Educator, Banker, Economist (1940-Present)
Muhammad Yunus founded the Grameen Bank, which provides micro loans and credit to poor people in Bangladesh. He won the 2006 Nobel Peace Prize for his efforts in the field of poverty reduction.
Yunus began by providing personal loans of small amounts to destitute basket weavers so that they could support themselves. Eventually he sought further support from banks in Bangladesh and established the Grameen bank in 1983.
Micro finance can be an essential tool for the poor to break free from the poverty cycle by obtaining funds to set up their own business. It can be particularly helpful for the most vulnerable in society; significantly, many of the bank’s customers are women.
The micro loans offered by Grameen bank are peer governed, that is, the peers of the borrower must ensure the money is repaid. This system of micro finance caught fire and spread across many developing countries. Before Yunus’ idea, banks were reluctant to lend to poor people because of the high chance of default.
Although it does have the potential to help eradicate poverty, micro finance has been criticised for leaving the poor in debt.
“Once poverty is gone, we’ll need to build museums to display its horrors to future generations. They’ll wonder why poverty continued so long in human society – how a few people could live in luxury while billions dwelt in misery, deprivation and despair.”
– Muhammad Yunus