When Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize in 2006, it signaled a new turn of events: finance had become a globalized process involving not just economically developed countries but also economically developing countries and their common citizens as well. Founded in 1976 as a research project, the Grameen bank was just an experimental possibility of bringing a credit and banking system to the rural poor of Bangladesh. Yunus probably had no idea his system of microfinance would spread to over twenty countries throughout the world, affecting and improving the lives of many in developing countries in Asia, the Americas, and Africa. The microfinance system of the Grameen Bank reflects both the positive evolution of globalization and the potential formation of a new transnational identity within poorer countries like Bangladesh.
Three aspects of globalization have enhanced the success of microfinance: the advancement of transportation and communication, international economic development, and cultural amalgamation. Globalization attributes itself heavily to the exponential evolution of technology: the improvements in transportation and communication have both brought the entire world not only more connected but closer as well. The internet has allowed for the spread of information to the point that the FBI and other government agencies often attempt to intercept what information is available to the public (the Supreme Court case on the First Amendment and the Kansas church’s internet postings reflects the controversies available information online poses). Nevertheless, the information available on the internet allowed for Yunus and other researchers to be able to develop ideas about how to fund and start a microfinancing program as well as spread their ideas throughout the world; the online age provided them the tools to not only study economically developed countries’ credit systems but to also keep in touch with current situations back in Bangladesh in order to customize the credit and banking system to fit the needs of Bangladeshis.
Growing economic interdependence also aided Grameen Bank’s founders in analyzing the requirements of microfinance: by understanding the changing times, Yunus and others realized the need to begin a Westernized credit system that involved more than village-to-village or family-to-family borrowing, one that attached people to the international economic system. By starting off small and slowly expanding, people could gradually adjust to the international economic system. In addition to economic globalization, the microfinance system was promoted by cultural support as well. The suggestion of a better standard of living derived from the improvement of the economy as well as transportation and transmission; a change of culture, therefore, is necessary. While previously most of these rural-area citizens were used to a male-dominant and highly corrupt society, now they have an opportunity to adapt more capitalist ideals. The new microfinance system gave that opportunity as the Western idea of a credit system was introduced. Also, as people assimilated to these new changes, a better economy with more freedoms allowed for people to purchase better-quality and foreign goods, often with a Western influence like televisions and Spiderman backpacks and also more democratic ideals such as putting all children in school. English also begins to trickle down from a primarily upper class second language to a more universal language, even in rural areas due to higher education opportunities for children. As people gain more economic, social, and even political prospects from microfinance, they also are able to join the international process of globalization. Thus, improvements in transportation and communication, economic developments, and cultural amalgamation are all crucial factors towards this development.
Microfinance stemmed from ideas catalyzed by globalization but also fostered the potential for a new transnational identity in its participants, particularly in women. In general, the Grameen Bank is a non-governmental organization (NGO) that has helped bring awareness of the economic state of many developing countries; it has proved its autonomy through independent funds and also offers a bridge between constituents and governments through its works with national governments like those of Bangladesh. Instead of fostering disenchantment for the national governments, the Grameen Bank has surprisingly supported them and attempted to help them further aid their citizens. Constituents are offered a new opportunity through the Grameen Bank, one that allows for them to overcome poverty and develop a better standard for their lives. Women (participating in the programs of the Grameen Foundation) in particular have seen a huge change in their social and economic standing because of the Grameen Bank. An interesting demographic note about the Grameen Bank is that the overwhelming majority of borrowers are women, Muslim women especially [i] . The Grameen Bank has enabled women who normally are not able to have such economic and social powers to slowly gain standing and equality with men in their communities; because the loan is written in the woman’s name, she has more say and her husband must rely on her to successfully accept the transaction. Also, these greater opportunities also give these women a new chance for knowledge, not just about society but also about finance and investments; in addition, their children will be able to go to school and get a better education. As this cycle continues, there will be more well-educated people among their societies that will be able to better the standard of living for the community as a whole. These women become part of a bigger society and a bigger ideal than just their villages; there is international support for them from other women and activist groups. Perhaps in the future, these microfinance participants can recognize themselves as part of a transnational identity of women as they vie for more political power within their communities; they will not just be leaders within their own society but will also be an example for women outside of the microfinance system too. By breaking out of the former norms of their society, these women are changing their identities and allowing for a more globalized potential to alter who they consider themselves to be in respect to their changing community. Because of microfinance, many women and their families are able to better their lives and also slowly build a transnational identity.
Due to globalization and its various positive effects, microfinance has been able to thrive and even potentially help to create a new transnational identity within its participants. Women and their families are given new opportunities to better themselves and become more active on in the global realm; all participants are able to benefit as standards of living improve and education becomes more accessible. As cultures and economies evolve and slowly mix together, identities will be questioned, changed, and accepted. Technological advances offered the catalyst that spurred globalization which allowed for organizations like the Grameen Bank to find the information in order to foster an idea that would revolutionize lives for those living in developing countries. Indeed, the Nobel Peace Prize bestowed to Yunus and the Grameen Bank in 2006 was but one small thanks for a maverick and brilliant system that gave opportunities to people who would have otherwise never had the chance to experience globalization.
[i] This is due to a trust theory the Grameen Bank adopted that believed women were more likely to pay their debts. It appears this worked because the Grameen Bank has had an extremely successful return.