An Interview by Sean Murphy


On March 2, 2011, the Bangladeshi finance regulator, Bangladesh Bank, ordered Muhammad Yunus’s removal as the director of Grameen Bank, an institution he founded in 1983. Grameen appealed the action, but lost as the Supreme Court upheld the decision. On May 12, Yunus resigned as director. While the action was embroiled in political maneuvering, there were also questions about the legitimacy of Grameen’s practices raised.

I worked for Grameen Trust during the summer of 2010 and had the opportunity to interview both Professor Yunus and Professor Latifee. The interviews touched on a variety of topics, including my work at Grameen and my experience in Bangladesh. The subjects covered range from the organization’s operation and the concept of social business to family planning through women’s empowerment. The questions and answers presented here represent a sampling of those interviews.

Grameen Bank is the first licensed microfinance bank. It provides services to rural Bangladesh. Grameen Trust is the international branch of Grameen Bank, operating through partner institutions around the world and in urban Bangladesh.



In the name of poverty alleviation, Grameen Trust seeks out incredibly difficult places to work, failed states, war torn regions and territories ruled by drug lords. The Trust forms contractual relationships with organizations and governments in countries where other MFIs have failed. Conditions in these places make traditional business indicators unavailable—the type of information that would allow a private company to determine whether or not the local economy could support its business.

I am wondering about the future of this kind of a model. It seems to rely heavily on intuition. Can this continue into the future?


Yunus: Basically what we do is see that people need money that other institutions are not providing them. So we see that we can lend them money. We don’t know what the rest of the country is like or what could be done about it. Somebody needs money, and I want to give them money. That is all.

And we feel our way. If it works, fine. If it doesn’t work, sorry it didn’t work. So this is not a guaranteed thing. You cannot always say that you will be successful in every single case. But so far, luckily, it worked. So that gives us encouragement. We didn’t say, “which country? Costa Rica? My god, I don’t want to go there.” We would never say this. We go, wherever it is. Maybe we’ve never heard the name before, but okay, there are people who need this service. We can try. If it works, we will continue, if it doesn’t work, we’ll close down. So far, it has worked. So we will continue.

We don’t take this news about what has happened; is it a dictatorship, is it military rule, are there drug lords? We don’t ask those questions. If people live there, we can live there too.


Will this remain the model for Grameen Trust’s operations?

Yunus: So far this has been the strategy. If it stops working, we will figure something else out. Close down, come home. But until that happens everywhere, we will continue this way. When we are invited, we go. We don’t say, no that region is not good, that economy is no good. We don’t ask those questions. We will go and try it out.


Questions have been raised as to whether or not microfinance is really responsible for moving people out of poverty. Grameen Bank publishes material stating that there has been growth here amongst its borrowers, and there have been criticisms from researchers that the increase in microfinance lending is correlated with this growth, but is not causing it. How do you respond to these criticisms?

Latifee: I know there are criticisms of microcredit as a whole and also about Grameen Bank borrowers in particular. If you are talking about macro terms, considering the economy as a whole, it is difficult to show or to prove that there is an impact. But if you are considering individuals, families, who have enjoyed these facilities and have access to microcredit, you can come up with some results, the impact. If you look at what has happened in their lives, at their standard of living, definitely you will see a lot of improvement.

In Bangladesh, during past financial crises and during certain times of the year, people used to die of hunger. People used to go without clothes during disasters. People could not rehabilitate themselves after cyclones and devastating floods. Now in Bangladesh, you see that even during this last financial crisis, the poor people could protect themselves because they had access to money. They had their own savings. They are not helpless like before because they have some place where they can go and claim their own money and survive. Things have changed a lot. And I will say that for microfinance borrowers, it is because of microfinance. They had no access to other banking institutions, they have no assets, they have no land, but they still had access to microfinance.


The entire model of microfinance can be viewed as a critique on the formulaic processes witnessed in international development. Did you envision microfinance becoming an aid alternative and a phenomenon to this degree?

Latifee: Now we are not only talking about microfinance, but social business as well. What we are saying with these is a very popular proverb; why do you give a person a fish, why not teach him or her how to catch a fish? We are seeing billions of dollars going into development aid, but the result is not as encouraging as it should be. There are so many discouraging things, so much inefficiency and lack of focus. You are giving aid to the poor countries for poverty alleviation, but you end up seeing a certain kind of development, we see modern airports and railroads, but we do not see how this is benefitting the poor people. So in that sense, we said that if you design your program in a way that directly benefits poor people, and help improve their standard of living, that it is more valuable than just giving aid in the name of development. It should be focused.

Maybe your per capita income is rising, but you have to see if that means anything for the poor; is their income rising? If you go through with a specific program and you see that the aid is going directly to these people and they become self-reliant, it is much more valuable than just giving aid and creating some showpieces.


In your latest publication, Social Business, you state that, “social business is about making a complete sacrifice of financial reward from business.” And that “in a social business, the investors and investees can gradually recoup the money invested but do not take any dividend beyond that point. The purpose of the investment is purely to achieve one or more social objectives.”

You make a distinction here between your definition of a Social Business and what others might call “social entrepreneurship.” What is the purpose of distinguishing that social businesses do not pay a profit to shareholders?

Yunus: This ensures that I (as a social business owner) am not motivated by personal benefit. I am doing this because I want to solve a problem, so I don’t bring my own interests into the picture. That could corrupt my ability to focus completely on the problem, because I want to make some money out of it. Other businesses are motivated to protect personal interests first, and then make a change. So that way you are limited. I say, open it up. In this business you don’t make any personal profit. So you can fully concentrate on solving the problem—there is no link between the CEO and the profit being generated at all.

In the very design of the business, you can see that this makes a big difference. If you are not worried about making any money off of it, your entire talent and creativity is focused on solving the problem. The company’s whole design is focused on that goal, because this is not where you make money. You can make money somewhere else, but not here.

Latifee: The only difference between social business and other businesses is that in social business, if you are earning profit by giving proper remuneration, proper wage, proper salary, appropriate salary to your employees, and then you are earning profit on top of that, the additional profit will be reinvested in the business. It will not go to the pocket of any individual or group of individuals.

The most talented people should be in social business, so that they can develop something that is at the same time profitable and solving some social problem. You need talented people to do these things, highly talented people.


What is the incentive for traditional businesses to get involved with social business ventures? What impact do you hope to have on these businesses?

Yunus: My way of looking at it is that after getting involved in this, their viewpoint will change so much, that they will change the business model for bigger projects. So the impact works in both directions. The question is, are they influencing me or am I influencing them? What will be the ultimate result; we will see. I see a lot of impact, for example, within our Grameen Danone project, because they do it here in Bangladesh. This has a much bigger impact across Danone’s entire company.

So, it’s not that they came and did a social business idea here, and now they can do more business somewhere else. It’s making an impact on the rest of their business. It encourages executives to ask, “why are we making while people are suffering, why cant we redesign this whole thing?” So that might be an outcome too.


The practice of microfinance has opened conversation to many difficult subjects, particularly around population control and population growth. Personally, I have found that even starting conversations on the topic can be incredibly difficult because it can incite such strong emotions in people.  How do you feel about your life’s work being associated with such charged debates? 

Latifee: I believe that for any such program where you are connecting with people, you are working with people. You need to develop a communication skill. How to communicate with people. How to talk about difficult subjects. So it is not something like you get in cook books! This skill is developed over time. To frankly and successfully communicate with somebody else, you have to find your own strategy. You can discuss any difficult thing with anyone, provided you create an environment for them. If you understand someone, you should know how to approach them and know at what point of time to ask a question of that nature.

In Grameen Bank, as you know, we have been working with poor women. Our staff is working with women who do not remember their past—what is their birth date, memories of the childhood, memory of adolescence—because they were taught that way. just born and grew to this age. Nothing else. But when you are assigned to have a life history, you try to remember what may be your age, or a memory of childhood. So the strategy is to get acquainted with her; develop a rapport with her. Because you may ask her for a birthdate, but she has never thought about that question. Because she was not born in a family where birthdays were celebrated, she does not know her age. So you try to relate different experiences in her life and gradually you can unfold her mind, she starts thinking about how old she may be, where did she spend her childhood, what kind of treatment she received from her parents, the neighbors, or men. So it is a very difficult question just to ask a woman about her age.

But if you can develop this rapport and she begins to unfold her mind, she tries to go back and remember the history of her childhood, what kind of suffering she faced, and about family planning, which is a very difficult topic. So if you bluntly and directly ask someone about family planning or population control, she may be upset. She may be nervous. But if you start the question another way; are you alone, are you married, how many children do you have? Then you can ask if she can send them to school, able to give them enough food, enough clothing, can you treat them when they become sick, can you go to the doctor? So you talk about problems, and then she can tell you about her situation. And then she can see that many problems are related to having a large family without enough income.

This is all social engineering. There is no cook’s recipe for it. It depends on how friendly you can become and how you can motivate someone to understand these things.

Yunus: Population control is a common issue here. Everyone is in favor of population control; no one is opposing it. The question is how best to do that, whether it is promoting safe birth control measures, or any other form of direct control of population size. There are other indirect ways; if income levels rise, population falls. This is also accepted, so we try to make sure that growth of the economy and income levels go up. This will have an indirect effect on the population size. Another one is education. If you empower women in these ways, population growth will be reduced.

Microcredit indirectly affects population size because it can create empowerment of women. If a woman is better informed she can make decisions for herself about birth control and so on. If all of these things can happen in small instances, they add up. So microcredit can have an impact on population growth.

While the future leadership of Grameen Bank is uncertain, the impact of its legacy is immediately recognizable. Microfinance has become a household term and microcredit lenders have spread to every corner of the globe. The Bank’s success has stimulated new conversation about traditional development practices and has heralded alternative strategies to reduce chronic poverty around the world.

Additional information about Grameen Bank, Grameen Trust and Grameen Danone can be found the organization’s website.


Written by Benjamin

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