WRR@LARGE

Joy E. Stocke

“One has to be very stubborn to build a company and start from zero.”
Dr. Muhammad Yunus, speaking to Ecuadorian microlending organizers in Quito.

by Joy E. Stocke

What is clear on the first day of Professor and Economist Muhammad Yunus's visit to Ecuador is that his message is simple: Shifting consciousness to create a sustainable world where poverty no longer exists is not only a priorty, but a moral duty.

Dr. Yunus's solution is microfinance: Helping the world's poorest people escape poverty by giving them collateral-free loans and other financial services to support income-generating businesses. As each loan is repaid, the money is redistributed as loans to others, thereby mulitiplying its impact.

Galvanized by what he saw as a deep chasm between those who have access to credit and those who do not, Yunus made his first loan in the village of Jobra in his native Bangladesh with 27 dollars from his own pocket.

Yunus and Grameen Bank, which he founded in 1983, operate on a revolutionary philosophy: Grameen Bank does not require any collateral against micro-loans and does not require borrowers to sign any legal document.

More than 95 percent of loans are to women with no collateral and who have never had access to credit. The banking industry is set up to lend money to people who already have money, but contrary to naysayers, nearly all of the women who have received loans have paid them back week after week in small, steady increments. (More on Grameen's philosophy about accountability in a future blog.)

The question that Wild River Review poses regarding microfinance also explains the reason we're here: How can wealthy, developed nations understand true poverty? Why does it matter? And what can we do about it?

We begin in a conference room at the Swisshotel, where according to representatives of Red Grameen, Ecuador - a cooperative of microlenders modeled on Yunus's Grameen Bank - thirty-eight percent of Ecuauadorian people are at the poverty level. Twelve percent are at the extreme poverty level. Red Grameen is working against serious odds to change that. (More on that when Wild River accompanies Dr. Yunus to visit the President of Ecuador.)

Quito lies about 15 miles (24 kilometres) south of the Equator in the spectacuar Andes Mountains where the play of shadow and light and sun and cloud can mesmerize first-time visitors. It's easy to get lost in the highlands where shades of green become so gorgeous you grow hungry just looking at them. This luxurious landscape is also home to the world's largest rose-growing industry.

One example of Red Grameen's progress can be seen in the rose industry. Most roses that we, in the north, buy during the holiday season and into the new year, come from tracts of land with greenhouses situated in the valleys surrounding Quito. Pesticide use is heavy and workers who handle pesticides face serious health risks.

Yet, the markets for roses, such as the U.S market, depend on a steady supply of perfect long-stemmed roses and very low prices. Neighborhood supermarkets and florists seek the lowest prices at the highest volume. So what's a small country to do? Pay substandard wages. Allow pesticide runoff that flows into the numerous streams that course through the gorges of mountain passes. Look the other way when workers develop rashes or get cancer.

One of Red Grameen's programs uses micro-loans to allow those below the poverty level to get financing to grow pesticide-free roses. Dr. Yunus is here to help the organizers expand their program (which encompasses other industries as well) and develop long term goals.

What remains daunting is the fact that banks run on a for-profit, bottom-line model. And governments often get in the way of what, in effect, works like a Mom and Pop operation, where, loans of less than 100 dollars, sometimes much less are given to people who have no assets. In other words unsecured credit. Except that nearly all the people who receive loans from Grameen repay their debts and reinvest in their communities.

Where Yunus more than earned his Nobel Prize is in his unwavering belief that if you help the rural poor, especially women who do most of the day-to-day work in addition to bearing and raising children, you empower them to create a stronger community.

Yunus, who calmly and generously navigates between the people "on the street" and those who live "in their ivory towers," touches both deeply. In his ability to show empathy at all levels, and his willingness to share his expertise in economics, those around him are motivated to do work they might not have believed they could do, to act on a single goal of eradicating world poverty.

by Joy E. Stocke