Accounting and Program Audit Team
Log # 2
By: Shelby Chambers
This week, my team was assigned “A Pilot Project Is Born” from
Banker to the Poor by Muhammad Yunus. In this chapter, Yunus talks
about how he structured the Grameen Bank. When he first started, he
did not know how to operate a bank therefore he had to start from
scratch. What I found most interesting about this chapter was the
group loans he implemented. In our first class, Dr. Sama mentioned
the group loans to us but I didn’t realized how much of an impact
the members of the group had on each other. I thought this was a
unique way for Yunus to show the borrowers how to be responsible
for the loans. It was also a great way to develop a community among
the borrowers since most of them were women and could relate to
each other’s struggles.
Our reading assignment was an example of how ethics plays a
positive role in microfinance. The group loans empowered the women
because they went through many struggles to obtain their loans.
They had to build up the courage to ask for a loan first. Then from
there they had to get over the fear of the responsibility and
embrace the support of their group. With the group loans, Yunus
also made sure that the women were putting some of the money away
just in case something happened and they needed extra money to help
them through a rough patch. The group could never give out more
than half of what they saved to ensure there was always money
there. Lastly, Yunus established a “center” where about eight
groups in a village met weekly. At these weekly meetings, the women
would bring their children so they could start understanding how
their mothers were making a future for them.
There are many examples of how ethics produces good outcomes but
there are also times when ethics produces unpleasant outcomes. In
“The Stool Makers of Jobra” from Banker to the Poor, Yunus talks
about how the moneylenders charge usurious interest rates to those
who borrow from them. Yunus says, “Usurious rates have become so
standardized and socially acceptable in Third World countries that
the borrower rarely realizes how oppressive a contract is.”. Once
someone decides to borrow money from a moneylender, they get
themselves into so much debt that they can’t get themselves out of
it. This is just one example of how microfinance falls short at
times. I know that our program is one that displays good ethics in
all that we do and I hope to continue to spread the word about what
we are doing in order to prevent borrowers from getting their
selves in a bad situation.
Finance and Risk Assessment Team
Log # 2
By: Sammi Sy
I was so glad having previous GLOBE managers come to our class this
week and shared their experiences on how they succeed in this
class. It was nice meeting them, particularly for those who were
students of 2009 and 2010 GLOBE classes. They amazed me with their
earnestness and dedication to GLOBE. It was already two years since
then, but their enthusiasm made me feel how united they were. Once
you are a GLOBE manager, you are a forever GLOBE manager. The
mission of GLOBE will not just stop at the point when the class
ends because our passion to make a difference will never die and it
will pass on and on.
This was a really great opportunity for us to have a better picture
on what is actually expected from us. The previous finance team had
shared a lot about their entire progress over the semester and how
bits and pieces were put together to create loan applications,
assess risks and determine repayment terms, which all goes
hand-in-hand with one another. Indeed, their suggestions were very
useful in terms of practicality. Getting their advice had
definitely relieved my stress a lot, and I began to feel that I
shouldn’t have placed too much of a burden on myself; I do not have
an obligation to change the world, but just to do the best I can,
even if it only brings a little difference in an individual’s life,
so we might have to make some amendments on our objectives as
setting up realistic goals is way more important than having a
bunch of goals that are unachievable.
Another decision point for this week was to determine the topic of
the group paper, and eventually, we have decided to go with a
social business plan about promoting energy saving in a potential
remote area. Details will be discussed once we have familiarized
ourselves with alternative energy solutions and demand of the area
etc. I actually get really excited with it, particularly after
attending the information session on developing a business plan. In
fact, I was asked to write up a business plan last semester, but it
was only a 3-page paper; so basically it was impossible to get out
there in the real business world. However, it’s going to be a
totally different story for the one that we’ll work on. I’ll
consider this as a “real” business plan because we’re doing it as
if we’re going to implement it afterwards. One thing that the
speaker mentioned was that it would be favorable to work as a team
with each teammate having a different concentration. A team of
three accountants may have wonderful financial statements, yet,
they may mess up the marketing part, so our team definitely has
advantage over it since we’ve got management, risk management,
government and accounting majors. With each of us complementing one
another, I’m confident that we can work our way out of challenges
and create a business plan that belong to us.
Marketing and Fundraising Team
Log # 2
By: Xixi Liu
“Microcredit is a programme for putting homelessness and
destitution in a museum, so that one day our children will visit it
and ask how we could have allowed such a terrible thing to go on
for so long.”
This was one of the first quotes by Muhammad Yunus that I learned
about in GLOBE. Yunus has always been an advocate for poverty
reduction. I agree with Yunus, that charity is not a real answer to
poverty. Charity would only take away a person’s initiative to
break through the poverty cycle. It would create a dependency,
whereas loans would offer them opportunities to prosper. Thus, in
1983 Yunus established the Grameen Bank (Village Bank) in
Bangladesh.
Grameen Bank is a community bank that offers small loans to the
impoverished. Traditional banks didn’t want to take a high
repayment risk, that’s why they weren’t interested in even giving
tiny loans at a reasonable interest rate to the poor. But Yunus
believed that the poor had under-utilized skills and all they
needed was a chance to use those skills. The objective of the bank
was to promote financial independence. As we have mentioned in
class, even the lower class has classifications within it. The bank
focuses its targets on the poorest of poor, placing a special
emphasis on women. It gives out tiny loans to help
borrowers start a business and encourages borrowers to become
future savings account customers so that their capital can be used
for new loans.
Over the years Grameen Bank has expanded and diversified. By 2006,
its branches had been numbered over 2,100. In 2006, Grameen
Bank and Muhammad Yunus also received the Nobel Peace prize for
creating social and economic developments. And over 40 countries
have been inspired to finance microfinance projects similar to
Grameen Bank.
Muhammad Yunus showed that even though everything began with only
an idea, it could prosper and become a successful enterprise. He
went through at lot of struggles to put his plans into action but
to him it was all worth it in the end. He had created a dream and a
possibility for people all over the nation.
And it’s rare and fortunate that I, as a GLOBE student manager, am
also offered the opportunity to not merely talk and think but
actually do.
Technology and Communications Team
Log # 2
By: Moneifa Nance
As I read through the pages of the tenth chapter of “Creating a
World Without Poverty”, I could not help but turn my attention away
from microfinance and towards the effects of global warming in the
world of poverty. As we are distracted by our fancy
technology and luxurious lifestyles, environmental damage is
rapidly multiplying. In this chapter, Yunus drew light to the
devastating effects global warming can have on nations that are
already in poverty. Most nations that are in dire need such as
Bangladesh or even Haiti do not have the infrastructure to
withstand natural disasters that can be caused by this global
warming. Yunus discusses scientific facts that reveal alarming
rates of global temperature increase. This chapter made me wish
that there was more being done to promote awareness about
Environmental Stewardship. So much awareness that would make
consumers think twice about the products they want to
purchase.
Today in class, we received an opportunity to reflect on the
effectiveness and the ethics of microfinance. While there are many
that argue against microfinance, I personally believe that the good
exponentially outweighs the bad. People must understand that
Microfinance is not a tool that will end poverty across the board.
Instead, Microfinance should be viewed as a tool that alleviates
poverty one borrower at a time. It is understood that microfinance
comes with some cons such as high interest rates and lack of
regulation however, we should not disregard the good it has done
and the potential growth for the industry. In our own GLOBE
Microloan program, we are experiencing loan defaults on one hand,
and empowering woman such as Blessing Sunday and helping their
families rise out of poverty on the other. Of course not collecting
payments from the loans we’ve previously issued is a bad thing, but
making a family of five sustainable from just one loan is amazing.
There’s potential for entrepreneurs to receive long-term benefits
from a single loan. When they establish their business and it is
doing well, they will be able to send their children to school and
the benefit continues to trickle down.