Example 3: The Grameen Bank

The last example I want to elaborate upon concerns the Grameen Bank, the first bank that introduced micro-credits. Professor Muhammad Yunus, inventer of micro-credits at the end of the 1970's and founder of the Grameen Bank in Bangladesh in 1983, was awarded the Nobel Peace Prize for 2006. The idea is that poor people cannot use their potential because initial funds to start a small business are not available to them in standard finance practices. To unleash this potential of the poor both for their own sake as well as for their environments sake professor Yunus invented micro-credits. The idea is that when I want to obtain a micro-credit, a small amount of money that permits me to buy seed, two chickens or a small vehicle for example to start of my business, I need two people who will declare that they trust that I will succeed in the plan I set out to do for which I needed the micro-credit. The witnesses also agree to witness me while I execute my plan. I do not need any other securities, which other banks normally ask. The Grameen Bank has 98% rate of recovery over the nearly 30 years they exist and this is one of the highest in the world. Micro credit has become a concept, which is applied to many sorts of finance, which are driven by a respect for Human Rights that includes the economic situation of people to not be poor. Hereunder I describe the YUTPA of the original micro-credit concept of professor Yunus and how it is based on a careful design of presence and trust.

You: when borrowing micro-credit, the relation with the bank is designed around the relation with two trusted people one chooses one self. These two witnesses declare to have trust in the plan the borrower sets out to accomplish. While executing this plan the two witnesses stay in touch, motivate and monitor how the execution of the plan evolves.

Time: a loan is given for a certain agreed amount of time after which it has to be paid back.

Place: loans are only granted locally, the borrower and the two witnesses as well as the bank all share time and place. They share culture, language and social economic context.

Action: borrowing money and starting to earn money.

Would it be possible for example to create a Grameen Bank by using MSN or any of the business community networks? In game environments virtual objects have gained money value for which they are exchanged. Online markets like E-Bay and online shops are flourishing and make turnovers of billions of dollars. Would it also be possible to invent a credit system that only operates online? How would the organization of trust and liability be arranged? Taking a bank's perspective makes the question even harder. Only when the return on investment is to be expected it will loan money. The Grameen Bank organizes this trust, and therefore its return on investment, locally. It are people who share time and place and who know each other that are allowed to borrow. Banks operate all on a global scale; money has become virtual up to the point that it circles the earth many times before it hits the ground. One would imagine that a virtual borrowing system would be in place by now, but this did not happen so far. When trust functions as hard currency between rich people, money orders can be faxed, phoned and emailed about. Networks of trust and delegation of trust are accessible for people when being rich and having a trusted identity. When trust becomes hard currency that is loaned to poor people, who are to be distrusted money wise, witnessed natural presence is a condition 'sine qua non'.