Friday, January 23, 2009

$27 that Changed the World

Have you heard about microfinancing? Do you know about the "banker of the poor?"

"Sometimes, a small amount of seed money is all it takes to break the cycle of poverty. The growing microfinance movement is planting seeds of health and financial independence around the world, and both borrowers and investors are reaping the benefits. "

"In the early 1970s, a young economics professor returned to his native Bangladesh after earning a degree at Vanderbilt University on a Fulbright scholarship. The professor, whose name was Muhammad Yunus, soon found a teaching position in the port city he’d grown up in, at Chittagong University. But beyond the city limits, a famine was sweeping the countryside. The elegant theories of his textbooks, Yunus discovered, seemed increasingly irrelevant next to the widespread desperation of the poor. "

"In search of a better understanding of what was happening, Yunus ventured into a nearby village, where he met women surviving on the profits from bamboo stools, which they made and sold for pennies a day. Their profits could be greatly increased, they told him, if they were not indebted to the local lender, who loaned them the money to buy their supplies and also bought their finished stools at a set price. "

"To help the women pay off their debts and buy a supply of their own materials, Yunus loaned 42 villagers a total of $27. No longer in debt to the lender and able to sell their stools to the highest bidder, the women increased their daily profits from a few cents to more than a dollar."

Read more of this story and the larger project:

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