Free Banker to the Poor by Muhammad Yunus, Alan Jolis Page B

recovered, but the beatings and the life of semistarvation continued.
    In 1974, a village leader intervened and arranged for a divorce. Mufia was then free from her husband's beatings, but starvation followed her into her new life. She began begging. She begged in the rich neighborhoods of Khaiachara and Mithachara villages. An entire day's begging would yield a few ounces of rice, hardly enough for her and her three children (after her son, she had two daughters, and she also looked after a nephew who was an orphan). One day she was begging from a woman who had a home-based business making baskets, mats, and other items from bamboo. She asked Mufia if she would want to borrow fifteen taka from her to buy some bamboo and sell it in the market. Mufia agreed, made a ten taka profit, and repaid the loan. With the ten taka, she bought some food for her family. This was repeated a few times over the next few years, but after a while the woman stopped giving Mufia loans and she was forced to become a full-time beggar again.
    Mufia starved through the famine of 1974 and her makeshift house was destroyed in a storm in 1978. But in 1979, she joined the Grameen Bank and borrowed 500 taka to restart her bamboo business. When she paid back her first loan, she felt like a new person. Her second loan, received on December 25, 1980, was for 1,500 taka. Although she sometimes missed installments during the lean season when demand for bamboo products was low, she always caught up when the economy improved after the rice harvest.
    During her first eighteen months as a Grameen Bank member, Mufia was able to buy 330 taka worth of clothing for herself and her children and cookware for 105 taka. These were luxuries that she had not had since she was divorced from her husband fifteen years earlier. She and her children were also eating more regularly and more nutritious food. Meat was never an option, but vegetables were more common, and occasionally she bought dried fish in the market as a treat.
    Mufia is one of thousands of former beggars who are now living a dignified life because they were able to access loans from Grameen Bank. To help inexperienced borrowers like Mufia, we have always tried to simplify our lending operations. Today we have distilled our repayment mechanism to the following formula:
     
 
Loans last one year.
     
Installments are paid weekly.
     
Repayment starts one week after the loan.
     
The interest rate is 20 percent.
     
Repayment amounts to 2 percent of the loan amount per week for fifty weeks.
     
Interest payments amount to 2 taka per week for every 1,000 taka of the loan amount.
     
    As for the repayment mechanism, I decided that we should keep it as simple as possible. I felt that the transaction should be local, and so in Jobra village I went to visit the pan (betel leaf) seller in his tiny stall in the middle of the village. A small man with a toothy grin and unshaven face, he kept his shop open day and night, and he knew just about everyone in the village. Certainly everyone knew him. When I suggested that he be the collection point for Jobra, he was enthusiastic. He did not ask for any fee. We told the borrowers that every day as they cross the road or go about their ordinary business, they should simply give their daily installment to the pan seller.
    This proved to be a short-lived experiment. Borrowers claimed they had paid their daily installment, and the pan seller said they had not.
    "Don't you remember?" a borrower would say. "I came at midday. I bought some pan from you. I gave you five taka, and when you gave me my change I told you keep my installment of loan repayment. Don't you remember?"
    "No, you didn't give me five taka."
    "Yes, I did. I remember it very well."
    "No, you paid me with a bill and I gave you back full change."
    Arguments were unending. I knew we had to simplify the procedure. So I bought a notebook, and on the left I wrote each borrower's name. In the center I made three columns