18 Feb 2010 dangermaus   » (Journeyer)

On Monday, February 10, I was for working reasons in Milan. In the evening, I randomly walked around the city (following a M sign, thinking it was Mc Donalds, but it was M like Metropolitana, the tube). Close to the Duomo, I read a sign about a conference on micro credit made by Professor Yunus and I remembered reading an article about micro credit in some newspaper (maybe La Repubblica?) ...

I searched for 5 minutes on the map to locate "Teatro dal Verme" where the conference was scheduled and rushed to Castello Sforzesco. In front of the theater there was plenty of police. As I was a little bit late, I decided for the strategy "walk through as you would know where you are headed", because I am equipped with a Swiss army knife and I did not want to be searched and loose the knife and precious time.

The entry was free, I came at the top of the stairs of a huge theater and was very happy to see that what was happening on the stage was projected on the wall, too.

A young girl, Erica Mu, played her song with a guitar using a technique which remembered me of an oscillator where the signal is reinforced by a resonating channel. Then, Paola Turci played her song "Rwanda" which is never broadcasted on the radio, unfortunately. And Paola is a famous Italian singer, too.

A world without poverty

Professor Yunus came on the stage followed by a train of photographers, and explained the principles of micro credit with these words.

"I looked at how a conventional bank works" - he said - " and I did exactly the opposite!" He explained: "First, a conventional bank lends only to rich people, and the richer the more they lend. We lend to the poor people, the poorer, the more we lend. Secondly, a conventional bank lend to men. We lend to women :-)"

He then added "Conventional banks build their buildings in the center of the city, we build our banks in the villages, not in the cities. Customers have to go to the bank, we go to our customers. And conventional banks lend huge amounts of money, we lend only little amounts".

He then recalled a poor woman who received from Yunus 30$ as a credit. She was trembling as she never had touched money in her life. So, she kindly denied, but Yunus insured her that she would pay back only if the eggs of the hen she would buy would give her some kind of return. Yunus soon learned that poor people are honest, they pay back if only they can! (Ehm, just by side as my humble remark: can we say the same of very rich people when they generously decide about their own bonus?)

These principles were the spark to build the Grameen bank, which is a micro credit foundation that helped many Bangladesh people to come out of poverty. With many, we say more than 100 million.

Another fundamental thought in Yunus is that being poor does not mean at all being stupid or less in any way than someone who is rich. In the speech he explained that he was delighted when he met the daughter of a poor woman which had nothing, who managed to become a physician respected by the whole village. Everyone is intelligent and can come out of poverty, if the system does not prevent him to do so.

He extended the concept of micro credit to education and helped students in funding their studies. However, when students finished their education, they came to him and said: "Yunus, unfortunately, there are no jobs where I could apply what I hardly learned!". Yunus explained them, that they should not stand up each morning and think about job seeking, they are powerful enough to think about job giving, to create companies and to create jobs.

In particular, if a student had a good idea, Yunus encouraged him to leave the study and establish his own company. A diploma is a mere piece of paper which gets meaningless if there are no jobs in the economy.

In one of his experiments which keeps running, professor Yunus gave beggars small useful things (like lighters and similar) and asked them instead of begging on the same place, to walk house by house and try to sell these things. Yunus feared beggars did not feel motivated, but he was wrong: they were very happy to act as traveling salesmen. Yunus allowed them to beg in case they were not able to sell anything.

"Funnily enough, as time went by, beggars knew exactly which houses were good to sell things, and which ones were good to beg. Even if they did not own a master degree at Harvard, beggars understood the concept of market segmentation very well!", he added.

In his talk, Yunus criticized the neo-liberal thinking and questioned the principle that being selfish makes everyone richer. This attitude is one of the reasons of the current financial crisis. Yunus believes that being selfish is fine and is related to the instinct of conservation, but it does not have to become a reason of life. Everyone likes to help others and gains positive feelings about it.

In this sense, he called big companies to "social responsibility". With Danone, he created a particular cheap yogurt and marketed it in Bangladesh. A little child that eats for several months this yogurt will not suffer of some of the diseases created by malnutrition. With Adidas, he tries to sell cheap shoes that prevent people to go round barefoot and catch other diseases. These are challenges were profit is not the focus, the focus is something like "create a good cheap shoe for less than 1$". And of course, the image of such responsible companies help them in the conventional economy.

Professor Yunus looks very young for his age, he is 70! And he keeps creating this kind of positive powerful never ending cycles :-)

Finally, an example to say how real the thing might get: I got as a gift for my little child born at the beginning of January a band to carry her around. On the package containing the band, there was a little round stick saying "Grameen Foundation".

Einstein radically upset the way scientists looked at physics, Yunus will radically change the way we understand micro and macroeconomics.

More on Professor Yunus can be found on wikipedia at http://en.wikipedia.org/wiki/Muhammad_Yunus

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