Saving the world with a cup of yogurt (cont.)

By Sheridan Prasso, Fortune

"Farming cows is a troublesome business," she says, calculating her family's daily profit from the taxi business at nearly $23 - more than the minimum wage of a garment worker for a whole month in Bangladesh. "This taxi business is better, and my sons can take care of it," she says, "so I sold all my cows."

Microlending also offers many families a way into the middle class. Take the case of Riziya Begum, who bought her first cow with a $30 loan from Grameen Bank. Before that, she and her husband were among the millions of poor farmers in Bangladesh, growing rice and living day to day.

"Sometimes I ate, sometimes I didn't have food," she says, sitting in her corrugated-tin house - the equivalent of a middle-class home in Basta. Begum, who is about 40 (she doesn't know her birth date), bought land with the money she earned from selling cows. She sent her eldest son to work in Saudi Arabia with money she earned from selling some of her land. And he sent enough money home a few years ago for her to buy a TV.

Begum also has her own well for drinking water, a second plot of land on which she and her husband plan to build brick homes for their two sons when they get married, and an electric fan. "Even my cow has a fan now," she says.

But her greatest pride is her 8-year-old daughter, Aklima, who attends school every day - the first girl in many generations of Begum's family to have an education. Begum is considering taking out a Grameen higher-education loan to send Aklima to a university. Aklima, it turns out, wants to be a doctor. "I saw it on TV," she says.

The women members of Grameen Bank rely on peer pressure to encourage one another to pay back loans, and few, if any, ever default - instead turning to relatives and friends to help them make their payments.

Yunus concedes that those really in trouble, such as victims of Bangladesh's recurring natural disasters, may be allowed to take more time to pay by rescheduling their debts. In the case of death or incapacitation, an insurance plan paid into by all borrowers covers the loan principal.

Grameen is self-sustaining, charging interest rates of 20 percent on basic loans and lending only the money it takes in from members repaying loans (and the 33 percent of depositors who are not borrowers). Money lenders, to whom villagers would otherwise turn, sometimes charge up to 10 percent a day. Interest rates on Grameen home-improvement loans and mortgages are 8 percent.

Grameen also set up an interest-free loan program for beggars. There's no obligation to pay back the loans, but the beggars are encouraged to use them to buy small trinkets or food to take on their rounds and try to sell. If they do pay back their principal, they can get another loan.

So far, the program has turned 78,000 beggars into merchants, and some 2,000 of them report that they have stopped begging entirely, breaking generations of tradition. Sajeda Begum of Ittahata village north of Dhaka, who gives her age as around 35, is an example. With a loan of 1,000 taka ($15), she started buying eggs from the market in the mornings, taking them home and boiling them, then selling them for a 2-cent markup to factory workers leaving their shifts.

Her 40-cent-a-day profit is enough to feed her family and make loan payments. "No more begging," she says. "I hope to borrow another 3,000 to 4,000 ($45 to $60) to expand this business. It makes money."

Grameen has provided Bangladeshi women the financial means to leave abusive husbands. They own homes in their own names, no longer pay dowries, live longer, have improved nutrition and hygiene and are better able to care for their families. They transcend the class status they were born into through entrepreneurialism and education.

"I am destroying the culture, yes," Yunus says, beaming mischievously at the thought. "Culture is a dynamic thing. If you stay with the same old thing over and over, you don't get anywhere."

The same applies to Yunus's concept of microcredit. Sticking with the same old idea over and over only gets you so far. To really get somewhere, Yunus says ... well, there's this Big New Idea.


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