Banker To The Poor

I read Banker To The Poor over the last few days. Thanks Mom for lending it to me.

The book is interesting and I think contains some good lessons. However, there are several aspects of it that I take issue with.

First the good stuff:
-It is very impressive to see how the author started from nothing and built this huge organization that does a ton of good.

-I like the focus on serving the absolute poorest people in society. So often there is a focus on helping the middle class. Helping the middle class is nice, but the society's focus should really be on the poor.

-He has a focus on how money tends to get pulled toward the already well off. So it is important to make sure that money intended to help the poor should go directly to the poor.

-There is a decent amount of information about how microfinance works (although this is not a microfinace how to).

-There is some discussion of social entrepreneurship which seems to be picking up significant popularity. And at the end he provides an outline of how socially focused business should be run. Although I do think his suggestion may be a little too utopian.

-In general I liked any portion where he talked about how he built Grameen Bank, but had issues when he made broad comments about the role of government and put down other ways of helping the poor.

Parts I have some issue with (here's me telling a Nobel Prize winner what he got wrong in his book about his career):
-He is very down on the role of government in helping the poor. I can see where he is coming from, but at the same time it was government money and involvement that helped Grameen Bank take off. Sure now that it is able to finance itself it no longer needs government help, but that doesn't mean the government has no role to play in helping the poor or other organizations trying to help the poor.

-Often times he states how little money the loans were that turned people's lives around. But when he converts these numbers to dollars he doesn't relate them to the difference in cost of living. If he was trying to get people from the US to donate money then that's fine to say just $500 will pull this person in Bangladesh out of poverty. But he's not looking for donations, he is talking about a self sustaining bank so I feel like the numbers should be adjust to give a sense of how they big they are to the locals of the country under discussion. There is a portion where he talks about microfinace in the US, but most of the examples are set in Bangladesh.

-He repeatedly makes the case that the poor don't need training, just support (such as credit). He believes that given the opportunity they are entrepreneurs and can figure out how to make money. Clearly this has worked on a large scale for him. But I have to imagine that training has its place. The examples of businesses started for the most part don't sound like something that can expand very much. So it helps pull that person out of poverty, but it probably doesn't provide jobs for the neighbors. But I think that business started by people with more training would have more growth potential. In addition he even has stories of ventures that Grameen Bank started that required getting its staff trained and then training the local workers (such as running the fisheries). So I'll believe that training isn't as important as most people think, but I think he goes too far in putting it down.

-I appreciate that this is his story that he is telling. And he is good at giving credit to people who supported him along the way. But I would have appreciated more context of what else was going on in the world of microfinance over this period (which stretches from the mid 70s to mid 2000s). Did he really come up with the idea and implement it and all other microfinace programs are just based on his work? Or more likely, was there other work in the field and other efforts going on around the same time?

-He talks a little bit about the obstacles along the way, but he focuses heavily on the success. I think it would have been more informative to hear more about the issues he had and how they were over come. In many ways this book felt like a sales pitch.

-Well, it felt like he was giving a sales pitch without having anything to sell. A lot of what I got out of this book is most of what I'd normally try to do to help the poor is no good. And I really didn't see many suggestions on what I should do if I do want to help. Ok, he does suggest starting a company with minimal profit motive, but short of that I sorta feel like he's saying don't bother trying to help. Which doesn't seem right. There must be some middle step.

That's a lot I took issue with but overall I really did like the book and do think the author put some incredible ideas to use to do a huge amount of good.