Commencement Address by Muhammad Yunus
Monday, June 9, 2008
Below is the prepared text of the Commencement address by Muhammad Yunus, winner of the 2006 Nobel Peace Prize, for MIT’s 142nd Commencement held June 6, 2008.
It as a very special privilege for me to speak at the commencement ceremony of this prestigious institution.
What a wonderful feeling to be here today. To be with all of you, some of the brightest minds in the world, right at a moment when you decide the path you will embark on in life. You represent the future of the world. The choices that you will make for yourself will decide the fate of mankind. This is how it has always been. Sometimes we are aware of it, most of the time we are not. I hope you’ll remain aware of it and make an effort to be remembered not simply as a creative generation but as a socially-conscious creative generation. Try it.
I had no idea whether my life would someday be relevant to anyone else’s. But in the mid-seventies, out of frustration with the terrible economic situation in Bangladesh I decided to see if I could make myself useful to one poor person a day in the village next door to the university campus where I was teaching. I found myself in an unfamiliar situation. Out of necessity I had to find a way out. Since I did not have a road-map, I had to fall back on my basic instinct to do that. At any moment I could have withdrawn myself from my unknown path, but I did not. I stubbornly went on to find my own way. Luckily, at the end, I found it. That was microcredit and Grameen Bank.
Now, in hindsight, I can joke about it. When people ask me, “How did you figure out all the rules and procedures that is now known as Grameen system ?” My answer is : “That was very simple and easy. Whenever I needed a rule or a procedure in our work, I just looked at the conventional banks to see what they do in a similar situation. Once I learned what they did, I just did the opposite. That’s how I got our rules. Conventional banks go to the rich, we go to the poor; their rule is — “the more you have, the more you get.” So our rule became — “the less you have higher attention you get. If you have nothing, you get the highest priority.” They ask for collateral, we abandoned it, as if we had never heard of it. They need lawyers in their business, we don’t. No lawyer is involved in any of our loan transactions. They are owned by the rich, ours is owned by the poorest, the poorest women to boot. I can go on adding more to this list to show how Grameen does things quite the opposite way.
Was it really a systematic policy ? to do it the opposite way ? No, it wasn’t. But that’s how it turned out ultimately, because our objective was different. I had not even noticed it until a senior banker admonished me by saying : Dr. Yunus, you are trying to put the banking system upside down.” I quickly agreed with him. I said : “Yes, because the banking system is standing on its head.”
I could not miss seeing the ruthlessness of moneylenders in the village. First I lent the money to replace the loan-sharks. Then I went to the local bank to request them to lend money to the poor. They refused.
After months of deadlock I persuaded them by offering myself as a guarantor. This is how microcredit was born in 1976. Today Grameen Bank lends money to 7.5 million borrowers, 97 per cent women. They own the bank. The bank has lent out over $ 7.0 billion in Bangladesh over the years. Globally 130 million poor families receive microcredit. Even then banks have not changed much. They do not mind writing off a trillion dollars in a sub-prime crisis, but they still stay away from lending US $ 100 to a poor woman despite the fact such loans have near 100 per cent repayment record globally.