How much money is needed to end poverty?
Is it going to be billion of dollars perhaps trillions?
Or is the number too big to wrap our heads around?
One man did it with $27.
Yes. With $27 and a compelling idea, he brought hope, opportunity and pride to some of the poorest people in the world.
This story is about him.
In 1976, a professor started a pilot project in Jobra village in the Chittagong district, Bangladesh.
He saw women in the village who made bamboo furniture used most of their profits to repay usurious loans. They needed loans to buy raw bamboo but were exploited by the lenders for the lack of options.
Traditional banks did not want to make tiny loans at reasonable interest to the poor due to the high risk of default.
The man went on to challenge the traditional system as he believed that given a chance, poor women would repay the money.
He lent US$27 of his money to 42 women in the village, who made a profit of(US$0.02) each on the loan.
This seeded idea of microcredit as a business model and professor - Muhammad Yunus went on to become the first Bangladeshi to win a Nobel Prize.
The reason being - "lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty" and that "across cultures and civilisations”. Now millions of people have benefited from microcredit and Muhammad Yunus has been one of our inspirations at Rang De. Let’s know more about his vision - After the success of his first project, Yunus officially secured loans from multiple banks to lend to the poor. Five years later, the pilot project began its operation as a full-fledged bank for poor Bangladeshis and was named Grameen Bank How did the model become so scalable and successful in the first go? That’s because Muhammed Yunus saw his fellow citizens from a very different perspective from the banks' traditional mindset. Banks went to the rich people, they saw poor people as risky. The grameen bank believed in the potential of poor people and took a bet on them.
Banks needed to know all the intricate details of the past before lending. Grameen bank was more interested in the future. They believe that poverty is made by the system. And only the system can make or break it. Poor people are not poor by choice. Banks went to city centres and lent significantly to men. Grameen bank went deep into remote villages and heavily banked on women. They saw women wanted to build both for themselves and their families. Grameen bank has lent to 8.3 million borrowers out of which 97% are women. This shift in worldview was what made Grameen bank lend over US$12.5 billion since its inception. Muhammed Yunus saw potential where banks only saw risk. He removed many imposed implications about the poor by root and made banking upside down. It was his ability to look beyond the attitudes of his time that made a difference in the lives of so many people. ------------------------------------------------------------------------------- When Prof. Yunus and the Grameen Bank won the Nobel Peace Prize in 2006, it sparked the inspiration for our co-founders Ram and Smita. They felt that credit could play a transformative role in ending poverty. And so, with Rang De, they set their sights on addressing affordability and access. You can share the same vision and invest at www.rangde.in