Economist, Grameen Bank Founder, Nobel Prize Laureate
My experience working in the Grameen Bank has given me faith; an unshakable faith in the creativity of human beings. It leads me to believe that humans are not born to suffer the misery of hunger and poverty
Muhammad Yunus is a Bangladeshi banker, economist and Nobel Peace Prize recipient. He previously was a professor of economics where he developed the concepts of microcredit and microfinance. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. Yunus is also the founder of Grameen Bank.
“The current financial crisis makes it very clear that the system that we have isn’t really working, and this is the right time for us to undo things and build them in a new way”
In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below." Yunus himself has received several other national and international honors. He is the author of Banker to the Poor and a founding board member of Grameen America and Grameen Foundation.
Yunus also serves on the board of directors of the UN Foundation, a public charity created in 1998 with entrepreneur and philanthropist Ted Turner’s historic $1 billion gift to support United Nations causes. The UN Foundation builds and implements public-private partnerships to address the world’s most pressing problems, and broadens support for the UN.
In simple terms, a Grameen social business a non-loss, non-dividend company dedicated entirely to achieve a social goal. In social business, the investor gets his/her investment money back over time, but never receives dividend beyond that amount. The Grameen Bank is a prime example of social business, with poor people being its shareholders.
Muhammad Yunus’s vision is the total eradication of poverty from the world. 'Grameen', he claims, 'is a message of hope, a program for putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long'.
This work is a fundamental rethink on the economic relationship between the rich and the poor, their rights and their obligations. The World Bank recently acknowledged that 'this business approach to the alleviation of poverty has allowed millions of individuals to work their way out of poverty with dignity‘. Credit is the last hope left to those faced with absolute poverty. That is why Muhammad Yunus believes that the right to credit should be recognized as a fundamental human right.
Grameen Bank has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable.
“My experience working in the Grameen Bank has given me faith; an unshakable faith in the creativity of human beings. It leads me to believe that humans are not born to suffer the misery of hunger and poverty”
Professor Muhammad Yunus, Managing Director of the bank, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder."
As of May, 2010, it has 8.25 million borrowers, 97 percent of whom are women. With 2,564 branches, GB provides services in 81,360 villages, covering more than 97 percent of the total villages in Bangladesh.
Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).
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