Preserve Grameen Bank And Eradicate Poverty- by Kerry Kennedy
Today’s interconnected, technologically-driven world has given us creative solutions to many social problems. But in the fight against poverty, real innovations can be hard to spot, because they often begin with the smallest steps.
Grameen Bank started with one such step. Nobel Peace Prize Laureate Muhammad Yunus told Chicago public school students the story of starting Grameen during the Robert F. Kennedy Center for Justice and Human Rights’ Speak Truth to Power series—he made a meager $27 loan out of his own pocket to 42 women selling baskets in a market in Jobra, Bangladesh.
Yunus's idea—to give people the means to build their way out of poverty—resonates because it touches on a simple truth: Each of us has the power to change the world, and each of us has a responsibility to try.
My father, Robert Kennedy, knew and believed in this truth. So do Grameen’s eight million borrowers, scattered across 80,000 villages in Bangladesh.Grameen Bank has lent out more than $8.3 billion to the poorest people in the country, giving them the opportunity to start or grow their own businesses without resorting to predatory loan sharks. Women make up 97 percent of bank borrowers and have proven to have a unique ability to lead their families out of poverty.
The bank requires no credit history and no collateral. It doesn’t take people to court when they’re late on their loans, and it doesn’t seize their property. And despite that, it has recovered roughly 97 percent of the funds lent out in roughly three decades of operation.
The secret is its independence and focus on self-empowerment, particularly among women. Grameen is run by its borrowers, who elect nine of their own—currently all women—to serve on the bank’s board of directors. They lead the bank’s efforts to create sustainable, meaningful change through microlending and have led the bank to many accolades, including the Nobel Peace Prize in 2006.
Over time, the bank’s managers found that women could make the most of the loans in a way that engaged their communities. They managed the household and made purchasing decisions for their families. They made good financial decisions, saved more money, and were better able to pay back their loans.
These same women were turned away from traditional banks and told that they were too poor, or that only their husbands could take out loans in their name. At Grameen, they can stand up for their own interests.
Despite these benefits, Grameen Bank and its borrower-shareholders are at risk.
The Bangladeshi government created a commission last year to investigate Grameen Bank. A few months ago, it recommended that the government kick the women borrowers off the bank’s board, replace them with government officials, and disenfranchise more than five million of the bank’s shareholders. Recently, it recommended that the government take a majority of the bank’s shares, compared to the three percent it currently holds, or break it into 19 different entities. A final report to the Government is due any day.
The savings and deposits of women borrowers make up the bulk of the bank’s capital. These funds finance the bank’s lending activities and truly make Grameen the bank of the poor. Their stake in the bank has to be preserved. The bank cannot be successful without it. It’s no wonder that the nine women directors of the bank said of the commission’s recommendations: “We will never allow our beloved organization [to be] snatched away from us.”
Prime Minister Sheikh Hasina, a woman of accomplishment in her own right, has a strong record of working to improve the well-being of her people and knows the particular challenges facing women in Bangladesh. She also has the authority to refuse the Commission’s recommendations.
Last week, I joined 40 international leaders in an open letter urging Prime Minister Hasinato reject any effort by the Commission to injure Grameen and the Bangladeshi people. As a human rights advocate, I reiterate my support to keep the current structure of the Grameen Bank so that it continues to bring hope, dignity and equality to the people it serves. The Committee’s recommendations would rob these women of these rights. It is my sincere hope that Prime Minister Hasina responds accordingly.
Kerry Kennedy, President, Robert F. Kennedy Center for Justice & Human Rights.