Muhammad Yunus styles himself as the “banker to the poor”. The founder of Grameen Bank, a microcredit outfit that now has 26,000 staff in his native Bangladesh, Yunus has been responsible for lending more than $9bn (€7bn) to more than eight million borrowers, the vast majority of whom are women.
At a time when the global banking sector is in crisis, Yunus believes his method of making small, manageable loans to poor women can work in the western world too. Branches of the Grameen Bank have already opened in Brooklyn and Omaha and later this year he will launch a version in Scotland and San Francisco.
“It can work in the remotest jungle or the city centre of London,” he says when he meets Monocle in Nairobi. “People are people. They need money to get ahead with their life. But no one will give them that money. We do.”
Yunus’s achievements in Bangladesh won him the Nobel Peace Prize in 2006 and he has used the higher international profile the prize has given him to argue forcefully for changes to the way banking works across the world. Despite calling his organisation a bank, Yunus is not able to accept deposits, relying instead on philanthropists to provide the start-up capital for each new operation. “They have made it easy for the loan sharks but not easy for those who actually want to help,” he argues.
A Scottish billionaire, Tom Hunter, has donated a six-figure sum to fund the initial stages of the Glasgow programme. Scotland’s largest city is an obvious choice for Grameen. Unemployment in the eastern Glasgow is 7.5 per cent and thousands of families, Yunus says, are in the third generation of unemployment.
“Society has been feeling the pinch of death,” Yunus says, and no ordinary bank is prepared to help. “We don’t worry about people who need a tiny £1,000 to make a living. We leave it to the loan sharks. This is what happens in a screwed-up financial system.”
Western welfare systems exacerbate the problem, he argues. “If you are on welfare in the US and you earn $1 in a month that money will be deducted from your welfare cheque. Who in their sane mind would want to earn anything? If I was designing this welfare law I would require the government to match that $1 so there is an incentive to earn.”
The programme in New York, which has been running for two years, has been successful. Grameen has nearly 3,000 borrowers in Jacksonville and Brooklyn. The average loan is $1,500 and the repayment rate is higher than 99 per cent. Yunus hopes his new programmes in San Francisco and Glasgow will show similar results and is open to starting up additional branches across Europe and the US.
There is only one problem with operating in the West. Each branch of Grameen needs to be run by one of Yunus’s experienced Bangladeshi staff. “Getting work permits for people from Bangladesh is a big hassle,” he says.