When did it first dawn on you to start loaning small amounts of money to poor people with no collateral?
In 1974, there was a famine in the country. We felt terrible because instead of things improving after liberation, things were getting worse. I felt empty because my knowledge in economics meant little to the people suffering. So I would go out to the village near the University and tried to do something to help. I saw how people suffered for not having access to tiny amounts of money. Villagers had to borrow from loan sharks on terrible conditions some even becoming slave labor for the money lenders. I made a list of 42 people most seriously in debt who, all together, owed no more than $27, and I went around the village according to the list, giving each person the money they owed with no conditions other than that they concentrate on their work and repay me when they could. It was a big shock for me that just a little bit of money could make people so happy. With the money, they could become free.
Investors and philanthropists have been astonished that your impoverished clients repay 99% of these loans on time. How does the Grameen Bank work?
Each branch is self-contained, its own Grameen Bank, made up of a community of borrowers and local staff who all know each other. We have a total staff of 20,000, lend $800 million a year to 6.6 million members nationwide. The Bank is very close to its community; there is a relationship of trust and the system as a whole encourages repayment. There is no attempt on anyone's part to outsmart anyone. After all, everyone wants to keep the door open to opportunity and we present that opportunity.
You maintain that credit is a human right. Why?
For any human right the right to work, shelter, education a person needs to be enabled to do it. Society can create the environment where this takes place, but the fundamental thing with human beings is self-employment, for someone to unleash their own potential, to unwrap that gift of one's self and find out who you are. With credit, people can begin to create income and improve their lives. If the right to credit is established first, then it makes other human rights easier to achieve.
96% of Grameen Bank members are women. Why is that?
When we started, we looked at all the other banks in Bangladesh and found that only 1% of their membership were women. We aimed for 50/50 in the beginning. The main challenge for a poor woman was overcoming the fear in her which was holding her up. We found that compared to men who spent money more freely, women benefited their families much more. Women wanted to save and invest and create assets, unlike men who wanted to enjoy right away. Women are more self-sacrificing, they want to see their children better fed, better dressed and, as a result, the conditions of the entire community improved.
In a heavily Muslim society, did this trigger any opposition?
We've had opposition on many fronts. Of course, the first opposition came from the husbands, who thought we were insulting them. The second were the mullahs, who started preaching that taking money from the Grameen Bank was against religion and that they should leave it to their husbands. Some even scolded the women for being so gullible to listen to us and claimed that we were Christian missionaries! We told them that in Islamic history women had been warriors and businessmen look at the Prophet's first wife! There was also political opposition: the radical Left campaigned against us because they thought we were part of an American conspiracy, bringing capitalism to the poor so they wouldn't join the revolution. The Right in the country suspected that we were trying to organize the people into a political force that we were a communist threat. We had people accusing us of being guilty of two opposite things! But in time people have gradually accepted the good that Grameen has done, and the social empowerment it has created with millions of the poorest Bangladeshis is undeniable.
What singular achievement do you take most pride in when looking back at three decades of the Grameen Bank?
I would have to say that I did something that challenged the banking world. Banking now must be all inclusive. Conventional banks look for the rich; we look for the absolutely poor. All people are entrepreneurs, but many don't have the opportunity to find that out. All I said was that poor people can handle money to improve their situation, and the effectiveness of this is being demonstrated tenfold around the world.
You said a decade ago that our grandchildren will have to go to museums to see poverty. Do you still hold fast to that conviction?
Yes, absolutely: 58% of the poor who borrowed from Grameen are now out of poverty. 2005 was declared the Year of Microcredit and there are over 100 million people now involved with microcredit (programs). At the rate we're heading, we'll halve total poverty by 2015. We'll create a poverty museum in 2030.