Banker to the Poor
Banker to the Poor

The Council Salutes Muhammad Yunus, Winner of the Nobel Peace Prize

Oct 13, 2006

Muhammad Yunus and the organization he founded, Grameen Bank, were awarded the Nobel Peace Prize today. They pioneered microcredit loans—small loans extended to those too poor to qualify for regular bank loans—which are helping millions to help themselves. "Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development,'' said the Nobel committee in its announcement.

Dr. Yunus was born in Chittagong, Bangladesh, the business center of what was then eastern Bengal. Awarded a Fulbright scholarship to study economics at Vanderbilt, he returned home after receiving his PH.D, and became head of the Economics Department at Chittagong University. He was appalled by the Bangladesh famine of 1974 and by the desperate conditions in the village next to the campus. Investigating further, he found that it was impossible for villagers across Bangladesh to climb out of poverty. No bank was willing to offer them loans without guarantees, which were impossible for them to provide.

So in 1983, against the advice of banking and government officials, he established Grameen, a bank devoted to providing poverty-stricken Bangladeshis with very small loans. The Bank's first transactions were loans to about forty people, worth a grand total of around $27; the money came from Yunus's own pocket.

Since then, Grameen (the Bengali word for village) has disbursed $5.72 billion in small loans and has a loan recovery rate of 98.85 per cent. The majority of the recipients are illiterate women, who have used the money to buy cows, chickens, or seeds to plant crops, or as capital to start small businesses. Grameen is now one of the world's largest microcredit lenders and it has inspired similar programs in over 100 countries from Africa to Latin America, and even in some of the inner cities in the United States.

"There is no doubt that Dr. Yunus is a bona fide visionary, and living proof that some people do make a difference", said Joanne Myers, Director, Public Affairs Programs in 1999, when Dr. Yusuf gave a rousing and unforgettable speech at the Council.

We at the Council congratulate Dr. Yunus and urge everyone to read his inspiring autobiography, Banker to the Poor: Micro-Lending and the Battle Against World Poverty.

The Council is dedicated to giving a voice to innovative ideas for creating a fairer world. In particular, see our online magazine, Policy Innovations.

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