Investing in the Poor

Most people believe that the world of finance has no concern for the little guy, for all the low- and middle-income people who, after all, contribute little to the bottom line.

Today’s huge companies and the financial wizards who lead them – or buy and sell them – may be generous to their churches, favorite charities, and families and friends, but their professional lives are defined solely by the relentless pursuit of profits.

That perception may be largely true, but not entirely so. Consider Muhammad Yunus, who won the Nobel Peace Prize last October. His Grameen Bank, founded in 1976 in Bangladesh, has offered tiny loans to some of the poorest people in the world, helping to lift many borrowers out of poverty. The Bank made a profit and grew over the years – and has inspired similar microcredit schemes elsewhere.

But was money Yunus’s ultimate motive? In interviews, he reveals that he was actually motivated by a deep sympathy for the plight of the poor in his country. His goal of building a profitable lending business seems to have reflected his desire to believe in the trustworthiness of his clients. He tried to make a profit in microfinance in order to prove these neglected people’s creditworthiness, so that he could continue lending to them.