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June 24, 2005
The Calvert Group Funds Film on Social Entrepreneurs Airing on Public Broadcasting System
    by William Baue

One segment of the film profiles Grameen Bank founder Muhammad Yunus, who pioneered the microcredit model promoted by Calvert Foundation and other community investment advocates.


Last night, the socially responsible investing (SRI) firm Calvert Group hosted an advance screening of The New Heroes, a film it helped fund that profiles 12 "social entrepreneurs," or visionaries who use capital not just to generate more capital but to solve grave social problems. Walking through Harvard Square in Boston afterwards, a man whose face was chiseled with the deep lines that often accompany addiction approached to beg for some change, and I gave him a few quarters. Strangely, I had not tossed coins at the guitarist playing the Eagles' "Hotel California" note for note, or even the Indian man playing a stringed instrument that looked like a sarangi, even though they were at least "working" for their pay.

Muhammad Yunus, the subject of the 17-minute segment shown at the screening and widely considered the "godfather" of social entrepreneurship, had faced such a situation three decades ago and devised a response both similar and radically different than mine. In the early 1970s, Dr. Yunus experienced an increasing disconnect between his university teaching in Bangladesh and the fatal poverty devastating his country, so he visited a village to ascertain its needs.

After talking to a number of villagers, he calculated their combined capital requirements for starting small businesses that could help lift them from poverty, such as preparing rice for market, was $27. Astounded at the meager amount, he loaned them the money immediately out of pocket without worrying over the terms of repayment, reasoning that the incentive to move up in the world was a sufficient guarantee that they would earn enough to return his loan. Thinking structurally, Dr. Yunus approached banks to ask why they were not processing such loans, for which there was clearly a huge market. Lack of collateral was the explanation.

"I saw the conventional banking standing on its head," Dr. Yunus told filmmaker Charlie Stuart. "So I turned it around so it can stand on its feet," he added, eliciting laughter from the Calvert shareholders and Progressive Asset Management financial advisors watching.

In founding the Grameen Bank ("grameen" means village), Dr. Yunus pioneered the microcredit business model on the belief that credit is a basic human right. He revolutionized the world financially and socially, according to the filmmaker, by making small unsecured loans predominantly to women. This choice of recipient sent shock waves through the traditional patriarchal Muslim and Hindu cultures, but Dr. Yunus persisted, reasoning that loans to women are more likely to create long-term benefits to family health and education.

Illustrating the societal transformation wrought by this model, the camera lingers on a shot of three women draped in burkas followed by a man tenderly carrying a child. An equaling moving shot depicts a room filled with 500 Grameen loan officers who service more than a hundred thousand loans in the Chittigong region of Bangladesh alone, a truly astounding number.

In the question-and-answer session following the film, a woman asked Mr. Stuart, who co-produced the film, why all the bank officers seemed to be men. With the loans going to women, perhaps Dr. Yunus wants to balance out between the sexes the benefits created by Grameen, Mr. Stuart responded, raising another round of laughter. Returning to a more serious mode of response, he admitted that he did not know the reasons behind this apparent disequilibrium, but he did note that that same scene depicts a female Grameen employee receiving an award.

The film provides balance by briefly addressing criticisms leveled at microcredit, primarily its high interest rates and the fact that it does not reach the poorest of the poor. In the film, Dr. Yunus admits that microcredit is not the panacea for poverty, but merely one effective tool in combating a problem beyond the scope of a single method to solve.

Michael Drane of the Calvert Foundation, a separate nonprofit created by Calvert to promote community investment, addressed the question of mid-term interest rates by comparing it to the only other options available to the impoverished, loan sharks charging 100 to 200 percent rates.

As for reaching the poorest of the poor, the film segment ends by focusing on a new Grameen loan program geared toward beggars. Returning to his roots, Dr. Yunus is not setting any terms for repayment, but rather allowing them to repay as they are able, on the theory that this responsibility will inspire them to fulfill their obligation. The film, a production of Oregon Public Broadcasting (OPB) airing on Public Broadcasting System (PBS) nationally on Tuesdays June 28 and July 5 from 8 to 10 pm, interviews several beggar women who express gratitude for the opportunity to bootstrap themselves out of poverty.

 

 
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