Book Review Banker to the Poor by Muhammad Yunus
Muhammad Yunus is a prominent personality and efficient innovator in the scope of effective management and relevant financial issues, as well as in the area of struggling with poverty.
The introduction to the book begins with the following words: “In the year 1974, Bangladesh fell into the grip of famine” (Yunus, 2003, p. viii). The depiction of famine strikes with the bare facts and unbelievable truth when the author describes suffering and silence of the poor. At this turning point, the author realized that all his university activity, profound knowledge, and solid position were nothing in comparison with dread, starvation and horror of death that surrounded him everywhere in the town.
This appeared to be the first reason and the strongest motivation for Muhammad Yunus to think about the urgent necessity of proper and timely alterations within the existing and functioning system.
Muhammad Yunus is famous for being the founder of the Grameen Bank that is known worldwide in the current course of time. The description of Yunus’ life, especially the childhood period, and the set of proper principles and rules he is used to follow, points out that the author of the book has obvious and efficient leading traits and capabilities. He is characterized by his actions and attitudes in the following way: a consistent, promising, talented, and not only clever but a wise person as well. Therefore, the success of the Grameen Bank is a relevant consequence of his stances and vision.
Yunus chose the most complicated, though the most efficient way, to take an insight into the problem of poverty and famine: he learnt directly form the poor in the nearby villages. Consequently, he clarified the basic needs and problems, obstacles and drawbacks of their lives, and saw the only possible solution for that time – a credit. The sum of credit was not big, though inevitably sufficient for the poor.
The first efficient and remarkable step taken by Yunus was to get interested into the phenomenon of poverty as a result of famine: it was the activity at the cognitive level. The second one comprised the fact that he joined the village community to feel himself all grieves and needs of the poor: it was performed on the empirical level. The third step, the most supportive and essential, was the real financial help: it was performed on the level of proper influence and help. Yunus indeed shared his own money with the poor as he had calculated the minimum necessary sum of the credit for one person.
It was a brave and outstanding step; however, it could not work on a large scale and on the constant basis. Therefore, in 1976, Yunus made the decision to approach the local branch of Janata Bank, which appeared to be one of the largest government banks in the area of Bangladesh at the time, and suggested the idea of providing the policy of small loans to the very poor (Yunus, 2003).
This was a wise and consistent option. It demonstrates Yunus’ crucial traits of being a goal-oriented and strategically competent businessman. Janata Bank refused emphasizing great risks and profound doubts in the whole program’s efficiency. Thus, Yunus decided to be an “intermediate part” and guarantee the loans. He shared a profound concern and sincere confidence that the program will succeed in helping the poor. The reason Yunus placed his complete trust in the poor was he believed they knew that credit was “their only opportunity to break out of poverty . . . If they fall afoul of this one loan, they will have lost their one and only chance to get out of the rut” (Yunus, 2003, p. 58).
His vision of the poor’s comprehension of the notion of credit and functioning of the system in general is obviously a sign of sustainability of the future business venture.
The process of certain cooperation with Janata Bank consequently developed into a more serious and consistent business project named Grameen Bank. The author of the book started it without proper education in the field of management.
It will be appropriate to regard the business venture of Grameen Bank in the course of comparison with 7 guiding principles of business sustainability for the leader. The first principle suggests having a vision of the venture as real and paramount. The second one comprises the necessity to take charge. The next two guiding principles include discovering new and proper service to the customers. It is as well obligatory to control the business provided: a person can control himself or herself, and it means to know self properly and coherently. The last two principles comprise the necessity to build relationships and connections constantly and also tell the story every time (Nicholson, 2013).
It is relevant to start the analysis of the sustainability level of the chosen business project by detailing the approach used by its leader as he or she sufficiently predetermines its potential and development.
The first principle has been absolutely followed by Yunus when he started his banking business. Yunus saw his mission as paramount and crucial for the whole community of Bangladesh though it was his initial and locally based vision of Grameen Bank’s function. With the course of time, the idea of the efficiency of loans for the poor has been proved in practice. As a result, the issue acquired more global and widespread value and concern.
Deloitte Development LLC (2010) recommends to “look beyond the obvious.” That is exactly what differentiates the approach and vision of Yunus from the other possible counterparts as, for example, Janata Bank that has refused to forward Yunus’s offer as evidently inefficient.
The second principle may be as well attributed to the strategy of Yunus’ business venture. Actually, he shaped his own vision into the new reality and persuaded many people to believe in it. He provided them with the necessary prism to see it as real and possible – and they managed to see. Moreover, he took the charge and responsibility for every step and decision in the course of business introduction and subsequent functioning.
Yunus discovered a new perspective in the scope of serving people of Bangladesh. He pioneered the system of small loans where everything was efficient and relevant from a strategic, economic, social, as well as financial perspective. The author of the book managed to solve the eternal dilemma. Specifically, he was able to create a proper and effective theoretical background, design a relevant strategy and business plan, and consequently, implement the theory into practice with positive outcomes and efficient prospects for the future development and improvement. Therefore, two more guiding principles of sustainability were properly followed by Yunus.
The fifth principle requires a more profound insight. Yunus was aware of living conditions of the poor, their needs, complaints and subsequent possibilities and capabilities in case they are provided with sufficient opportunities. Thus, he became an ideal leader for Grameen Bank and its clients. He realized the minimum that was necessary for support as well as the minimum the poor could pay back. This amount constituted the sum of $27. The overall sum Yunus paid to the poor was $1,134 as he loaned “to forty-two people living in a tiny village” (Yunus, 2003, p. 295).
The strategy of the banking concept was unequivocally coherent and perspective. Furthermore, it was properly and consistently planned, taking into account all details and potential outcomes.
The sixth guiding principle for obtaining business sustainability comprises the necessity to create or renew relevant relationships. This principle comprises a great variety of contacts and potential relations a person can build: from personal to exclusively business, form official to friendly ones. These contacts may appear to be useful in the course of business venture’s functioning. However, the author of the guiding principles goes even further in the comprehension of this principle as it is obligatory to build all relationships on the proper basis. Such basis comprises credit of trust, sincerity, and respect. These aspects provide a favorable context for further development and improvement of any kind of relations.
One more essential angle of this principle: the connections and relations should be built constantly and efficiently. This is a complicated and permanent work: it is the hardest one as it requires cooperation with people. Therefore, it is recommended to keep in touch and show sincere interest in person’s life. The brightest example may be regarded the attitude of Yunus to his customers. It may be even stated that he demonstrated more concern for his clients than for his employees and students.
The last principle comprises the necessity of the proper legend. Yunus had a true and touching one, with many witnesses involved. Therefore, the story worked even more efficiently since it had been told by different people in different places. In addition, it served for the purposes of relevant image, proper reputation and authority. As a consequence, credit of trust increased and ensured more solid background for the future development.
The entrance test concerning certain threshold for becoming a client of the bank permitted to serve really poor people. This was the initial idea of the banking venture.
The book is persuasive and relevant, though it obviously lacks a detailed description of the operations the bank performed with proper accordance to the apparent commercial rival establishments. This aspect is a crucial one as it reflects the inner essence of the business project. It comprises financial and economic factors, not only social ones as it has been provided by the author.
Thus, business venture initiated by Yunus appeared to be efficient, sustainable, and promising as well. It is grounded by proper strategy and coherent planning. The strategy is relevant as is based not only on the idea or the vision, but also on appropriate calculations and planning. Furthermore, another crucial lesson learnt from the experience of Yunus is to be consistent and goal-oriented. Moreover, the practice proved effectiveness, sustainability, and usefulness of Yunus’ project.
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