dollars of development assistance to help the economy grow and so on.  We never paid any attention to people who needed such a small amount of money.

    So I was running around to meet all those officials at the high levels of the banking structure and everybody gave me the same answer.  It cannot be done, poor people, sorry, if you give them the money they will simply eat it up, they will not be able to pay back, they will be more in trouble then they are right now.  So I said no, they are smart people, they know how to use the money, they are already doing that, all they need is money so they can go ahead and doing their job.  Nobody was persuaded.  Ultimately, I offered myself as a guarantor, I said I’ll sign all the papers since your rules don’t permit to give directly, so it can be done through me and I still guarantee and I take the risk.  You are not willing to take the risk, I am willing to take the risk, let’s do it.  That’s how it was done.

  • Caution: Interest Rates

    Yes, there are a lot of problems in the micro-credit movement itself, definition of micro-credit is being misused by many people, everything under the sun is called this micro-credit, we need to clarify yourself, what do you mean by micro-credit.  This is one problem.  And so people are charging too high interest, saying this is a good opportunity to make money.  So they are moving in the direction of the moneylenders.  This is where we are coming from to stop the moneylenders exploiting people. 

    Grameen Bank interest rate is a simple interest rate, it is never compounded.  On top of it, there is a rule in Grameen Bank, total interest can never exceed the total principal.  So no matter how long you take to pay back the loan, your money will not accumulate into several times the principal amount, so that is another restriction.  Unlike the commercial banks tradition where all loans interest in compounded quarterly and then the interest keeps on increasing as you take longer and longer.

  • Poverty as Darkness

    Poverty is a kind of a darkness around you. You don’t see any hope, any ray of hope. You live every day the same way, in the darkness. You don’t have a future.

  • Blocked from Financial Systems

    We have a very strange financial system in the world. More than two-thirds of the world’s population are rejected by the financial system so it is a system which is limited to very privileged people.

    Here we talk about millions of dollars and billions of dollars in development assistance to help the economy grow and so on. We never paid any attention to people who needed such a small amount of money.

  • Why Women?

    Money that went to the family through women brought so much benefit to the families. Women were very cautious with their money. When they start earning income, children become the first beneficiary of that income. And women had longer vision. They wanted to build up to something. Men always wanted to enjoy themselves right away rather than wait for the future and so on ... Women having access to finance, access to money changes everything, because now she has the power of money.

  • Results

    In our last count we see that fifty six percent of the families within Grameen Bank have moved out of poverty.

  • A small amount makes a big difference

    It’s amazing to see how a small amount of loan like fifty dollar, a hundred dollar, can change a person’s life and the whole family gets out of poverty.