Banker to the Poor

One of the great classics in the modern world of philanthropy and social entrepreneurism is a book entitled Banker to the Poor by Muhammad Yunus. It's the story of Yunus, originally an economics professor from Bangladesh (then East Pakistan), and how he invented the hugely successful phenomenon of micro-lending to the poor.

Yunus' work would radically change the lives of millions of the world's poorest people, and eventually earn him the Nobel Peace Prize.

Yunus' findings help to overcome the great irony that those who need credit the least are the most likely to receive it. Conversely, those who need credit the most, are the least likely to receive it.

He quickly learns that even tiny loans, the equivalent of $25 or $50, can empower the poorest of the poor to start small businesses and escape the cycle of poverty. Most interestingly, Yunus finds that his borrowers repay their loans more than 98% of the time, far higher than conventional borrowers.

It's not as simple as it seems, and Yunus and his organization, the Grameen Bank, develop a radical approach to lending. Overcoming cultural barriers is only one problem. Through trial and error, however, Yunus and his team develop original solutions. For example, lenders are recruited only in groups of five peers who regularly meet to discuss their succeses and failures. The support, and peer pressure, of these lending groups creates a situation of self reliance that dramatically increases each member's chance for success.

Muhammad Yunus is a true original, and his work and findings have done more to help millions of the world's poorest than most any government aid program could hope to achieve. His work has been emulated by countless organizations, stretching across the globe. A few more such breakthroughs, rightly implemented, could bring about the end of world poverty as we know it.