What is the Grameen system?
It provides financial services to the poorest people, particularly focusing on women, without any collateral, for income-generating activity. Groups of five people, mainly women, are formed, who then go through a short financial training course. Each borrower gets a loan to start or expand their small business. They then receive further financial advice, training and support as repayments are made. After full repayment, borrowers can apply for another loan so their businesses can continue to grow. The loans are typically used to finance social businesses, such as lunch clubs, laundries and cafes.
What does Grameen mean?
Village.
Was there anything in your own education that influenced your thinking or led to the development of this system?
As you grow up, you are influenced by many things and you process them in your own way. If you are looking for a specific influence on my work it would be hard to say, except that within my family it would be my mother. She was very kind and supportive of women. We were not a well-off family - we were a low-income family.
Youth unemployment is a major issue just now - do you have a message for young people who feel they have no prospects?
This generation of young people is very fortunate - no matter where you live, what kind of family you come from, what kind of income situation you are in. Because you are endowed with enormous technology which other generations didn’t have, this generation is the most powerful generation in human history. Don’t look at the older generation; they are no guide for you, because you are a completely different breed. You can be a jobseeker but you can also be a job-giver. Don’t think that jobseeking is the only option for you.
Why did you choose Glasgow as the first Grameen venture in the UK?
I didn’t choose anything - it’s all because of Pamela Gillies (principal of Glasgow Caledonian University). She is a powerhouse and she uses her convening power very well. She banged at every single door and brought everyone together.
The banking profession has never had such a bad reputation as currently - what can the Grameen Bank teach it?
We insist that the banking system should be designed as an inclusive system. The system has no right to reject anyone. Today, the financial system is like an exclusive club of privileged people - and that’s where all the problems come from, because you circle round, serving these people, and gradually you are moving away from the real economy. The real people are outside - those who toil with their hands to make a living.
Will Grameen in Scotland focus solely on women?
Yes - our microcredit focus is always on women because they are at the worst end of society, so unless you address that, you have not proven your worth. If you start the old routine again, man takes care of everything and that’s a bad routine. So you change that routine like you change the banking system and also push it down to where it’s never reached before.
How do you break the cycle of welfare dependency among women?
It should be the woman’s decision, not a government decision, to drop out of welfare. Give her space so that she can come to a level where she says, ‘I don’t need you.’
And have you persuaded policymakers, for example in America, to institute that kind of approach?
They are sympathetic to it and are doing it on a case-by-case basis, but they are cautious about making a fundamental change in welfare law. They are waiting for more evidence, because welfare law is very sensitive law - you can turn many of your voters off by doing something with welfare law.
Many people in deprivation feel they are in a hole - how do you help them to create the ideas for their own enterprises?
When you’re alone, isolated, in despair, you overestimate your own despair. But when you sit in a group with your own kind of people, you start to say, “I’m lucky, I’m not like her.” And they talk about their ideas and feel “I can do better than that”, because it’s coming from their kind, not from somebody else from college or university. That personal pride in her own thing takes her to the next stage. Our whole effort is to build that personal pride.
Are there particular skills you think that young people should be taught?
We are not at the beginning talking about new skills. Our first effort is to use your existing skill. You have enormous skill, no matter who you are. People are always being told, “You have no skill - that’s why you are so poor.” They are told to go to college or some training institute to get a skill - that is something for later. We have proven again and again that if you just go to people, you find they have enormous skills which they have just hidden from themselves.
Do you foresee an end to the world recession?
Yes - because people will wise up. The short-term solution will only take you back to the old track, which will take you to the same hole. We have to have a fundamental overhaul of the system. That’s possible just now because of the enormous power that technology gives us.
PERSONAL PROFILE
Born: Chittagong, Bangladesh, 1940
Education: Primarysecondary in Chittagong; Chittagong University; master’s in economics at the University of Dhaka; PhD at Vanderbilt University, US
Career: Professor of economics, developed the concepts of microcredit and microfinance - loans given to entrepreneurs too poor to qualify for traditional bank loans; in 2006, received the Nobel Peace Prize for the Grameen Bank’s work in creating economic and social development “from below”.
