There have been numerous books written about financial health and credit, topics that are extremely important to what we do here at LendUp. I’ve heard folks around the office say they’ve recently been inspired by books like Lisa Servon’s “The Unbanking of America,” Jonathan Morduch and Rachel Schneider’s “The Financial Diaries,” and J.D. Vance’s “Hillbilly Elegy.” But one book in particular inspired our CEO Sasha Orloff’s idea for LendUp. And, it continues to inform the products we build, including the original concept for the LendUp Ladder, our solution to the debt trap cycle for the 56% of America that lacks access to traditional financial services. The book I’m referring to, which was given to me on my first day here at LendUp, is “Banker to the Poor” by Muhammad Yunus.
Yunus, a Nobel Peace Prize winner and founder of the Grameen Bank, had a vision of eradicating poverty, and developed a system for doing so that informed his book. Yunus wrote about creating an even playing field for people both poor and rich, and built the Grameen Bank nearly 35 years ago to provide micro credit to some of the poorest people in the world. He describes the bank’s system as a highway that borrowers may use, with flexible options that allow them to speed along, slow down, or even exit the highway as needed. In “Banker to the Poor,” Yunus encourages micro-credit programs to simplify life for their borrowers by building flexible options, rather than burdening borrowers or forcing them into debt cycles with predatory traps.
Yunus tested his system in Bangladesh, which has yielded a 99.6% repayment rate on over $4.7 billion in loans. He created the opportunity for millions of people to take control of their future through their own will and creativity. And he acknowledged the importance of a person understanding they can take care of themselves.
In one chapter, Yunus wrote about Sufiya Begum, who made bamboo stools for a living -- stuck in a cycle of poverty and trapped in a system where credit was used to exploit borrowers rather than provide opportunity for growth. Yunus built Grameen Bank to give people like Sufiya the tools they needed to build a life for themselves.
Yunus envisioned that 100% of the bank be owned by its borrowers, and to this day the bank has been able to maintain ownership of 93% of the bank’s equity for borrowers and other stakeholders. One of the most inspiring pieces of Grameen bank’s story for me, is that -- based on the system Yunus built -- the bank has been profitable in every year of its existence except for three.
The LendUp Ladder was built to fulfil the mission of providing anyone with a path to better financial health, and principles of the Grameen Bank are at our foundation. And I’m proud to be a part of LendUp, which forms a part of this ecosystem by using technology to increase access to fair credit across the United States. Yunus’ work has shown how credit can change people’s lives -- allowing them to purchase property or finance their education. For LendUp’s part, we’re able to help people in need of access to credit cards, loans, and emergency funds -- like cash to change a tire so a borrower can get to work, or so they can pay an unexpected doctor bill. In fact, we have lent over $1 billion, saved borrowers nearly $130 million in fees and interest, and helped many people and families take control of their financial situations, just as Yunus taught. I see it every day as part of the customer insights team, when I speak to customers about how LendUp has helped them better their situation.
In summary, I’d encourage you to check out “Banker to the Poor” and other books on financial inequality, and think about how you can be a part of this movement to help Americans get on a path to better financial health. And if you want to come work at LendUp, check out our careers page -- we’re hiring!
Rob Carter is a member of LendUp’s Customer Insights team, based in Richmond, VA.