The Hindu Business Line : Grameen Bank, Yunus knock down women's despair

Mahatma Gandhi was not given the Nobel Peace Prize. That is understandable as Gandhi was an inconvenient human being. Thanks be to the team in Oslo, that my favourite banker, Muhammad Yunus and his Grameen Bank were given the Nobel Peace Prize. Again, that is not surprising as sometimes the West is fairer than the East.

Grameen works on the premise that the poor, without any collateral, are bankable. It works on the compassionate rule that the poor have no assets (otherwise they would not be poor) and yet have to be funded. The loans will bear a cost (interest rate) and will have to be promptly paid back.

Grameen Bank set aside the basic premise of commercial banking: loans come only against assets. Yunus was taking a risk. There could be defaults. But that did not happen with the recovery at Grameen Bank being placed at 98 per cent.

Perhaps, more than any economist, including poverty experts like Amarthya Sen, Yunus realised that the poor are more honest than corporates. Loan repayment for them was a living issue (forget ethics). If they did not pay back a loan, they could not get another and bigger loan.

Long time ago, my good friend, Dr Y.S.P. Thorat, Chairman, Nabard, passed on his Bangladesh Diary: The Grameen Experience to me. He had noted down his observations while working and living with the Dilubari Durgapur Branch of Grameen Bank between March 7 and 12, 1999.

The cover flap of the Diary carries a remark by Muhammad Yunus: "Grameen Bank started because I approached a commercial bank merely to solve a local problem. I realised very soon that the problem was not at all a local one. In order to solve the problem, the entire banking system would have to be turned upside down and fully reorganised."

Yunus may not have turned the banking world upside down. But with Grameen Bank he offered the poor the best option. That at least cannot be denied. The best of Dr Thorat's diary is the interview with a borrower Asiran Begum. Resident of Shampur village, Asiran belongs to Group No. 2 of centre No. 11. She was born in Shampur some 30-35 years ago though she is not sure. Her father bought and sold edible oil. She was the third child in a family of seven. She was illiterate. When Asiran was young her father became mentally disturbed. He sold off the land and bought cattle of which 24 died at one go. The family became poor and lived on the principle of Bikri kare khaye (selling an asset to eat).

She married and went to her husband's home at Yusufpur Nasopara. It may be best to put the rest of her story in Dr Thorat's words: "He was a farmer with a small holding. She listened to him. He did not beat her. Six years later, he married again. This broke Asiran ... .I spoke to her as gently as I could of those days and her eyes clouded. She hesitated to speak and did so only after taking permission of her brother who was present. Yes times were bad. So bad that Asiran moved back to her father's home with her two children. She ate once a day. Sometimes twice. She worked in the streets as part of the labour force laying roads. It was at this time that she joined a group out of sheer desperation. Her first loan was Taka 2,000 with which she purchased four goats. The balance was used for husking rice.

"She repaid her loan. I asked her how. Her answer was characteristic: "If I didn't repay, how would I eat again. How would I borrow again." She borrowed again and bought some cows for Taka 3,000. The cows died. How did she repay? From the Group Fund. "No", said Asiran Begum. "I paid back the loan from income from the land and by working once again on the road."

"After the cow disaster, Asiran thought for a long time as to what to do. ... .Village women did not go to the bazaar. She reasoned that if she could take one item which women always bought to their homesteads, may be she would be on to a good thing. And so she hit on becoming a travelling, door-to-door, village-to-village saleswoman of saris. She borrowed for this venture. Her first batch of 10 saris were all sold in a few days. She was encouraged. She recycled the funds and again the same magic happened. ... Asiran has never looked back."

Grameen Bank and Yunus have knocked down the despair of thousands of Bangladeshi women. If Yunus banked on women it is because they never desert, they never run away like men.

In India, at one point of time bankers thought Grameen was not to be mimicked. Somehow, Nabard worked on the SHG-Banking concept based on clusters of 10 women in a village. This writer can still recall a Muslim woman with four kids at a Self Help Group in Kolhapur. She did not weep when she said that her husband has left her and that the SHG was keeping her kids alive.

The SHG-Banking idea has spread in southern States and to an extent in Rajasthan where cattle is preferred over women. In the north, the SHG-Banking group has little to show. The Nabard has also not helped as it does not offer any financial help to the SHG idea. Nor has it come up with solutions to help the women groups market their products directly.

In fact, Nabard has done little for the poor and one is sure Dr Thorat will strongly disagree.

For bankers in India, hopping from one air-conditioned room to another, funding the poor is a chore. Not an act of passionate conviction.

P. Devarajan

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Grameen Bank, Yunus knock down women's despair