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Small Can Be Beautiful

I first met Professor Muhammad Yunus known to the world as “banker to the poor”, after it was announced that he would receive the Nobel Peace in autumn 2006. He had arrived in Beijing to speak in Bangladesh which pioneered grass roots credit model based on human trust and not physical collateral, Yunus put a new spin on humanism declaring, “Credit is a human right.” That autumn, his words rang in ears of his Chinese hosts.

Before a reception welcoming him to Beijing, the humble almost self-effacing Yunus declared, “For the first time poor women have received the Nobel Peace Prize,” referring to the Grameen Bank’s borrowers. “When awarding they did not realize that the prize had been given to poor women who must struggle for their lives.” The name “Grameen” means “village” in Bengali. All lending transactions take place at the village level, in makeshift pavilions of corrugated aluminum roofs assembled voluntarily by the villagers themselves.

When Bangladesh became independent Yunus was teaching economics in Tennessee. He returned to his home only to witness famine contrasting with the economic theories he has been taught in America. Remembering that time he reflects, “I became involved in the poverty issue not as a policymaker or as a researcher. I became involved because poverty was all around me and I could not turn away from it. In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly I felt the emptiness of those theories in the face of crushing hunger and poverty. I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people’s struggle to find the tiniest amounts of money to support their efforts to make out a living.”

He recalled how institutional economics training taught one to think in millions and billions of dollars about big infrastructure projects. But for most impoverished people however, credit of only ten or twenty dollars can change entire lives, for the better. Yunus recalled, “ I was shocked to discover a woman in the village borrowing less than a dollar from the money-lender, on the condition that he would have the exclusive right to buy all she produces at the price that he decides. This, to me, was a way of recruiting slave labor. I decided to make a list of the victims of this money-lending in the village next door to our campus. When my list was complete, it had the names of 42 victims who borrowed a total amount of US$27. I was shocked, I offered US$27 from my own pocket to get these victims out of the clutches of those money-lenders. The excitement that was created among the people by this small action got me further involved in it. If I could make so many people so happy with such a tiny amount of money, why shouldn’t I do more of it?

New Model of Micro-Credit

From this simple approach to reality and human struggle for survival against the odds of abject poverty, Yunus created they concept of micro-credit. It has since revolutionized not only the basic assumptions of macroeconomics but the very function that banking should play in human society as well. Moreover, Yunus presents a powerful concept by empowering individuals with more than just micro-credit but self-esteem and identity.

“Everyone is interested in how much money we lend, how we get paid how the money is returned, how accounts are kept – everything about money,” explained Yunus. “But The Grameen Bank is not about money. Ninety percent of Grameen Bank is about people. The bank’s only collateral is trust.” When somebody is given a micro-credit loan, they are receiving the trust of Grameen Bank. “If anyone can trust her with what is for her so much money she will work so hard.” Borrowers feel not only a duty to pay back but rather receive confidence and inspiration making their small business success. Result, Yunus has turned around the very concept of credit for seed start-ups.

It is this approach of pragmatism, not theory that has caught the attention of NGOs and governments worldwide, now inspiring officials in China, confronting challenges of bringing massive numbers out from poverty. Where the Washington consensus big blackboard theoretic models of free capital flows, sudden privatization and turn-key capital markets intended to “shock therapy” a nation have failed, Yunus has shown many an alternative approach empowering people with more than cash, but newly awakened pride in who they are.

The Nobel Peace Prize normally awarded to pro-western politicians was this year given to an Asian offering an alternative path to Western theory, leading to economic betterment and self pride using simple tools of common sense and Asian values of compassion. Ironically, to this date the World Bank and IMF refuse to recognize the Yunus approach and have no programs offering credit to impoverished insisting instead on facilitating the rich rather than empowering the poor.

To Bangladesh

So by deciding to present Yunus with a Nobel Peace Prize was it a death knoll for the Washington consensus? That seemed to be the feeling at that cocktail reception welcoming Yunus to Beijing. Most were ecstatic, even euphoric. Is it the beginning of maybe a new “Himalayan consensus”? Words inscribed on a bright red banner spread over wreaths of flower arrangements welcoming Yunus to the reception hinted an answer. “There is nothing more powerful than an idea whose time has come.”

I later learned Ashfquar Rahman, Bangladesh Ambassador to China had penned those riveting words. He soon invited me to Bangladesh to visit himself and Professor Yunus who arranged for me to visit village-lending centers in impoverished rural areas. Here women could borrow HK$50 to set up tiny businesses from fish breeding to beetle nut harvesting. Repayment in such small amounts on a weekly basis at the center meetings – which are more like joyful community gatherings with kids attending – are feasible given that amounts are so small rice paddy block and begin self-sufficient farming.

If a family can build up to affording to open a tiny roadside shop, Yunus will provide them with a mobile phone. They can charge for public telephone services with that single phone and become a mini-call center. On the back of micro-credit Yunus offers education loans. So step-by-step a family with support of Grameen Bank will work its way out of poverty and into sustainable business. There is even a program to wean beggars away from begging and into small sales by providing tiny loans allowing them purchase of nuts and packaged foods that they can sell while begging.

Key is empowering people with self-motivation, necessary resources and repossessing their own identity. While such approaches are non-conventional, defying all the textbook formulas for economic development and all the MBA courses on credit and finance, they work.

Returning to Lhasa

I began to apply ideals of Professor Yunus to Shambhala. Founded in 2005, Shambhala is a Hong Kong registered charity, although most of our activities are focused in Tibet where I live and work. Inspired by the Yunus micro-credit model we adopted a similar program called micro-equity, adjusted to local conditions. Micro-equity differs from micro-credit in that we invest instead of lend, becoming ourselves stakeholders in the business which must be connected to cultural preservation through evolution of a sustainable commercial women and handicapped with their own sense of self-pride, identity and accomplishment.

We launched a series of micro-equity enterprises. These range from:

Tibetan Jewellery Revival – re-empowering Tibetans to designing and making their own jewelry.

Save the Tibetan Tiger Rug – is a commune reviving tiger rug making, a replacement art which helped save the Himalayan Tiger; intended also to raise awareness that we can seek replacement solutions for environmental protection;

Tibet Children’s Initiative – Tibetan handicapped people produce puppets of Tibetan animals accompanied by story books to raise children’s awareness of bio-diversity.

Mala Bead Breakfast club – nomad women and nuns are organized to design high fashion prayer beads to support their livelihood.

From this we have spun off a health outreach program establishing clinics in monasteries (with support from Irish Embassy in Beijing), training monks and nuns as medics, reviving Tibetan medicine making within monasteries, establishing nomadic mobile medical clinics (with support from SwissRe) to reach sick in highland areas, and raising funds to campaign against blindness (with partner SEVA).

We have further developed (together with Tharjay Charitable Association) a progressive educational program in a rural school (with support from Montessori Beijing) provides free education to some hundred poor Tibetan children.

Shambhala action initiatives support alternative approaches to development. Without sustainable economic foundations, culture cannot survive and evolve and will instead go into a museum. We do not claim to have any answers. But we do have a lot of questions. In Bangladesh Yunus answered many.

I learned from Yunus how small is beautiful and often more effective than large scale economic growth models based on theories, derived in isolation from local realities. Solve concrete problems, at the grass roots level. Work with actual people and the conditions they must face, dump textbook formulas. A little effort with resources focused in the right place, can dramatically change lives for better.

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