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Microcredit industry puts 'yes we can' spirit to work for the poor

When President Barack Obama presents the Medal of Freedom to 16 distinguished American and international "agents of change" at a White House ceremony on Aug. 12, one of the honorees will link Mr. Obama to both his past and to the future he is so committed to creating. Among the 16 leaders is professor Muhammad Yunus, the founder of the Grameen Bank in Bangladesh, which makes tiny loans for self-employment to some of the poorest people in that country. Yunus is also one of the world's most effective champions of the "yes we can" spirit.

Decades ago the economics professor and Nobel Peace Prize Laureate described his search for new bank clients as a process of "looking for the most timid." He wasn't looking for the villagers who were the first to step forward to ask for a micro-loan starting at less than $10, he was looking for those who were last to come forward and who trusted their abilities the least. To those villagers he and his staff would say, "Yes you can."

Thirty-three years later nearly 8 million members of Grameen Bank (a total of 40 million when you count their family members) are saying "yes we can" to the whole world. Since its inception, Grameen Bank has lent more than $8 billion to the poor in Bangladesh.

Yunus had his own "yes we can" moment as a young economics professor who faced an agonizing famine that left him doubting his value as a teacher and as a human being. He was so shaken by the sight of people dying of starvation that when he set foot into Jobra, the village next to his campus, all he wanted to do was to see if he could be of use to one person for one day not 40 million — just one. It was in that village that he met a stoolmaker who horrified him when she explained that she earned only 2 cents a day for her beautiful craftsmanship. With no money to buy the bamboo she needed, Sufia Khatun was forced to borrow from a moneylender who demanded that she sell her finished stools back to him at a price he set — a price so low that she made only 2 cents a day profit.

When he asked whether she could earn more if she was freed from the moneylender, she told him, "Yes I can." Yunus had a student to look for other villagers who were in the same dilemma. The student found 42 people who needed a grand total of $27 to pay off the moneylender, buy their raw materials and sell their wares to the highest bidder. That's right; all they needed was an average of 68 cents each. With her loan of less than $1, the stoolmaker's profits soared from 2 cents a day to $1.25 a day.

Now Yunus has set his sights on titans of business and industry with his social business concept and the chairmen of Dannone, Intel and BASF are beating a "yes we can" path to his door to create new nonprofit/nonloss businesses that have as their sole goal improving people's lives. The corporations can recover their initial investments in the social businesses, but after that, all profits are plowed back into these new companies.

When the U.S. president shakes the hand of the Bangladeshi micro-banker at the White House ceremony this week, Obama will be touching his own past and the microfinance work his mother did in Indonesia. And when Yunus opens the Microcredit Summit next April in Nairobi, Kenya, the banker from Bangladesh will launch the next phase of microfinance in the birthplace of Obama's father and throughout the continent.

Obama should accompany Yunus to that summit in Kenya to join in the banker's most inspiring appeal — a daring call to put poverty in the museums where it belongs.

Yes we can!

Sam Daley-Harris is founder of the Microcredit Summit Campaign, which seeks to reach 175 million poorest families with microcredit.