Big change starts small
Microfinance pioneer Muhammad Yunus plants seeds of hope in Rice address

BY MIKE WILLIAMS
Rice News staff

Even the smallest kindness can lead to great things, even revolutionary movements.

That message was delivered to Rice University graduates by Bangladeshi economist Muhammad Yunus, who pioneered the concept of microfinance to help the world’s poor lift themselves out of poverty.

	TOMMY LAVERGNE
	Nobel laureate Muhammad Yunus addresses graduates and their families at Rice University’s 97th commencement May 15.

The 2006 Nobel Peace Prize laureate addressed graduates and their families at Rice University’s 97th commencement May 15. Rice awarded 1,582 degrees to 1,532 students, including 752 undergraduate and undergraduate professional degrees and 785 graduate degrees (master’s and Ph.D.).

Though persistent and sometimes heavy rain forced the ceremony indoors this year at Rice’s Tudor Fieldhouse, wisdom also poured as Yunus gave his thoughts on how the world can and must change to eradicate poverty and create opportunities for people, not necessarily through philanthropy but through self-sustaining, nonprofit businesses that serve the greater good.

“I apologize for the weather,” Rice University President David Leebron said. “I take full responsibility. But as one of our trustees told me this morning, rain on a wedding day is a sign of a long and prosperous marriage. So I hope for you, even if you’re not marrying your classmates, that this is a sign of long and prosperous careers.” He thanked Rice faculty who gave up their seats to make room for graduates and parents.

Yunus also noted the weather. “I thought I’d make it more memorable for you by bringing the monsoon from Bangladesh,” said the author of “Creating a World Without Poverty: Social Business and the Future of Capitalism,” who was awarded the Presidential Medal of Freedom by President Barack Obama last year.

Yunus spoke from experience about starting a movement that can change society for the better. After earning his doctorate at Vanderbilt University and a stint at Middle Tennessee State University, he returned to his native Bangladesh in the mid-’70s to teach economics at Chittagong University. His return followed the country’s Liberation War but preceded the famine that caused widespread starvation beginning in 1974.

JEFF FITLOW
Rice President David Leebron welcomes students and their families to the indoor commencement ceremony at Tudor Fieldhouse.

“You don’t feel good when you teach economics in the classroom and tell your students everything about those elegant theories, and you get excited about teaching them — and you walk out … and see people dying of hunger,” Yunus said.

“You question yourself. What good are those theories that do not help the people who are dying? The frustrations take over. You feel this emptiness in your knowledge. It has no use for the circumstances.”

Yunus decided to “become a plain, simple human being” and try to help villagers near the Chittagong campus. “I learned a lot about people in the village and their struggles, at very close range,” he said.

He quickly discovered how loan sharks took advantage of banks’ refusal to lend money to the poor, who basically became their indentured servants. “I was shocked that people have to suffer so much for so little,” he said. His repayment of loans for 42 villagers — a total of $27 — set Yunus on the path that led him to establish Grameen Bank in 1983. The nonprofit bank now has eight million borrowers nationwide, 97 percent of them women, he said. Grameen also provides education loans to 50,000 current students.

“Poverty is created by the system we built,” Yunus argued. He expressed frustration with banks that, then and now, would refuse miniscule loans to the poor because “they are not creditworthy.” Their reasoning was false, he discovered, as the overwhelming majority of Grameen borrowers faithfully repaid their small loans.

Grameen Bank demonstrated that lending money to the poorest in a sustainable way is possible, he said, noting that as the world’s big banks have struggled, micro-credit programs that do not depend on collateral continued to be as strong.

In recent years, he said the bank extended its offerings to beggars. “If a beggar has entrepreneurial ability, maybe that will demonstrate something,” he said, reasoning Bangladeshi beggars who went from door to door seeking handouts might as well carry something to sell – cookies, candy or children’s toys. “‘This is no extra work for you, but it may enhance your options,'” he told them.

Expecting to help several thousand, the bank quickly got more than 100,000 beggars into the program, each starting businesses on typical loans of $12 or $15. He said more than 20,000 have stopped begging completely, becoming successful door-to-door salespeople.

“The remaining 90,000 or so, I would say they are part-time beggars, sometime begging, sometimes selling,” Yunus said. “They tell me very clearly they know which house is good for begging, which house is good for selling. … They have not gone to Harvard Business School, but they know the market segmentation very well.”

Yunus said now is the time to rebuild institutions to address the world’s food, energy, environmental, social and economic crises.

TOMMY LAVERGNE
Rice awarded 1,582 degrees to 1,532 students, including 752 undergraduate and undergraduate professional degrees and 785 graduate degrees.

“Look at the concept of business economists have designed,” he said. “Economists took one piece of human beings, the selfishness of them, and built a whole theory and said, ‘That’s it. Everything is for me and nothing for others.’

“I’m a selfish person, and at the same time I’m a selfless person. They co-exist. I said, ‘Why can’t we build business on the basis of selflessness? Everything’s for others, nothing for me.’ Everybody laughed.”

But Yunus is proving his point by establishing “social business” joint ventures with corporations that bring the means to manufacture food, water, clothing, technology and medical supplies to Bangladesh, which creates jobs as well. As an example, he noted the partnership between Grameen and Dannon to make vitamin- and mineral-fortified yogurt for children and sell it at a price affordable to the poor. “If a child eats two cups of this yogurt every week over a period of eight to nine months, the child gets back all the micronutrients and becomes a healthy, playful child,” he said.

He encouraged Rice students to make their marks.

“You’re a lucky generation, because you start your life with enormous amount of technological support behind you, which our generation didn’t have,” Yunus said. “You can reach out to anybody you want, right away. With your creativity, you can change the whole world.

“Every one of you has the capacity to change the world,” he said. “You are the brightest of your generation, you are the leaders of you generation. What kind of leadership would you like to give to your generation?

“We’re all here on this planet for a very short period. We all like to see that we’ll leave our signature on this planet to tell the world that ‘I was here.’ What will be your signature?

Rice graduate Anna Roberts exemplified Yunus’ argument that individuals can make a difference.

Rice began a tradition last year of giving an award named for the commencement speaker to the graduating student who best exemplifies the speaker’s ideals.

Roberts, who served as student director of Rice’s Women’s Resource Center, was named winner of the Muhammad Yunus Award for Humanitarian Leadership. The Sid Richardson senior majored in history and the study of women, gender and sexuality and spent one summer break on a Loewenstern Fellowship in Brazil, working to stop the cycle of poverty there. (See sidebar.)