|
VOLUME 22
|
|
|
Welcome to this month's The Mark of a Leader E-zine. January and February have been record months for our corporate conference program. Fortune 500 clients all over North America are discovering that there is a great alternative to yet another athlete, celebrity, or motivational speaker at their events. It is not only the power of our stories that is resonating. They are telling us that the secret sauce of The Mark of a Leader is how it ties their messages together so that the audience is left very clear on the key messages and expectations from the conference. All right! Thanks to all of our new clients, including AGI, Bank of America, Cascades Tissues, Coca-Cola, Sobeys, and Unilever! We're also thrilled that the school program will kickoff in April, with our first high school audiences. As you may know, bringing the power of The Mark of a Leader to schools is a key priority, and we're looking forward to presenting some powerful role models for younger audiences. If you haven't been to our Blog yet, please visit and give us your comments. We're at http://blog.themarkofaleader.com. This month's story is a wonderful example of thinking differently - taking an old problem and finding a fresh solution. And it is changing the world. We hope you enjoy the story of Muhammad Yunus and Grameen Bank. All the best
Please visit our website at www.themarkofaleader.com |
|
|
FEATURE
|
|
|
QUOTABLE QUOTES Gardens are not made by singing "Oh, how beautiful," and sitting in the shade. Rudyard Kipling |
Muhammad Yunus and Grameen Bank - Changing the World $1 at a time
How long would it take you to turn $27 into $6 billion? In 1976, the Bangladesh-born economics professor loaned a small group of entrepreneurial women in his native country $27 out of his pocket. The women had a small bamboo furniture business. Because they were high risk and had no collateral, banks would not touch them. But in order to buy bamboo and supplies, they had to take out high-interest loans from money lenders. The loans were so expensive that it was impossible for them to be profitable and support their families. $27 was enough for them to turn around their business, and it showed Yunus that small amounts of money could make a disproportionate difference to very poor people. 
Seeing the power and opportunity from this simple act, he opened the Grameen (meaning "of village") Bank Project to offer "micro credit" on a larger scale. It grew and grew, as thousands and then tens of thousands of people took advantage of small loans, built businesses, and dragged themselves and their families out of the cycle of poverty. 1983 it became an officially government sanctioned bank - the Grameen Bank. Micro credit is an amazingly simple approach to lending and ending poverty. Relying on their traditional skills and entrepreneurial instincts, borrowers, mostly women, use tiny loans (usually less than US$200), to start, establish, sustain, or expand very small, self-supporting businesses. |
|
QUOTABLE QUOTES I make more mistakes than anyone else I know... and sooner or later, I patent most of them. Thomas Edison |
Astoundingly, in exchange for the loan, Grameen asks for no collateral, and no legal contracts are signed between lender and borrower. A bank that funds untested and impoverished entrepreneurs based solely on the honor system? Exactly. 
Applicants must belong to a five-person group, whose members support each other in repaying their loans and running their businesses. But again there are no guarantees. Repayment responsibility lies solely with the individual borrower, while the group ensures that everyone behaves in a responsible way and no one gets into repayment problem. In addition, regional Micro Finance Institutions oversee the groups and provide other financial services like insurance and savings, give advice, and assist clients in solving some of the life challenges they may face. Sound idealistic? It is. 
Surely, with no collateral, no penalties and no legal contract, these "honor system" loans must have exceptionally high default rates, right? Yup. One percent. You read it right folks. The repayment rate for loans is 99% - a number that any traditional bank with its three-inch contracts and buildings full of lawyers would die to have. Maybe the secret is that 97% of the loans go to women, who suffer disproportionately from poverty and who, the bank says, are more likely than men to devote their earnings to their families. Maybe the secret is the local support groups so that when things go bad, which they invariably do, there is help right nearby. Whatever it is, the success rate is staggering given the financial circumstances into which the loans are given - the world's poorest people. |
|
QUOTABLE QUOTES When given the opportunity to take charge, take charge and then do what's right. General Norman Schwarzkopf |
To date the Grameen Bank has issued more than US$ 6 billion to 6.9 million borrowers. And while that may only be making a dent in global poverty, it is an impressive dent. And what happens to all the interest? It is recycled in the system. As each loan is repaid - usually within six months to a year - the money is used for another loan, thus multiplying the value of each dollar in defeating global poverty, and changing lives and communities. Equally astounding is the effectiveness of its recycling and "honor system". Funded originally by donors, Grameen is now completely self-funding, having refused donations for over a decade. The reasonable interest on loans and deposits provides enough for profit and to fund new loans. 
And as the coupe de grace, today the members of Grameen Bank - its entrepreneurial women borrowers - own 94% of the bank. The remaining 6% is owned by the Government of Bangladesh. The success of the Grameen model has inspired similar efforts in 23 countries throughout the developing world and even in industrialized nations, including the United States. |
|
QUOTABLE QUOTES So what do we do? Anything - something. So long as we just don't sit there. If we screw it up, start over. Try something else. If we wait until we've satisfied all the uncertainties, it may be too late. Lee Iacocca |
In 2006, Muhammad Yunus and Grameen Bank shared the Nobel Peace prize for, as the Nobel committee put it, "their efforts to create economic and social development from below". The award further said: "Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights. "Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world. "Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development." 
Like Bob Geldof, Mother Teresa, Médicins Sans Frontières and every great activist before him, Muhammad Yunus has shown us again that even small ideas - small gestures - when consistently applied can make a huge difference. But what I like most about this man and his indelible mark is that he is changing the world with a simple idea based on the honor system. And he is showing us that despite what we may see in the news every day, when given the choice, a huge part of Planet Earth will work hard and do the right thing. And that's incredibly comforting to me. |
|
|
|
|
Please visit us at www.themarkofaleader.com. Copyright 2007 Mark of a Leader |
|