Drucker’s Five Principles of Innovation
Below are five principles that can help you take advantage of a new innovation you may have discovered.
1. Begin with an analysis of the opportunity.
2. Analyze the opportunity to see if people will be interested in using the innovation.
3. To be effective, the innovation must be simple and clearly focused on a specific need.
4. Effective innovations start small. By appealing to a small, limited market, a product or service requires little money and few people to produce and sell it. As the market grows, the company has time to fine-tune its processes and stay ahead of the emerging competition.
5. Aim at market leadership. If an innovation does not aim at leadership in the beginning, it is unlikely to be innovative enough to successfully establish itself. Leadership here can mean dominating a small market niche.
Some of this goes against the feedback we got from Island Innovation Fund, most notably the idea of starting small. We're in no rush so we're making sure we do this right.
Monday, April 4, 2011
Tuesday, March 29, 2011
The Blue Sweater, Chapter 2, A Bird on the Outside, A Tiger Within
"You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the thing which you think you cannot do." — Eleanor Roosevelt
In order to contribute to Africa (Waianae), I would have to know myself better and be clearer about my goals. I would have to be ready to take Africa (Waianae) on its own terms, not mine, and to learn my limits and present myself not as a do-gooder with a big heart, but as someone with something to give and gain by being there. Compassion wasn't enough.
The first step in solving any problem is to identify and name it.
My ability to solve the problem did little to help if the women themselves didn't want to implement a solution.
I should have been clearer about having a mandate first and gotten real buy-in, not just a perfunctory agreement, and then brought the right people along throughout the process so there were no surprises. The question was one of leadership, of having the patience and skills to bring people with me— and I had yet to learn that fully.
...how to build accountability into non-profit organizations. Donors could convince themselves to give to nonperforming organizations based on hearing a few good stories. The world needed something better than that.
...it can take years for a new kind of organization to get on its feet and a few years after that for it to walk. The key is to find local leaders who own the dream and will make it happen.
In order to contribute to Africa (Waianae), I would have to know myself better and be clearer about my goals. I would have to be ready to take Africa (Waianae) on its own terms, not mine, and to learn my limits and present myself not as a do-gooder with a big heart, but as someone with something to give and gain by being there. Compassion wasn't enough.
The first step in solving any problem is to identify and name it.
My ability to solve the problem did little to help if the women themselves didn't want to implement a solution.
I should have been clearer about having a mandate first and gotten real buy-in, not just a perfunctory agreement, and then brought the right people along throughout the process so there were no surprises. The question was one of leadership, of having the patience and skills to bring people with me— and I had yet to learn that fully.
...how to build accountability into non-profit organizations. Donors could convince themselves to give to nonperforming organizations based on hearing a few good stories. The world needed something better than that.
...it can take years for a new kind of organization to get on its feet and a few years after that for it to walk. The key is to find local leaders who own the dream and will make it happen.
The Blue Sweater, Chapter 1, Innocent Abroad
"There is no passion to be found playing small in settling for a life that is less than the one you are capable of living." — Nelson Mandela
Our actions— and inaction— touch people we may never know and never meet across the globe.
'Regardless of what you become, remember always that to whom much is given, much is expected. God gave you many gifts and it is important that you use them for others as best you can.'
I suggested to my boss an experiment, even a small one, to lend to Brazil's working class might actually provide better results than lending to the rich. He patted me on the head and reminded me of the poor's lack of collateral, the high transaction costs of making small loans, and the culture of poverty, which would result in no one repaying.
...a combination of service and adventure could lead to a lkife of passion and constant renewal.
Many commercial banks now also have a part of their portfolio dedicated to m icrofinance and are doing is successfully and profitably. None of this was thought to be possible 20 years ago; change doesn't happen overnight. (gulp)
...one way to solve poverty is to link grassroots organizations to the resources and skills of mainstream corporations.
Our actions— and inaction— touch people we may never know and never meet across the globe.
'Regardless of what you become, remember always that to whom much is given, much is expected. God gave you many gifts and it is important that you use them for others as best you can.'
I suggested to my boss an experiment, even a small one, to lend to Brazil's working class might actually provide better results than lending to the rich. He patted me on the head and reminded me of the poor's lack of collateral, the high transaction costs of making small loans, and the culture of poverty, which would result in no one repaying.
...a combination of service and adventure could lead to a lkife of passion and constant renewal.
Many commercial banks now also have a part of their portfolio dedicated to m icrofinance and are doing is successfully and profitably. None of this was thought to be possible 20 years ago; change doesn't happen overnight. (gulp)
...one way to solve poverty is to link grassroots organizations to the resources and skills of mainstream corporations.
The Blue Sweater, Prologue
My work in Africa taught me about the extraordinary resilience of people for whom poverty is a reality not because they don't work hard, but because there are too many obstacles in their way.
To address poverty in a more insightful way, in 2001 I started a nonprofit organization called Acumen Fund. We raise charitablefunds, but instead of just using money for giveaways, we make careful investments in entrepreneurs who are willing to take on some of the world's toughest challenges...like health care, safe water, housing, and alternative energy.
We measure our results in social as well as financial terms and share lessons and insights learned with the greater world.
We've seen what can happen when an entrepreneur views the market as a listening device that reveals how to tailor services and products to the preferences of low-income people who are viewes as consumers, not victims.
...we can end poverty. Never before in history have we had the skills, resources, technologies, and imagination to solve poverty that we do now...fundamental change is possible in a single generation.
Today, poor people the world over are seeking opportunity and choice to have greater dignity in their lives— and they want to so it themselves, even if they need a little help. Today we have the tools and technologies to bring real opportunities to people all across the world.
The time has come to extend to every person on the planet the fundamental principle that we hold so dear: that all human beings are created equal. Rather than seeing the world as divided among different civilizations or classes, our collective future rests upon our embracing a vision of a single world in which we are all connected. Indeed, maybe this notion of human connection is the most important— and complex— challenge of our time. Market play a role in this vision, and so does public policy. So does philanthropy. We all play a role in the change we need to create.
To address poverty in a more insightful way, in 2001 I started a nonprofit organization called Acumen Fund. We raise charitablefunds, but instead of just using money for giveaways, we make careful investments in entrepreneurs who are willing to take on some of the world's toughest challenges...like health care, safe water, housing, and alternative energy.
We measure our results in social as well as financial terms and share lessons and insights learned with the greater world.
We've seen what can happen when an entrepreneur views the market as a listening device that reveals how to tailor services and products to the preferences of low-income people who are viewes as consumers, not victims.
...we can end poverty. Never before in history have we had the skills, resources, technologies, and imagination to solve poverty that we do now...fundamental change is possible in a single generation.
Today, poor people the world over are seeking opportunity and choice to have greater dignity in their lives— and they want to so it themselves, even if they need a little help. Today we have the tools and technologies to bring real opportunities to people all across the world.
The time has come to extend to every person on the planet the fundamental principle that we hold so dear: that all human beings are created equal. Rather than seeing the world as divided among different civilizations or classes, our collective future rests upon our embracing a vision of a single world in which we are all connected. Indeed, maybe this notion of human connection is the most important— and complex— challenge of our time. Market play a role in this vision, and so does public policy. So does philanthropy. We all play a role in the change we need to create.
Peter Drucker— Chapter 1, The Commitment
The non-profit organization exists to bring about a change in individuals and in society...the ultimate test is not the beauty of the mission statement. The ultimate test is the right action.
The leader who basically focuses on himself or herself is going to mislead...What matters is the leader's mission.
Setting Concrete Action Goals
A mission statement has to be operational, otherwise it's just good intentions.
The task of the non-profit manager is to try to convert the organization's mission statement into specific.
One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear. As you add new tasks, you deemphasize and get rid of old ones. You can only do so many things. As you add on you have to abandon...which are the few things we can accomplish that will do the most for us, and which are the things that contribute either marginally or are no longer of great significance.
So you constantly look at the state-of-the-art. You look at the opportunities in the community.
The Three "Musts" of a Successful Mission
Look at strength and performance. Do better what you already do well— if it's the right thing to do. The belief that every institution can do everyhting is just not true. When you violate the values of an institution, you are likely to do a poor job.
Look outside at the opportunities, the needs. Where can we, with the limited resources we have— and I don't just mean people and money, but also competence— really make a difference, really set a new standard? One sets the standard by doing something and doing it well. You create a new dimension of performance.
I have never seen anything done well unless people were committed.
After asking "what are the opportunities, the needs?" then, do they fit us? are we likely to do a decent job? Are we competent? Do they match our strengths? Do we really believe in this?
So you need three things: opportunities, competence, and commitment. every mission statement has to reflect all three or it will fall down on what is its ultimate goal, its purpose and final test. It will not mobilize the human resources of the organization for getting the right things done.
The leader who basically focuses on himself or herself is going to mislead...What matters is the leader's mission.
Setting Concrete Action Goals
A mission statement has to be operational, otherwise it's just good intentions.
The task of the non-profit manager is to try to convert the organization's mission statement into specific.
One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear. As you add new tasks, you deemphasize and get rid of old ones. You can only do so many things. As you add on you have to abandon...which are the few things we can accomplish that will do the most for us, and which are the things that contribute either marginally or are no longer of great significance.
So you constantly look at the state-of-the-art. You look at the opportunities in the community.
The Three "Musts" of a Successful Mission
Look at strength and performance. Do better what you already do well— if it's the right thing to do. The belief that every institution can do everyhting is just not true. When you violate the values of an institution, you are likely to do a poor job.
Look outside at the opportunities, the needs. Where can we, with the limited resources we have— and I don't just mean people and money, but also competence— really make a difference, really set a new standard? One sets the standard by doing something and doing it well. You create a new dimension of performance.
I have never seen anything done well unless people were committed.
After asking "what are the opportunities, the needs?" then, do they fit us? are we likely to do a decent job? Are we competent? Do they match our strengths? Do we really believe in this?
So you need three things: opportunities, competence, and commitment. every mission statement has to reflect all three or it will fall down on what is its ultimate goal, its purpose and final test. It will not mobilize the human resources of the organization for getting the right things done.
Micro-lending skeptics
I sent my formal proposal to Paul Brewbaker, formerly Chief Economist at Bank of Hawaii, and now of TZ Economics. Although he hadn't actually read the proposal, he didn't seem to think much of our idea:
I haven’t read the attachment but here are some quick thoughts, actually a critique on first principles.
Micro-lending occurs in markets that are characterized by: (1) low levels of per capita income; and (2) inadequate financial “deepening.” The two are not independent, but the causality runs from (2) to (1). Hawaii is not a (1) market. Hawaii is a “G-22” market. Honolulu is not Mumbai.
Modern finance and banking theory typically asks why (1) and (2) co-exist in the context of information asymmetry. That is, financial development overcomes two forms of asymmetry—adverse selection and moral hazard—which is it absent in some contexts (like, low-income countries). For a variety of reasons related to cultural and historical specificity, without getting into post-colonial mush, the absence of well-developed private property rights systems in many developing contexts has often been an impediment to the development of traditional bank lending. Collateralization institutions require clear property rights, and credible enforcement of the associated state-contingent contracts (“if you don’t pay back the loan then this happens”). For example, much of the hangup immediately after the start of the Asian Financial Crisis was the lack of credibility of bankruptcy law enforcement in places like Thailand. (Within 90 days of the collapse of the Thai baht in July 1997, acting on an IMF recommendation, Thailand re-wrote its constitution, dissolved the Parliament, had new Parliamentary elections, and passed the necessary bankruptcy law reforms, something that could never happen in Hawaii.) Collateralization, information technology (to confirm borrowers’ financial status), monitoring of covenants in loan agreements, all are tools designed to create an incentive-compatible environment between borrowers and lenders. They mitigate risks of lenders selective adversely, and mitigate risks of borrowers behaving in morally hazardous ways, before and after a loan is made, respectively. Certain substitutes for the enforcement of such contracts—such as peer monitoring, where village elders or “kupuna” ensure credible enforcement threats of loan covenants—have been successful in some micro-lending contexts where other information asymmetry-reducing institutions are not well-developed. That’s not Hawaii, is it?
So the question is: where, in Hawaii, are existing lending institutions inadequate to the needs of a micro-lending borrower segment? We already have a thriving, non-profit, small- (if not micro-) lending community in Hawaii. They are called credit unions. So ubiquitous are they, and so large a share of deposits do they comprise in Hawaii, that during the 1990s the U.S. Justice Department changed antitrust law interpretation to recognize the importance of credit unions in Hawaii when calculating concentration ratios in their due diligence of bank and savings and loan acquisitions. In no other state does the role of credit unions even approximate their role in Hawaii. That’s before we even talk about banks, all of whom are under the (dubious) requirements of the Community Reinvestment Act (CRA) to lend in economically-disadvantaged communities. Call it forced adverse selection: even the legacy of the sub-prime financial crisis has not led anybody to question the wisdom of CRA, at least not very publicly. (Only nerds talk about it at financial economics conferences.) At least one Hawaii bank routinely receives an “outstanding” CRA rating by federal bank examiners, a designation conferred on only 7% of commercial banks nationwide.
I’ll take a look at the doc file in the next couple days but I guess my first concern would be—all kidding about the People’s Republic of Hawaii aside—why would anybody do this in Hawaii and, even more importantly, why would anybody expect a non-profit lender to do it well? The point is to have skin in the game, both borrower and lender, so that the loan gets paid back. Non-profits have nothing at stake, except the self-perception of the goodness of the deeds they do, hardly a basis for good credit allocation. It’s not clear to me that the track record of credit unions in terms of loan quality makes the non-profit channel appealing, and there is plenty of evidence of such clowns as DBEDT, OHA and DHHL that government is an even worse non-profit lender than private not-for-profit institutions. The only way I could see this making sense is if somebody had a better computer algorithm than commercial banks already do (who, let’s remember, do this stuff on-line already). With their existing information technology banks screen borrowers, originate loans, and manage payments and settlement, all with a less than 4% loan loss rate for credit card issues (which is about the max that the last 20 VISA and Mastercard issuers will actually tolerate) or, if you’re a Bank of Hawaii, at a less than 1% loan loss rate. In fact, come to think of it, credit cards ARE the micro-lending channel in the U.S., and every kid in college can get one of those. What is the market here?
OK, harsh reaction, I know. The more I contemplate it, the harsher my reaction gets. Start by having the gang think through answers to those questions and I’ll get back to you.
pb
I haven’t read the attachment but here are some quick thoughts, actually a critique on first principles.
Micro-lending occurs in markets that are characterized by: (1) low levels of per capita income; and (2) inadequate financial “deepening.” The two are not independent, but the causality runs from (2) to (1). Hawaii is not a (1) market. Hawaii is a “G-22” market. Honolulu is not Mumbai.
Modern finance and banking theory typically asks why (1) and (2) co-exist in the context of information asymmetry. That is, financial development overcomes two forms of asymmetry—adverse selection and moral hazard—which is it absent in some contexts (like, low-income countries). For a variety of reasons related to cultural and historical specificity, without getting into post-colonial mush, the absence of well-developed private property rights systems in many developing contexts has often been an impediment to the development of traditional bank lending. Collateralization institutions require clear property rights, and credible enforcement of the associated state-contingent contracts (“if you don’t pay back the loan then this happens”). For example, much of the hangup immediately after the start of the Asian Financial Crisis was the lack of credibility of bankruptcy law enforcement in places like Thailand. (Within 90 days of the collapse of the Thai baht in July 1997, acting on an IMF recommendation, Thailand re-wrote its constitution, dissolved the Parliament, had new Parliamentary elections, and passed the necessary bankruptcy law reforms, something that could never happen in Hawaii.) Collateralization, information technology (to confirm borrowers’ financial status), monitoring of covenants in loan agreements, all are tools designed to create an incentive-compatible environment between borrowers and lenders. They mitigate risks of lenders selective adversely, and mitigate risks of borrowers behaving in morally hazardous ways, before and after a loan is made, respectively. Certain substitutes for the enforcement of such contracts—such as peer monitoring, where village elders or “kupuna” ensure credible enforcement threats of loan covenants—have been successful in some micro-lending contexts where other information asymmetry-reducing institutions are not well-developed. That’s not Hawaii, is it?
So the question is: where, in Hawaii, are existing lending institutions inadequate to the needs of a micro-lending borrower segment? We already have a thriving, non-profit, small- (if not micro-) lending community in Hawaii. They are called credit unions. So ubiquitous are they, and so large a share of deposits do they comprise in Hawaii, that during the 1990s the U.S. Justice Department changed antitrust law interpretation to recognize the importance of credit unions in Hawaii when calculating concentration ratios in their due diligence of bank and savings and loan acquisitions. In no other state does the role of credit unions even approximate their role in Hawaii. That’s before we even talk about banks, all of whom are under the (dubious) requirements of the Community Reinvestment Act (CRA) to lend in economically-disadvantaged communities. Call it forced adverse selection: even the legacy of the sub-prime financial crisis has not led anybody to question the wisdom of CRA, at least not very publicly. (Only nerds talk about it at financial economics conferences.) At least one Hawaii bank routinely receives an “outstanding” CRA rating by federal bank examiners, a designation conferred on only 7% of commercial banks nationwide.
I’ll take a look at the doc file in the next couple days but I guess my first concern would be—all kidding about the People’s Republic of Hawaii aside—why would anybody do this in Hawaii and, even more importantly, why would anybody expect a non-profit lender to do it well? The point is to have skin in the game, both borrower and lender, so that the loan gets paid back. Non-profits have nothing at stake, except the self-perception of the goodness of the deeds they do, hardly a basis for good credit allocation. It’s not clear to me that the track record of credit unions in terms of loan quality makes the non-profit channel appealing, and there is plenty of evidence of such clowns as DBEDT, OHA and DHHL that government is an even worse non-profit lender than private not-for-profit institutions. The only way I could see this making sense is if somebody had a better computer algorithm than commercial banks already do (who, let’s remember, do this stuff on-line already). With their existing information technology banks screen borrowers, originate loans, and manage payments and settlement, all with a less than 4% loan loss rate for credit card issues (which is about the max that the last 20 VISA and Mastercard issuers will actually tolerate) or, if you’re a Bank of Hawaii, at a less than 1% loan loss rate. In fact, come to think of it, credit cards ARE the micro-lending channel in the U.S., and every kid in college can get one of those. What is the market here?
OK, harsh reaction, I know. The more I contemplate it, the harsher my reaction gets. Start by having the gang think through answers to those questions and I’ll get back to you.
pb
Muhammud Yunus
Micro-lending's credibility takes another hit as Muhammud Yunus is removed as the head of Grameen Bank.
There was also a story on NPR this morning that also cited his creation of a rival political party as the underlying reason for the government to ask him to resign under the guise of exercising the rule concerning mandatory retirement age. Another interesting component of this story is that the people of Bangladesh, as reported by the correspondent, are actually ambivalent about Muhammud Yunus. Apparently they feel that he has used a portrayal of Bangladesh as a backwards nation with scores of poverty-stricken people as the means to gain his international fame.
Here's the transcript:
RENEE MONTAGNE, host:
The Bangladeshi government recently ordered him out as head of his bank, which is based there, but he's refusing to go. He's now battling his government in court to try and stay on.
To find out more, we reached Amy Kazmin, the South Asia correspondent for the Financial Times.
Thanks for joining us.
Ms. AMY KAZMIN (South Asia correspondent, Financial Times): Thank you.
MONTAGNE: Now from what I understand, the government says Yunus has to leave Grameen Bank that's the one that he founded - because he's in violation of retirement laws. That is, he's 70 years old, and according to the law in Bangladesh, company heads have to retire at 60.
Ms. KAZMIN: I mean, that is the technicality that the Central Bank of Bangladesh has used in ordering him to immediately relinquish his responsibilities as managing director. But actually, most people in Bangladesh believe that this is basically an orchestrated political campaign against him by the government of Prime Minister Sheikh Hasina.
MONTAGNE: Now, why would that be?
Ms. KAZMIN: Basically, in 2007, Muhammad Yunus, fresh off the back of his Nobel glory, announced plans to set up his own political party and clean up political life in Bangladesh, which is pretty notoriously corrupt. He dropped the idea within a couple of months, but as a result, I think the politicians in Bangladesh still see him as a potential political threat.
MONTAGNE: Well, for those who have heard of him, Muhammad Yunus is a hero, because he tackles social ills. He helps people better themselves, perhaps the most famous Bangladeshi in the world. What is his reputation inside Bangladesh?
Ms. KAZMIN: I think many people in Bangladesh are quite ambivalent, and they feel that his success has actually come on the back of the image of the country as being this kind of poor basket case, this deeply impoverished society. And I think many Bangladeshis actually kind of feel resentful towards that, because they feel that perhaps Bangladesh isn't quite so bad as he makes out in order to make his own case seem even stronger for his achievements.
MONTAGNE: Do you see a negative impact on Grameen Bank, or for that matter, on microlending in general, which also does have its problems in that area of the world already?
Ms. KAZMIN: Well, I think there's a few things. I mean, there's concern about the impact on the bank. There's a lot of concern that if Yunus is thrown out very unceremoniously and there's not kind of a stable, amicable transition plan, that depositors' confidence will be undermined, and that there could be a run on the bank. Because Grameen Bank doesn't just lend out money, they also take deposits. And they have over a billion dollars, I believe, of deposits. So if there was a run on the bank, that would be very destabilizing for the institution.
There's also the concern about microfinance in general. Globally, microfinance is actually in a bit of a crisis, going through a very intense soul-searching period because of a crisis not in Bangladesh, but in India, where microlenders - which have promoted themselves as these helping hands to poor - actually were accused of, like, over-lending and driving the poor into debt situations that they couldn't possibly ever get out of.
MONTAGNE: So his - if he is pushed out, what? That will make the whole microlending effort look that much worse?
Ms. KAZMIN: To be honest, I really don't think that Yunus being pushed out would necessarily heavily affect microfinance one way or the other, though it is a reminder of the political risks that microfinanciers face, as they say that they're trying to help the poor. Lots of politicians also want to be the allies of the poor and the protectors of the poor and may feel a little bit resentful about microfinanciers coming in and usurping that role.
MONTAGNE: Amy Kazmin is the South Asia correspondent for the Financial Times. She joined us from New Delhi.
Thanks very much.
Ms. KAZMIN: Thank you.
Bangladesh currently ranks 57th in the world in terms of GDP with approximately $105 billion in economic activity, ahead of Vietnam and just behind Kuwait. But with a population of 166 million and a resulting nominal per capita GDP of $641 (Wikipedia) it appears that Mr. Yunus' portrayal is mostly accurate.
There was also a story on NPR this morning that also cited his creation of a rival political party as the underlying reason for the government to ask him to resign under the guise of exercising the rule concerning mandatory retirement age. Another interesting component of this story is that the people of Bangladesh, as reported by the correspondent, are actually ambivalent about Muhammud Yunus. Apparently they feel that he has used a portrayal of Bangladesh as a backwards nation with scores of poverty-stricken people as the means to gain his international fame.
Here's the transcript:
RENEE MONTAGNE, host:
The Bangladeshi government recently ordered him out as head of his bank, which is based there, but he's refusing to go. He's now battling his government in court to try and stay on.
To find out more, we reached Amy Kazmin, the South Asia correspondent for the Financial Times.
Thanks for joining us.
Ms. AMY KAZMIN (South Asia correspondent, Financial Times): Thank you.
MONTAGNE: Now from what I understand, the government says Yunus has to leave Grameen Bank that's the one that he founded - because he's in violation of retirement laws. That is, he's 70 years old, and according to the law in Bangladesh, company heads have to retire at 60.
Ms. KAZMIN: I mean, that is the technicality that the Central Bank of Bangladesh has used in ordering him to immediately relinquish his responsibilities as managing director. But actually, most people in Bangladesh believe that this is basically an orchestrated political campaign against him by the government of Prime Minister Sheikh Hasina.
MONTAGNE: Now, why would that be?
Ms. KAZMIN: Basically, in 2007, Muhammad Yunus, fresh off the back of his Nobel glory, announced plans to set up his own political party and clean up political life in Bangladesh, which is pretty notoriously corrupt. He dropped the idea within a couple of months, but as a result, I think the politicians in Bangladesh still see him as a potential political threat.
MONTAGNE: Well, for those who have heard of him, Muhammad Yunus is a hero, because he tackles social ills. He helps people better themselves, perhaps the most famous Bangladeshi in the world. What is his reputation inside Bangladesh?
Ms. KAZMIN: I think many people in Bangladesh are quite ambivalent, and they feel that his success has actually come on the back of the image of the country as being this kind of poor basket case, this deeply impoverished society. And I think many Bangladeshis actually kind of feel resentful towards that, because they feel that perhaps Bangladesh isn't quite so bad as he makes out in order to make his own case seem even stronger for his achievements.
MONTAGNE: Do you see a negative impact on Grameen Bank, or for that matter, on microlending in general, which also does have its problems in that area of the world already?
Ms. KAZMIN: Well, I think there's a few things. I mean, there's concern about the impact on the bank. There's a lot of concern that if Yunus is thrown out very unceremoniously and there's not kind of a stable, amicable transition plan, that depositors' confidence will be undermined, and that there could be a run on the bank. Because Grameen Bank doesn't just lend out money, they also take deposits. And they have over a billion dollars, I believe, of deposits. So if there was a run on the bank, that would be very destabilizing for the institution.
There's also the concern about microfinance in general. Globally, microfinance is actually in a bit of a crisis, going through a very intense soul-searching period because of a crisis not in Bangladesh, but in India, where microlenders - which have promoted themselves as these helping hands to poor - actually were accused of, like, over-lending and driving the poor into debt situations that they couldn't possibly ever get out of.
MONTAGNE: So his - if he is pushed out, what? That will make the whole microlending effort look that much worse?
Ms. KAZMIN: To be honest, I really don't think that Yunus being pushed out would necessarily heavily affect microfinance one way or the other, though it is a reminder of the political risks that microfinanciers face, as they say that they're trying to help the poor. Lots of politicians also want to be the allies of the poor and the protectors of the poor and may feel a little bit resentful about microfinanciers coming in and usurping that role.
MONTAGNE: Amy Kazmin is the South Asia correspondent for the Financial Times. She joined us from New Delhi.
Thanks very much.
Ms. KAZMIN: Thank you.
Bangladesh currently ranks 57th in the world in terms of GDP with approximately $105 billion in economic activity, ahead of Vietnam and just behind Kuwait. But with a population of 166 million and a resulting nominal per capita GDP of $641 (Wikipedia) it appears that Mr. Yunus' portrayal is mostly accurate.
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