Microfinance Invades America

If banks were meant to mitigate poverty, not maximize profits, it would change the world, Nobel laureate Muhammad Yunus told viewers in a new documentary film, To Catch a Dollar, which premiered Thursday to a sold-out audience at the Aquarius Theater in downtown Palo Alto.

After all, a $20 loan to a Ugandan village woman could pay for a sewing machine or a milk-producing cow, enabling her business to produce enough income to cover the basic needs of her family. 

But in the U.S., where $20 would barely cover the cost of a modest lunch—and the drive to the restaurant—dour Americans, trying to cope with job loss, looming home foreclosure and allusive college tuitions, are in no mood for fantasies about altruistic financial institutions. 

Besides, Yunus’s Grameen Bank, which requires borrowers to join “collectives” with fellow borrowers and support each other in paying back their loans, is too invasive for Americans, who would rather disrobe in front of an audience than disclose their finances.

So when Yunus decided to take Grameen Bank to the U.S. and boldly open shop in New York, the world’s financial epicenter, the first borrowers were naturally skeptical when the fledgling staff of Grameen America began offering them $1,000-$3,000 loans. Those borrowers had been shut out of the mainstream banking system and had to rely on loan sharks and pay day lenders to get by.

The women in To Catch a Dollar, mostly single mothers living in Queens, had skills and the entrepreneurial drive to get out of poverty. To support their success, Grameen America required each borrower to be part of a group, make a small weekly payment and meet regularly. Alethia Mendez, the Grameen America manager featured in the film and barely more than college age, guided the women and roused the troops when the women lost confidence. Together they had to track each other’s progress and hold each other accountable. 

One Grameen client, Patricia, a Guyanese mother, wife and wedding cake baker, had long dreamed of opening a shop but lacked the seed money to pay for the essential ingredient to run a viable business. With a loan from Grameen America, Patricia was able to buy an industrial mixer and expand her bakery into a storefront in Queens, where she now sells cakes and Guyanese food.

Elizabeth, who emigrated to Queens from the Dominican Republic, envisioned running her own salon one day and working her magic—weaving hair pieces to give her clients fuller, luxurious hair. But caring for her eight children made financial freedom a remote possibility, a common obstacle to ending poverty for poor families that do not practice family planning—an important issue not addressed by the film.

Still, Grameen Bank’s track record gives hope to a new kind of banking in the U.S.  In the 35 years since Yunus began making small loans to poor Bangladeshi women, the microfinance organization now operates in 40 developing countries and issues more than $1 billion in loans every year.

To Catch A Dollar explores microfinance as a solution to ending poverty in America.  For more information about this film and to make a donation to Grameen America click here.