business

GAZIPUR DISTRICT, BANGLADESH -- Dilwara Begum's story used to be the stuff of disaster relief posters: one of millions fleeing famine one year, floods the next but never escaping the grinding poverty of a land Henry Kissinger once called the world's "basket case."

Today this thirtysomething mother of three runs a thriving poultry business from her rural home and she's an icon for the Grameen Bank.

Grameen (meaning "village") is easily the most successful among a myriad of poverty relief programs, a home-grown idea that's been widely copied here and exported across the world, including Minnesota.

Founded 24 years ago by a disgruntled economics professor with $27, this unlikely financial institution has loaned about $2 billion to about 2.4 million Bangladeshi borrowers.

The vast majority are women, illiterate and, at least when they applied, living in near-medieval poverty -- not exactly the risk profile to whet a banker's appetite. The typical loan amount is about $100. Yet Grameen is not a charity, according to founder and managing director Muhammad Yunus.

"It is a business," he insists, citing two salient figures: Grameen charges its borrowers a hefty 20 percent, yet 98 percent of the loans are repaid on time.

The notion that poor people can make a sound investment came to Yunus in 1974. He had returned home, eager to apply the Ph.D. in economics he'd earned at Vanderbilt University in Nashville to rebuilding a nation newly born out of Pakistan's bloody civil war. Soon after beginning his stint at Chittagong University, however, Bangladesh lapsed into a disastrous famine.

"I found myself in a very strange situation, teaching elegant theories of economics," he recalled in an interview in his Dhaka office, the capital. "I walked out of the classroom and those elegant theories of economics had no use for people who were dying. So I wanted to get away from that theoretical environment."

Yunus surveyed a nearby village and discovered that for a mere $27, he could wipe out the debts of 42 families bonded in virtual slavery to the local money lender, and help them launch new businesses. He personally bankrolled the group. Yet even after "they paid back every penny," Yunus was never able to convince local bankers of the viability of what would come to be called microlending. "So I thought that I should have my own bank."

Grameen grew rapidly to more than 1,000 branches across rural Bangladesh and, over time, acquired its trademark bias in favor of female borrowers, who now receive 95 percent of the loans.

"We started noticing that when [a] woman was the borrower, children were much better off," Yunus said. "A woman also is [a] very cautious user of the money and I thought this came from the basic skill she has kind of accumulated over so many years, being a woman in a poor family.

Female borrowers preferred

"Men were very impatient," Yunus added. "They wanted to enjoy right away, they would entertain friends, go to the movies, they wanted to enjoy."

Although she officially holds title, Dilwara Begum says her Grameen-financed enterprise has always been a partnership with her husband, Nazim Uddin. Eleven years ago, they borrowed about $50 to purchase a cow and start a milk business.

Over time, they added a few chickens, then with another Grameen loan built a poultry barn and launched into egg farming on a larger scale. Twice weekly, a small truck from Dhaka arrives to collect about 3,000 eggs.

The family homestead -- about 600 square feet of living space on a lush, soggy half-acre cultivated for the staple rice -- is at best modest. Yet the brick-and-mortar construction -- financed under a Grameen home loan program -- can better withstand the perennial flooding in this low-lying country.

They also have a latrine and clean well water, basic amenities still far beyond the grasp of most Bangladeshis, including many Grameen borrowers.

No swift ticket to rise