Sunday, 28 April 2013

My Crush on USA Today

When “USA TODAY” started publication in August, 1982, another world shattering event was fixing to complicate global alternative journalism: I walked away from a tenured full professorship as English chairman at Beaver College (renamed Arcadia University.). Most who observed these simultaneous moves believed both developments were foolish. That very month a new conservative association revolted against the Modern Language Association in Philadelphia.

I too was in a revolting mood —against new $100,000 English professorships exploiting their peon associates who had no health insurance and had to work at multiple jobs just to finish their Ph.D.’s. It was disgraceful and inhumane. The extant press mocked the innovative newspaper and complacent professors sneered at my idealism. I remembered these contradictions yesterday as I dropped into the Hotel Elefant, the only place in Weimar to buy “USA TODAY”. Dropping the twelve pages of Sports and Entertainment in a waste paperbasket, I scanned the twelve pages for news and opinion. BINGO!

Its Editorial Board grilled Muhammad Yunus about his 1976 founding in Bangladesh of the Grameen Bank, the first bank to save the poor from loan sharks by giving them access for the first time to financial services, and especially to women. The scheme was to give them $30-35 loans to start an income generating service. Instead of waiting for jobs, they created their own, one by one. "They find out their niche,” as Yunus puts it.

Each loan cycle is one year. Today there are 8.5 million borrowers, investing bit by bit $11 billions! If they pay their $35 loan back, they can raise as much ad $10,000. Repayment rates are an astonishing 99% plus! “We don’t take any donor money: We don’t take any money from the government. We take deposits and then lend to the poor. The bulk of the deposits come from the poor themselves.Every borrower is required to save a small of what they make each week,Today the balance of these deposits for all borrowers reaches to about $1 billion. So out of the $i.5 billions that loaned out, $1 billion is their own money.”

Why do earlier banks focus so much on men? They not only wouldn’t lend to any women, even rich ones. Yunus decided that half his patrons must be women, even though most asked that their money be given to their husbands! His task was to get a few women to overcome their traditional fears—so that more and more females would borrow. It took six years to reach a 50-50 level, female and male. Finally Yunus discovered women were reliable! Today out of his 8.5 million borrowers, 97% are women! They told women who raised chickens all the time to feed their own families could invest in a few more and sell them to others!

Would it work in America? Grameen Bank started in New York City in 2008. Now they have six branches and over 12,000 borrowers. They brought women from Bangladesh to New York to run Grameen the same way. The average loan is about $1500 and the repayment rate so far has been above 99%. After two and a half years, they invited Omaha, then Indianapolis, Los Angeles, and now Charlotte.

Once they had started lending in Bangladesh they found new problems: children’s education, housing, toilets, cooking stove problems. They decided to try to solve one crisis: night blindness among children. The solution was “simple”: they needed vitamin A. They needed to eat vegetables. Yumus started selling one-penny packets of vegetable seeds. They became the largest seed seller in the country! Night blindness disappeared from the country.

Which gave Yunus another idea. He vowed to create business to solve problems, not make money. He called the social businesses, non-dividend companies focused on solving human problems. Other countries got involved. Yumus started joint companies—first with Dannon, the yogurt company. They were fighting malnutrition! 46% of Bangladesh children suffer malnutrition. Dannon conceived a cheap but effective yogurt—just to cover the business costs. Dannon promised not to profit, just get their investment back. Yumus is busy with Intel and Adidas to devise equally effective schemes.

Strangely, I’d followed this story as CNN reported on the collapse of an eight story building housing bank and two garment makers: over 300 deaths .Outside Dacha, Bangladesh. Let Yumus loose. He’ll have a scheme by noon.

Other stories cover Starbucks CEO Howard Schultz plotting on the next moves for his 18,000 coffee bars in 62 countries, a sociological analysis of the West, Texas fertilizer fire, and an analysis of teenager reactions to Islamic terror. My coeval alternator is still going strong after 31 years. So I hope do I!

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