Expotential Gains from Small Starts
The idea of giving money to people has always give us a warm sense of humanity especially for those in need. It is important to know that even giving a little to someone in need could provide surprising results. When Muhammad Yumus decided to give $27 to the poor people in Bangladesh to get avoid the cruel penalties of loan sharks, he didn't know he was doing a form of increasing returns. $27 in America is not a substantial amount to an individual but to the people in Bangladesh it is what we would consider a workers wage for a certain amount of time. However it must be taken into mind that unemployment and famine was happening during the 1970's. So it was hard to find/earn any kind of money especially of that amount without any type of loan.
Muhammad Yumus saw that when he had given the money to the poor people, it allowed them to kind of work for themselves and be somewhat independent. Yumus wanted to do this on a much larger scale, so he talked to the banks at the time to give out loans to the poor people. The Bank culture in Bangladesh in the 70's was not used to giving money to poor people. However once the loans were given out, the poor people were able to again work for themselves on a much larger scale. This in turn allowed more and more people to borrow(work to earn the money), and pay it back due to the previous people doing the same thing. Eventually the "poor" people were the ones to "own" the banks. This all started from the few small loans and eventually grew to a wide mass of people borrowing money and paying it back.
Smallest Human Capital
I also liked Yumus' part on just giving money to the poorest of the poor people for a set period of time. Giving to the people who need it mostwould to a majority of people seem to be a good idea. And it is not only financially and spiritually but also in a knowledge state of mind as well. Think about it, a final product just doesn't start from the middle man of assemblign and ends at the end with a associate selling to the customer. No it starts from the very beginning of the idea of the product. The idea comes from the person and starts the whole process of becoming a product and the rest is history. It is kind of the same idea for the people in Bangladesh. For the economy on the whole, the person at the bottom of the "economic ladder" is essentially the largest group. However that group is disregarded because they are not considered important and thought they wont' have any kind of affect on the ladder as a whole. Well give these people a chance(loans, information, education, knowledge) they will eventually band together and make something great. It goes to show that even the smallest thing has an affect on the entire chain as a whole. No matter the size.
Better than the Previous
Another highlight I enjoyed the the presentation is the idea of always being better than the previous. Yumus used the idea of parents and their children. In the past, parents of poor nations did not know how to read and write and were very uneducated. All they really knew how to do was work backbreaking labor intensive jobs, have kids to help with the jobs and repeat the process in which they were kind of stuck in these cycle. With the parents becoming less dependent on backbreaking labor and not requiring as much help from others, the children are allowed to attend school and better themsevles.
Well it is kind of the same thing with any kind of product, process, idea within any for profit business. For example, a company makes a certain kind of cellphone which in the first of it's kind. Well the 2nd generation or sequal of this phone should be better than the 1st generation and other imitators that happen to apear in the market. It humbles us a humans to allow the future geneations to be better than us. While products/services/ideas can not have the feeling of being humble, the peopel who created the first generation of whatever would want the second generation to be even better.
Sources:
http://www.youtube.com/watch?feature=player_embedded&v=LJvoSHdGgoA
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