Can Technology Eliminate Poverty?
Grameen Bank Founder Muhammad Yunus thinks so. And he
explains why changing the world is a lot more fun than
just making money
As a leading microfinance pioneer and advocate for
the world's poor, Muhammad Yunus has continued
developing innovative approaches to alleviating poverty
since granting his first loan in 1976. Since 1983,
Grameen Bank, of which Yunus is founder and managing
director, has lent $5.3 billion to borrowers in
Bangladesh, spawning replicated programs in more than
Even as his ideas spread around the world, Yunus has
remained firmly dedicated to alleviating the burden of
poverty in his home country through a growing variety of
means. For example, in 1997, Yunus helped found two
companies: GrameenPhone (for profit) and Grameen Telecom
(nonprofit), which brought mobile-phone technology to
the villages of Bangladesh. Out of those companies Yunus
developed the Village Phone Project, where women
borrowers would take a loan to buy a handset and
solar-powered charger and function as their village pay
phone, providing the women with substantially increased
Yunus recently spoke with BusinessWeek Online
reporter Jeffrey Gangemi about his purpose in life, how
technology can be used for ramping up microfinance, and
his next challenge in helping the poor. Edited excerpts
of their conversation follow:
How would you describe yourself?
Sometimes I describe myself as a stubborn guy. If I
feel in my gut that something is the right thing to do,
I do not give it up. Every time I try to do something,
people say it can't work. People said GrameenPhone
wouldn't work, that people in the villages have no money
to pay for it, and that they will be scared to death if
a voice speaks to them through that little gadget.
Grameen Bank was officially founded in 1983,
though you started making loans in 1976. Why did you
My mission is to create a poverty-free world. I
believe that human beings are created to contribute to
all other life forms, including their own. But poor
people too often spend their lifetime just taking care
of themselves because the struggle has been so hard for
them. I strongly believe in the unlimited potential of
all human beings, not just a privileged few. All kids,
when they're born, represent the same unlimited
potential in any circumstance.
Poverty is absolutely meaningless and unnecessary in
the world. It was just indifference to poverty that
created and sustained it. It's not created by the poor.
It's created by the system. Once we fix the system in
the right way, poverty will disappear.
I'm encouraging young people to become social
business entrepreneurs and contribute to the world,
rather than just making money. Making money is no fun.
Contributing to and changing the world is a lot more
Why do you target the poorest of the poor?
I get very upset when people say [the poorest]
people don't have the entrepreneurial ability,
initiative, and skills to use loans, so they need some
other kind of intervention like subsidy, handout, or
To prove them wrong, I said "let's exclusively reach
out to the poorest, and who could be poorer than the
beggars?" So we started the beggars program, called the
Struggling Members Program. When we started, we thought
maybe we'd have 4,000 or 5,000 beggars in that program.
Now we have 55,000 beggars in that program just in
Bangladesh and just in Grameen Bank. Instead of begging
door-to-door, the loan allows them to buy some ribbons
or some candy and sell it door-to-door.
How far has the Village Phone Project spread?
Now, there are nearly 200,000 telephone ladies all
over Bangladesh, and that number keeps increasing. So
state-of-the-art mobile technology has reached the very
poor people, and it's a very good source of income for
them. If a poor woman gets hold of one mobile phone in
the village, then this is a sure bet that her entire
family can move out of poverty in two or three years.
Friends or enemies, critics and admirers across the
board all admire Village Phone because it has brought
telephone connectivity everywhere in Bangladesh, not
just in the cities.
What other doors has the Village Phone Project
We are moving toward widespread Internet
connectivity and toward automatic remittances of money
through telephones. Kiosks are being set up for Internet
connectivity -- very few so far, but it is possible.
When we took the mobile phone to the villages, 70% of
people didn't have electricity. To charge the phones, we
decided to use solar energy, and it has now become very
popular in Bangladesh. We created a whole separate
company called Grameen Shakti [Energy] that sells solar
panels and other renewable energy sources across the
country. This is probably the largest commercial solar
energy distribution company in the whole world, because
it sells 1,500 solar-energy home systems per month on a
commercial basis. It's a for-profit business, and it
works very well without subsidies.
What's your motivation for continuous innovation?
I'm not a salesman of microcredit. My patient is
poverty. If microcredit does not work for poverty, I
have no business with it. I feel that it has an
important contribution to make, but I'm not going to
stop here. I've got to find every single piece that
works for poverty alleviation. I'm not promising that
every business will be as successful as everything else,
but I'll keep trying.
Which technologies are most important for scaling up
microfinance? Everything -- it's a question of how you
bring it into use with poor people. The technology is
moving very fast, so the possibility of creating a
poverty-free world is so much higher now than a few
years ago. The smart card and the ATM can be very
effective, but today the ATM is developed for city
What's the newest Grameen company?
We just completed a deal with the French company
Group Danone to set up a food company in Bangladesh. It
will be called Grameen Danone Food Co. We have a need
for healthy baby food, because children born to poor
families often become sick as soon as they stop sucking
their mothers milk. I talked to Group Danone, who were
very interested and willing to work with us. We are
making a good formula that is extremely cheap so that
poor people can afford to buy it and feed their
children. Together, we'll also process and market milk
products and eventually fruit items.
What are your biggest successes? At first, I didn't
think that what I did had any significance in a broader
context. I was just trying to solve a local problem.
But…Grameen has been adopted in hundreds of countries
all around the world -- rich and poor alike.
Today, there are many different variations of
microcredit. But I'm glad that it's drawing attention.
In Bangladesh, where nothing works and there's no
electricity, microcredit works like clockwork. It's
Where is microcredit most widespread?
The hub of microcredit is Bangladesh and Asia. Of
the nearly 100 million families that have been served by
microcredit, nearly 90 million are in Asia. When you
look at Latin America, on the other hand, there might be
5 million families served.
In Latin America, most of the microcredit programs
are donor-driven. USAID and other organizations fund
them, and that's how they came into being. Asian
microcredit banks were NGO-driven, which helped them
become more sustainable.
What's your next big mission? I'll address health
care in a very comprehensive way. We're creating a
series of hospitals for eye care, for the cataract
operation. Along with hospitals, we'll establish safe
delivery units to help mothers deliver their babies
Also, telemedicine with videoconferencing has
started. It's not very successful yet, because people
don't know how to make use of it. Someone in a rural
area can go to a kiosk and have a consultation with a
doctor in Dhaka instead of coming all the way to Dhaka
for the consultation.
These will all be for-profit enterprises, but in the
social profit way. No one will be getting rich off of
them. I call them non-loss companies.
Do you think you'll go into politics someday?
I don't know. I've thought about it because people
keep asking me that question. In politics, everyone says
they will support you, but you never know. I don't want
to take that chance. I think what I'm doing is so much
more effective, steady, and successful than being in