MUHAMMAD YUNUS

International Center for Microfinance and Social Business

Who is Muhammad Yunus?

Prof. Muhammad Yunus

In 1974, Professor Muhammad Yunus, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village.

They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.

Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of $27 to 42 basket-weavers.

He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiativeand enterprise necessary to pull themselves out of poverty. Against the advice of banks and government, Yunus carried on giving out 'micro-loans', and in 1983 formed the Grameen Bank, meaning 'village bank' founded on principles of trust and solidarity.

In 2006 Yunus and Grameen received the Nobel Peace Prize "for their efforts through microcredit to create economic and social development from below".

Prof Muhammad Yunus has also introduced a new dimension for capitalism with the idea of social business.