How To Eradicate Poverty

[Ankesh]

Thanks Steve.

That someone is Muhammad Yunus. He is from Bangladesh. He started the Grameen Bank. Which has been modeled by a lot of other countries now.

And the bank had 98% rate of loan payback because Muhammad gave out loans only when people who wanted money grouped together.

The groups added to peer pressure - the groups made sure that each member paid their loans on time. And each person worked hard. The group also worked as a mastermind - helping a member with difficulties.

So it wasn't just micro-financing. It was micro-financing + groups that did that trick.