Banker to the Poor

Banker to the Poor: Micro-Lending and the Battle Against World Poverty is a 1999 autobiography by Muhammad Yunus, who founded Grameen Bank. The book describes Yunus’ ideas surrounding money and how the world’s banking and financial systems could be revolutionized in order to eliminate poverty. In 2006, Yunus was awarded the Nobel Peace Prize for founding the bank.

Yunus begins by describing his experience as a professor of economics in Dhaka, the capital of Bangladesh, in 1974, when famine struck the country. Shaken by the sight of masses of starving people, Yunus found faith in the power of economic theory to solve problems. This inspired him to study the nearby village of Jobra, which was in the grip of the famine. His observations there formed the seed of the idea for Grameen Bank.

Yunus then backtracks to recount his own life story. Yunus was born in the village of Bathua in 1940, when the country was still part of the British Empire. He describes his home life and childhood as well as the momentous events that resulted in the independence of India and Pakistan. His mother was emotionally unstable, but his father was a reliable presence in the lives of his children. Yunus discusses how his father handled money and how the murder of Quazi Sahib over a small sum of money affected him and slowly shaped his attitude toward economics.



After accepting a teaching job at his college in Chittagong, Yunus launched a business making packing materials, using loaned money to start the factory. The business was a success. His father, nervous about owing money, forced Yunus to pay back the loan as quickly as possible. Yunus then accepted an opportunity to earn his PhD in America, where he experienced huge culture shock and met Vera Forostenko. The two married and moved to Tennessee. While living there, Bangladesh declared independence from Pakistan; Yunus and other Bengalis in Tennessee formed the Bangladesh Citizen’s Committee to support their newly independent country. Yunus took part in protests and political action, decrying the attempted genocide of Bengalis by Pakistani forces.

When the political situation in Bangladesh stabilized, Yunus moved back to the newly independent country. He accepted a role with the new government’s Planning Commission, but was quickly disenchanted with government bureaucracy and red tape, and quit. He moved back to Chittagong and resumed teaching. His life story then catches up with the novel’s introduction. As he studied the poor in the villages near the college, he discovered that in the midst of famine, agricultural fields lay fallow because of a lack of irrigation. Yunus founded the Chittagong University Rural Development Project, through which his students earned degree credits by assisting the poor, beginning with an irrigation project.

Yunus came across a group of women making chairs. They lacked raw materials and needed just $27 to complete their inventory, but their only access to credit was at incredibly high interest rates that made profit impossible, so Yunus loaned them the money himself. The women used the funds very wisely, and their chair business succeeded. From this experience, Yunus developed the principles that would form the foundation of Grameen Bank: Above all else, the poor need credit on reasonable terms. With sufficient credit, anyone can find a way out of poverty simply through their own initiative and work ethic, but they must first have credit.



Yunus approached Janata Bank about a program to loan small sums to the rural poor at very low interest rates, but the bank was not interested. Yunus eventually guaranteed the loans himself in order to give the poor an opportunity to break out of the cycle of poverty.

From there, Yunus began to organize what would become Grameen Bank, which focused on loaning small amounts of money to the poor. He studied how other banks work, then often did the opposite. For example, he did not require collateral or endless paperwork; he conducted business out in the open so everyone could see how the bank operated; and he was willing and eager to loan to women.

In 1977, Vera and Yunus were divorced, and Vera left Bangladesh with their daughter, Monica. Yunus was torn, but concluded he could not leave with so much work left to be done. (He later met Afrozi Begum, who he married in 1980. They had a daughter together in 1986. Afrozi shared Yunus’s comfort in Bangladesh and his passion to improve it.)



Grameen Bank continued to grow. In 1977, Yunus formed a partnership with Krishi Bank and opened Grameen Bank’s first physical branch. He began to get financial support from around the world, disbursing tens of millions of dollars to the poor in a series of small and largely successful loans.

In 1982 there was a military coup, and martial law was declared. Yunus was trapped at the conference he was attending, unable to leave by decree of the new government. He happened to be trapped with the man who would become the country’s new finance minister. Yunus described his work with Grameen Bank to him, and he helped Yunus reform the bank as an independent institution, which allowed it to grow even larger—even opening branches in the United States. Grameen Bank became completely independent; it no longer needed any donations, and funded its loans solely from its own profits.

Yunus concludes his story with a vision of a world free from poverty, noting that other evils have been eliminated, like slavery and specific diseases.