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Muhammad Yunus was recognized a year ago with the Nobel Peace Prize for his work with microlending to the beggars of his native Bangladesh.

But Yunus knows Arkansas’ poor as well.

Yunus came to Arkansas in 1986 at the request of then-Gov. Bill Clinton to give Arkansas guidance about microfinancing and the poor, Elgin Clemons of the Little Rock law firm of Wright Lindsey Jennings, said in introducing Yunus at the Little Rock Regional Chamber of Commerce’ annual Fortune 500 luncheon Monday.

From that trip came what is the Southern Good Faith Fund, a division of Southern Bancorp, Yunus, 67, said. The fund, which is based in Pine Bluff and has offices in Little Rock and Helena-West Helena, assists low-income residents of the Delta.

“I have gone through small towns all over Arkansas so I am very familiar with Arkansas,” Yunus said.

Yunus is in the United States to promote his Grameen America program. Grameen already has started a pilot program in Queens, N.Y., and wants to open a microlending bank in the rural South, said Clemons, who is Yunus’ lawyer on the Grameen America project.

Since Yunus already was going to be in the South, Clemons asked him to speak at a Chamber of Commerce luncheon.

Yunus has made no decision on where the Southern Grameen institution will be, Clemons said after the luncheon.


Yunus’ economic policy centers on helping the extremely poor recover financially by making tiny loans. His Grameen Bank has loaned as little as a dollar to beggars in Bangladesh. Women make up 97 percent of the borrowers. Loans, which are made with no collateral, are repaid in full 99 percent of the time, Yunus said. Bangladesh, which has a population of about 150 million, became a nation in 1971 when what had been known as East Pakistan seceded from Pakistan.

Conventional banks in Bangladesh do not make such small loans. Banks in the United States typically do not make loans of even a few hundred dollars and none would do so without any collateral, which Grameen Bank does not require.

But Yunus said he believes the concept of lending to the very poor can work in Arkansas or anywhere else. The Good Faith Fund helps families buy houses, start businesses and go to college, said Angela Duran, president of the fund.

When the fund started, it had a microlending model that made loans to the very poor, Duran said. That continued for about 10 years, Duran said.

“In the end we were not able to make it work for financial reasons,” Duran said.

Even though the nonprofit organization could not continue to make the relatively small loans, its parent company, Southern Bancorp, a for-profit bank company, took over the program.

Southern Bancorp makes loans through its banks in Arkadelphia, in Helena-West Helena and in Mississippi, said Phil Baldwin, chief financial officer of Southern Bancorp.

The bank has no minimum loan, unlike most other banks.

“We make hundreds of loans a month [of less than $1,000],” Baldwin said. “To my knowledge, we’re the largest microlending bank in the country. We have $30 million to $40 million in microloans. And all of that did start with [Yunus] coming to Arkansas in the 1980s.”

Yunus received his doctorate of in economics from Vanderbilt University in 1969. He later taught at Middle Tennessee State University for three years before returning to Bangladesh to teach economics at Chittagong University in 1972.

“The one thing that makes [Yunus] so powerful and special was that he had the vision and the heart to understand what it means to be poor,” Clemons told the crowd of about 140 at the Little Rock Hilton. “It is humiliating to be hungry. It is humiliating to not be able to care for yourself. It is even more hurtful to watch your parents with three jobs not be able to do it, still. And it is very hard at those moments not to believe that your self-worth is wrapped up in your materialistic circumstances.”

“He has seen poverty in its most extreme form, death,” Clemons said. “One of the most unforgivable forms of death is starvation.”

It was that environment that prompted Yunus to consider how to help the poorest in Bangladesh, which was suffering a severe famine.

He began by doing research in a village to determine the poorest people there. Forty-two of them had borrowed money from loan sharks and could not repay the loans. Yunus asked what they owed and found that it was only $27.

“I had this brand-new Ph.D. from Vanderbilt, but I had no idea what goes on in anybody’s village,” Yunus said. “None of this was in the classrooms or in the textbooks. But I thought I could do something about it. One way was to give that money from my pocket. Then they could return the money to the moneylenders and they would be free.”

When he returned to the village, the people looked at him differently, Yunus said.


“They looked at me as if I was an angel from heaven,” Yunus said. “So I thought, if it only takes $27 to become an angel, don’t you want to do more of it? It would make so many more people so happy.”

Grameen Bank now has about 7.5 million borrowers in almost 80,000 villages in Bangladesh.

The women borrowers take “tiny little loans and with them become self-employed and change their lives,” Yunus said.

Four years ago Grameen Bank started a program of loaning money to the beggars in Bangladesh.

“One cannot be poorer than a beggar,” Yunus said.

Grameen Bank has made loans to about 100,000 beggars. It also gives the beggars toys, cookies and candy they can sell to people to as they go house to house begging, Yunus said. Some have become personal shoppers for families in Bangladesh, Yunus said.

Yunus said more than 10,000 of the beggars have quit begging completely.