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Banker to The Poor By: Muhammad Yunus

Banker to The Poor By: Muhammad Yunus. Group I. Agenda. Overview Author Book Ethical Issues Critique Personal Perspective Recommendation. Author. An economist from Bangladesh Chairman of the economics department at Chittagong University Inventor of Micro-credits

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Banker to The Poor By: Muhammad Yunus

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  1. Banker to The PoorBy: Muhammad Yunus Group I

  2. Agenda • Overview • Author • Book • Ethical Issues • Critique • Personal Perspective • Recommendation

  3. Author • An economist from Bangladesh • Chairman of the economics department at Chittagong University • Inventor of Micro-credits • Founder of Grameen Bank • Noble Peace Prize Winner • Aspires to create social business

  4. Book Overview • An autobiography about his life and how he formed the Grameen Bank • What influenced him? • His concept of micro lending • Importance of working women • Growth and challenges for the bank • And what it has achieved till date

  5. Continued… • Most essential decade was 1970s • Bangladesh won its independence • But left the country in Famine • Millions of people needed to be rehabilitated • Yunus was stricken by the amount of poverty • He desperately wanted to change it. • He initiated projects to aid the farmers

  6. DifferentiatingPoorestfrom the Poor • Farmers were not the poorest • Poorest of the poor had • No land • Food • Clothes • Source of income • Mostly women with kids • If not helped, they would die

  7. A New Form of Bank • Sufiya Begum • The inspiration for Grameen Bank • Loan sharks • Ate up the profit in terms of huge interest • Birth of Grameen Bank • Grant small loans at decent interest rate • Without any collateral • Mostly for women • Based on trust and good faith

  8. Grameen Bank Success • In 1976 • Only a small single hut • Students work as volunteers • Number of borrowers = 42 women • According to the book, it has now • 1,181 branches • 11,777 employees • Total Loans given $174.78 billion • 98% repaid • 95% borrowers are women • Over 250 institutions around the world operate micro-credit programs based on Grameen

  9. Ethical Issues • Inequality • Women treated unfairly • Regular Banks not allowing poor people to borrow • No collateral • Illiterate • Moral rights vs. religious rights (women) • i.e. women are not allowed to work outside

  10. Ethical Issues Contd. • Multilateral Aid Institutions • Aiding countries with the biggest price tag • Move up the promotion ladder • Corrupted officials • Government, suppliers, consultants • Corporate Social Responsibility • All businesses want money • No one wants the betterment of society

  11. Critique • Book Quality • mostly focuses on micro-credit and the Grameen Bank • well-written • a subtle arrogance exists • quality is derived from the content

  12. Critique Contd. • His points: • Well argued and effective • Uses individual examples • Uses statistics to better grasp the context • Contribution to the field • It “is” the field to micro lending • Relations with World leaders ensure field development

  13. Critique Contd. • Raises the question of whether micro-lending is applicable in first world countries. • In a sense his goal is the opposite of “trickle down theory” • Gives “short shrift” to issues such as GDP and overpopulation

  14. Personal Prospective • Establishment of the Bank • Utilitarianism • Competition • Ownership of the Bank

  15. Establishment of the Bank Government The government bears responsibility for its failure to keep the market fair.

  16. Utilitarianism • An action is right if it tends to produce, the greatest amount of good for the greatest number of people.

  17. Competition • Competition tends to produce efficiency in the market and benefits the general consumer by resulting in a variety of goods at the best prices.

  18. Ownership • Government control would not be good for bank’s development

  19. Possible Improvements • Explaining how his theory negates traditional economic theory • Is micro lending “one size fits all”? • More technical and less optimistic approach • Include organizational structure and balance sheets • Is it possible for normal banks to micro lend? • If so? How?

  20. Thank YouQuestion or Comments

  21. References • Picture of Mr. Yunus (slide 3) • http://www.speakers.com/media/2012/images/yunus-muhammad-bio09.jpg • Title Page • http://thelemonaideguide.com/lemonaideblog/wp-content/uploads/2010/05/capitol-vs-finance.jpg • Book pic • http://covers.openlibrary.org/w/id/1468840-L.jpg

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