Written by Laurence Brahm - Published by Review Asia on 05/01/2008

“ Credit is a human right.”
- Muhammad Yunus

There is nothing more powerful than an idea whose time has come,” explained former Bangladesh ambassador to China, Ashfquar Rahman, when he first introduced me to Nobel Peace Prize laureate Muhammad Yunus, in late 2006 in Beijing.

Founder of the Grameen Bank in Bangladesh, Yunus pioneered a grassroots credit model based on human trust and not physical collateral.

“I became involved in the poverty issue because poverty was all around me and I could not turn away from it,” Yunus said. “In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly, I felt the emptiness of those theories in the face of crushing hunger and poverty. I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people’s struggle to find the tiniest amounts of money to support their efforts to eke out a living.”

Institutional economics trains one to think in millions and billions of dollars about big infrastructure projects. But for most impoverished people, credit of only US$10 or US$20 can change entire lives.

“I was shocked to discover a woman in the village borrowing less than a dollar from the money-lender, on the condition that he would have the exclusive right to buy all the produces at the price he decides,” Yunus recalled.

“This, to me, was a way of recruiting slave labor. I decided to make a list of the victims of this money-lending in the village next door to our campus. When my list was complete, it had 42 victims who borrowed a total amount of US$27. I was shocked. I offered US$27 out of my own pocket to get these victims out of the clutches of those money-lenders. The excitement that was created among the people by this small action got me further involved in it. If I could make so many people happy with such a tiny amount of money, why shouldn’t I do more of it?”

From this simple approach to reality and human struggle for survival against the odds of abject poverty, Yunus created the concept of micro-credit, becoming “banker to the poor.” It has since revolutionized not only the basic principles of macroeconomics but also the very function that banking should play in human society. Yunus presents a powerful concept by empowering individuals with more than just micro-credit but also with self-esteem and identity.

Yunus invited me to Bangladesh to visit village lending-centers in impoverished rural areas. Women can borrow US$50 to set up tiny businesses, from fish breeding to beetle-nut harvesting. As the amounts are so small, repayments on a weekly basis are feasible. A second loan of US$100 allows a family to purchase a small rice paddy and begin self-sufficient farming.

The key is empowering people with self-motivation, necessary resources and repossession of their own identity. If a family can save to open a tiny roadside shop, Yunus will provide them with a mobile phone. They can charge for public telephone services with that phone and become a small call-center. On the back of micro-credit, Yunus offers education loans. Step by step, a family will work its way out of poverty and into a sustainable business. There is even a program to wean beggars away from begging and into small sales by providing tiny loans allowing them to purchase nuts and packaged foods that they can sell while begging. While such approaches are non-conventional, defying all the textbook formulas for economic development and all the MBA courses on credit and finance, they work.

Where Western theories of free capital flows, sudden privatization and turn-key capital markets have failed to revive developing economies, Yunus demonstrates an alternative approach that empowers people not only with cash but with a newly awakened pride in who they are. Sadly, to this date, the World Bank and International Monetary Fund refuse to recognize the Yunus approach and have no programs offering credit to the impoverished, insisting instead on aiding the rich rather than empowering the poor.

Returning to Lhasa, I began to employ Yunus’ ideals in Tibet, where I live. Through Shambhala, a social enterprise dedicated to action for etnic diversity and cultural sustainable development, we adopted a similar program called micro-equity, adjusted to local conditions. Unlike micro-credit, micro-equity meant we invested instead of lent, becoming ourselves stakeholders in the business. We believe the venture must be connected to cultural preservation through the evolution of a sustainable commercial social enterprise. The emphasis is on empowering marginalized women and the handicapped with their own sense of self-pride, identity and accomplishment.

Inspired by Yunus’ micro-credit model, we launched a series of micro-equity enterprises. After we noticed that most Tibetan-style jewelry on the Lhasa market are imported from Nepal or India, we launched the Tibetan Jewelry Revival project in cooperation with the Embassy of the Kingdom of Netherlands in Beijing. The scheme re-empowered Tibetans designing and making their own jewelry.

The Save the Tibetan Tiger project was in response to the sad fact that most tiger rugs sold in Lhasa are synthetic and made in Beijing or Shanghai. To raise public awareness that we can find replacement solutions for environmental protection, we encouraged the use of natural wools and dyes, in the process reviving the craft among village women. We also helped save the Himalayan tiger, which was almost decimated by the British Raj bounty hunters.

For the Tibet Children’s Initiative, we’re working with the New Zealand Embassy in Beijing to enable handicapped Tibetans to produce puppets of local animals accompanied by storybooks to raise children’s awareness of bio-diversity.

And for the Mala Bead Breakfast Club, we organized marginalized Buddhist nuns – many of whom relied on begging to survive – to help them design high-fashion prayer beads to support their livelihood.

From these projects, we spun off our Himalayan Outreach for Health project with the support of the Irish Embassy in Beijing, establishing clinics in monasteries. With the help of Swiss insurance giant Swiss Re, we trained monks and nuns as medics, reviving Tibetan medicine-making within monasteries and establishing nomadic mobile medical clinics to help the sick in highland areas. And with our partners SEVA, we raised funds to campaign against blindness, normally caused by cataract due to poor access to medical care, bad nutrition and excessive UV sunlight exposure.

With support from Montessori Beijing, we expanded our Give the Children a Chance scheme, which is our progressive educational program for rural schools, providing free education to some 100 poor Tibetan children.

Shambhala's projects support alternative approaches to development. Without sustainable economic foundations, we believe that culture cannot survive and evolve and will instead end up in a museum. Our programs in Tibet can serve as collective models of what can be achieved in diverse ethnic regions both within China and in other countries wrestling with the issue of preserving cultural identity and economic transition. Unlike World Bank and IMF economists, we do not claim to have any answers. But we do have a lot of questions. In Bangladesh, Yunus answered many.

I learned from Yunus that small can be beautiful and is often more effective than complex economic growth models based on theories, derived in isolation from local realities. Solve concrete problems, at the grassroots level. Work with actual people and the conditions they must face. Dump textbook formulas. Returning to Tibet to apply the micro-grassroots approach, I found that a little effort with resources can dramatically change lives for the better.

Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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