Back to Stories
It all began with a famine – How the “Banker to the Poor” tackled poverty for half a century

This professor got so deeply involved with social innovation, he made his name known and won the title of the Nobel Peace Prize laureate. This is none other than the “Father of Microfinance” and “Banker to the Poor”, Muhammad Yunus, a professor of economics from Bangladesh.

Rooting out the society’s pain point

Yunus returned home from the United States in the 1970s to teach. In 1974, Bangladesh suffered from widespread famine. While passionate about education, Yunus could not help but wonder – should he be getting out of the classroom instead of staying an armchair strategist? “But where do I begin?”

He started observing his surroundings. One day on his way to university, Yunus stumbled upon a scene that puzzled him – despite the severe lack of food, there was a large piece of arable yet abandoned land. To uncover the reason behind, he started investigating with his students in the field.

A US$27 experiment

Getting in touch with the villagers led Yunus to realise that the problem lay within the irrigation system. Together with his students, Yunus worked towards developing irrigation technology for the village to enhance their harvest, while setting up cooperatives to improve the local food distribution.

His initiatives brought about certain progress, but along the way, Yunus learned that these were not enough to solve the root causes of poverty, or actually making a difference to the livelihood of villagers. He continued interviewing them when it dawned on him: a small loan is enough for the women to buy crops or raw materials to run small businesses, enough to alleviate the plight.

Traditionally, banks are not willing to loan to these “unbankable” women, who could only resort to borrowing from usurers and be exploited. Yunus decided to offer an interest-free loan of US$27 from his own pocket to 42 women for buying raw materials. Turned out these women not only paid back the money on time but also earned a little profit.

A lady who benefited from the services of Grameen Bank. (Photo: Grameen Bank)

Loaning while learning

Building on his little experiment, Yunus established Grameen Bank in 1983, loaning money to the poorest of the poor with a unique set of principles. For instance, the borrower has to adhere to “16 Decisions”, including committing to educating their children and drinking clean water. The model achieved enormous success – to date the Bank has served nearly 9 million people, 100 thousand of which are homeless. Micro-financing blossomed across countries, winning Yunus the Nobel Peace Award in 2006.

36 years have since passed. Over 90% of Grameen Bank’s borrowers remain female. It is believed that while men invest the loan in themselves, women invest instead in their families, contributing to a higher chance of poverty relief. No wonder “rural women bring about change to their families” is one of the Bank’s creeds.

Professor Yunus was invited to speak at CUHK in 2015. (Photo: CUHK Communications and Public Relations Office)

Switching gears and starting up

Today, Grameen’s business has expanded beyond banking services to include telecommunications, food, funding and renewable energy. The group grew stronger, but Yunus, the one who started it all, was forced to step down in 2011 from government intervention.

This, however, did not stop Yunus from running all over the world and promoting his ideas. Proclaiming that “everyone is born an entrepreneur”, he founded Yunus Social Business (YSB) the same year he left Grameen. YSB organises global efforts to address poverty and other social issues via commercial means, while encouraging young people to “be job creators, not job seekers”.

In pursuit of greater happiness

The professor crossed paths with CUHK in 2015, when he was invited to speak at a University Lecture on Civility. Yunus Social Business Centre at CUHK was then set up to initiate the development of social business in Hong Kong. Yunus firmly believes that many seek higher satisfaction beyond generating a profit. “Making money is happiness; Making other people happy is super happiness.”

By Kary Wong@ORKTS
English translation by Cathy Wong@ORKTS