In an example of the relatively smallness of the world, a new documentary called “To Catch a Dollar” about the Grameen Bank and Muhammad Yunus’ good works has just been released. I hadn’t heard about it before, but my old man sent me a link yesterday to a news outlet called wickedlocal.com. As it turns out, the director, Gayle Ferraro, hails from my hometown of Westwood, Massachusetts, a small suburb located 20 minutes south of Boston, on exit 16B off I-95. I urge everyone to go out and see the documentary, support Muhammad Yunus in his struggles right now, and support my hometown of Westwood.
Yunus founded the original Grameen Bank in Bangladesh in 1976, operating under a more basic but similar microfinance system for poor women in rural areas, who used small loans to generate income for themselves — by buying a goat to sell its milk or purchasing yarn to use for knitting salable scarves, for example.
Such microloans have proven widely successful, and through its decades in operation, Grameen has established centers in more than 40 impoverished nations around the world. The launch of its U.S. counterpart in 2008 marked a new experiment in microfinance: Can a system that works so well in rural pockets of developing countries be effectively applied to America’s urban centers? To Catch A Dollar explores this question, following the bank’s early days in the Bronx.
Skeptics tend to doubt that an organization that gives away loans without demanding collateral could possibly be successful. But Grameen America boasts a 99 percent repayment rate. Supporters attribute this to a number of factors, including the sense of responsibility drawn from reporting to peers each week (a classic tenet of microfinance) to the work ethic of struggling women who see their loan as a rare lifeline.
Still, while revered by many, microfinance maintains its share of critics. Aside from raising eyebrows at the idea of simply handing out loans to folks in need, opponents fear that encouraging large numbers of individuals to self-employ will lead to a bubble doomed to burst, citing the travails that saddled Bolivia at the end of the twentieth century. Yunus wrote a scathing editorial in the New York Times earlier this year denouncing the rise of “loan shark” microfinance as many lenders have shifted from non-profit to commercial enterprises. And even as I publish this piece, Grameen’s founder himself faces charges from Bangladesh’s government, which has demanded his removal from the company.