Muhammad Yunus, born 1940, is a Bangladeshi banker and the developer and founder of the concept of microcredit, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. Born in Chittagong, Yunus was an a U.S.-educated professor of economics from Chittagong University, who first got into the business of fighting poverty during a 1974 famine in his homeland of Bangladesh, one of the poorest countries in the world. Yunus discovered that very small loans could make a significant difference in a poor person's ability to survive. His first loan consisted of $27 from his own pocket which he lent to women in the village of Jobra-near Chittagong Universty- who made bamboo furniture. They sold these items back to moneylenders to repay usurious loans that they had take out to buy the bamboo. With a net profit of 5 Bangladeshi taka (.02 USD), the women were unable to support themselves or their families. However, traditional banks were not interested in making tiny loans to poor people, who were considered poor repayment risks.

In 1976, Yunus founded the Grameen Bank to make loans to poor Bangladeshis. Since then the Grameen Bank has issued more than $3 billion in loans to some 2.4 million borrowers. To ensure repayment, the bank uses a system of "solidarity groups": small informal groups which apply together for loans and whose members act as co-guarantors of repayment and support one another's efforts at economic self-advancement. As it has grown, the Grameen Bank has also developed other systems of alternate credit that serve the poor. In addition to microcredit, it offers housing loans and well as financing for fisheries and irrigation projects, venture capital, textiles, and other activities, along with other banking services such as savings.

The success of the Grameen model has inspired similar efforts throughout the developing world and even in industrialized nations including the United States. Many, but not all, microcredit projects also emulate its emphasis on lending specifically to women. More than 94 percent of Grameen loans have gone to women, who suffer disproportionately from poverty and who are more likely than men to devote their earnings to serving the needs of the entire family.

Awards

• 1994 - Winner of the World Food Prize
• 1996 - Winner of the Simón Bolívar Prize of the UNESCO
• 1998 - Winner of the Sydney Peace Prize
• 2004 - Winner of The Economist newspaper's Prize for social and economic innovation.

External Links

• Grameen Bank, Yunus's dream
• Yunus's autobiography
• A speech by Muhammad Yunus