Alex Counts, President’s Social Justice Speaker

Thursday night the campus welcomed Alex Counts, the president and CEO of Grameen Foundation, a nonprofit that uses microfinance and technology to help the poor worldwide.  He was the latest speaker in President Steve Emerson’s Social Justice Series, and in his introduction, Emerson pointed out  that “the single greatest barrier to human rights is poverty.”

President Stephen Emerson and speaker Alex Counts

Counts became interested in the poverty eradication work of Nobel Peace Prize- and President’s Medal of Honor-winning Muhammad Yunus while at Cornell. He said  that unlike many of his classmates, he didn’t get energy from opposing social or economic problems; he wanted to offer solutions. “If you apply a micro solution to a macro problem, like poverty, you could grow the solution to be a match for the problem, or at least certain aspects of it,” he said. Yunus, the founder of Grameen Bank, a Bangladeshi bank that offers microloans to his country’s poor, invited Counts to Bangladesh to train under him based on a letter the ambitious student sent him. Thus began a relationship that continues to this day. Counts started Grameen Foundation in 1997 with $6000 in seed capital from his mentor (the Foundation is independent of and unaffiliated with the Bank). It now has an annual budget of $25 million, which it uses to help the world’s poorest, especially women, gain access to small loans, essential information and business opportunities to help them escape poverty.

The world’s poor, according to Counts, are already predisposed to a culture of entrepreneurship given that they need to make money and feed families while living in areas with no jobs or no social safety net. You either work for yourself, or starve, he said. So providing them with small loans to start businesses is only extending credit and offering information within a system that already exists.

Though Counts talked about microfinance in general and shared some of his Foundation’s specific success stories, the crux of his talk was the future of microfinance and how the system has laid tracks that he hopes will carry other humanitarian efforts, big ideas and technology to the doorstep of the poor. “Microfinance has developed an infrastructure for interacting with poor families around the world,” he said, in a way that governments or other aid groups can’t.  “We’ve only just begun to use its capabilities to solve problems,” he said. One such example of ways that the infrastructure of microfinance can better the lives of poor families is with Grameen’s buying power and outreach capabilities. Counts talked about how people in Bangladesh, where malnutrition is a real problem, weren’t planing trees or cultivating their own vegetable gardens because the only seeds they could afford weren’t good. Grameen then bought good saplings and seeds in bulk, and offered them to loan officers who passed them on to clients. Grameen borrowers in Bangladesh now plant more trees and vegetable gardens than anyone else in their country, even the government, says Counts. Grameen is “leveraging its relationships,” he says, to offer its borrowers not just loans but health insurance (by deducting money from savings accounts), solar panels for homes and renewable energy stoves (through its Grameen Shakti subsidiary, which is now the largest residential installer of solar panels in the Third World) and communications (through cell phone and internet initiatives).

Counts did acknowledge that it had been a difficult year for microfinance.  The IPO of SKS, India’s largest microfinance organization, ignited a debate about how much profit a lender to the poor should be able to make. And Bangladesh’s central bank recently ruled that Yunus must step down as managing director of his Grameen Bank (a ruling he is currently fighting in his country’s Supreme Court). But Counts said that such opposition was politically motivated, given that many in government think that poverty reduction should be done by the government. “Poverty alleviation through business is a new idea,” he said. Counts also said that he believes that there are three enduring truths of social justice:

1) an individual has the power to set in motion global change

2) social justice issues reach a certain threshold that is irreversible (“You don’t hear people calling for a return to apartheid or colonialism or slavery,” he said), and

3) people leading these organizations for change are very vulnerable (hence the vilification of Yunus by some).

Economics and microfinance will be the topics of two upcoming campus events. New York Times opinion columnist Paul Krugman will speak on An Economic Perspective on ‘The Mess We’re In’ on March 28, and Jonathan Morduch, an NYU professor who researches microfinance, social investment and the economics of poverty and is also the managing director of Financial Access Initiative, will speak about his book Portfolios of the Poor: How the World’s Poor Live on $2 a Day, on March 29.