An Inspiring Model
The initiator of micro-finance, Dr. Mohammad Yunus, revolutionizes development and poverty alleviation.
Lives of great men all remind us, we can make our lives sublime. - Longfellow.
One such life is that of the founder of Grameen Bank in Bangladesh. Nobel laureate Mohammad Yunus, whose unique concept of microfinancing thrust Bangladesh into the international limelight. He was born in 1940 in Chittagong and after finishing his M.A. in Economics from the Dhaka University, he became a lecturer at the Chittagong College in 1961. In 1969, Yunus received a Ph.D. in economics from Vanderbilt University on a Fulbright scholarship after which he joined the Middle Tennessee State University as an assistant professor of economics.
In 1972, he returned to Bangladesh and was appointed at the Planning Commission. But perhaps the slow pace of activities under the government did not suit his dynamic spirit; he resigned and joined Chittagong University as head of its Economics department. Keen on economic reform to improve the lives of the common people, he developed a Nabajug (New Era) Tebhaga Khamar (three share farm) in 1975. However, it was in 1976, during his visit to the poorest households in the village of Jobra, when Yunus discovered that very small loans could make a disproportionate difference for a poor person.
Jobra women made bamboo furniture with usurious loans to buy bamboo. Yunus lent about US$42 out of his own pocket to 42 women in the village, who each made a net profit of US$0.02 on the loan. This became the very foundation of the worldwide phenomenon known as Grameen Bank. Yunus believed that if given the opportunity, the poor will repay the borrowed money and hence microcredit could become a viable business model.
Encouraged by his experiment, Yunus launched the Grameen Bank Project with loans from the government’s Janata Bank and other commercial banks. By 1982, the bank had 28,000 members. On 1 October 1983, the pilot project began operations as a full-fledged bank and was renamed the Grameen Bank (Village Bank) to make loans to the poor. Today, 8.3 million women make up the bulk of its shareholders
Behind this project was Yunus’s objective to help poor people escape from poverty by providing loans on suitable terms and teaching them a few sound financial principles so they could help themselves. But it was not easy sailing. In the beginning, Yunus had to face the wrath of leftists as well as the orthodox clergy who told women that they would be denied a Muslim burial if they borrowed money from the Grameen Bank
However, the success of the Grameen model of micro financing has inspired similar efforts in more than 100 developing countries worldwide. Today, the Grameen initiative has grown into a multi-faceted group of profitable and non-profit ventures and equity projects like Grameen Software, Grameen CyberNet, Grameen Knitwear and Grameen Telecom.
Dr. Yunus has amassed a formidable collection of awards, prizes and honors from all over the world. These include 50 honorary doctorate degrees from universities across 20 countries, 113 international awards from 26 different countries besides state honors from 10 countries, commencement speeches and lectures at various universities in the USA and UK, such as MIT and Oxford; mentions by Fortune Magazine as being among the greatest entrepreneurs of the current era, by the New Statesman among “The World’s 50 Most Influential Figures 2010,” by Foreign Policy magazine, among “the most desired thinkers the world should listen to,” the Prospect Magazine in its 2008 global poll of the world’s top 100 intellectuals, and by Time magazine as one of the top 12 business leaders.
The inventory of his awards includes: Mohamed Shabdeen Award for Science, (Sri Lanka); Humanitarian Award, (CARE, USA); World Food Prize, King Hussein Humanitarian Leadership Award; Volvo Environment Prize, (Sweden); Nikkei Asia Prize for Regional Growth; Franklin D. Roosevelt Freedom Award, and the Seoul Peace Prize; Ramon Magsaysay Award; the International Simon Bolivar Prize; the Prince of Asturias Award for Concord; the Sydney Peace Prize; Dwight D. Eisenhower Medal for Leadership and Service and the prestigious Presidential Award from the University of Illinois at Urbana-Champaign.
Dr. Mohammad Yunus is “one of only seven persons” to have won the Nobel Peace Prize, as well as the Presidential Med- al of Freedom and the Congressional Gold Medal. He also sits on the Board of the UN Foundation, Schwab, Prince Albert II of Monaco Foundation, Grameen Credit Agricole Microcredit, and Foundation Chirac’s honor committee.
However, in November 2010, a Danish documentary accused him and Grameen Bank of diverting Tk7 billion given by the Norwegian Agency for Development Corporation (NORAD) to another organization. Though NORAD published an official statement clearing Yunus and Grameen Bank from any wrongdoing, the Bangladesh media hyped the fabrication. Meanwhile, because Prime Minister Hasina perceives Yunus as a potential political rival, ever since he toyed with the idea of launching a political party in 2006, the government launched an investigation into all Grameen Bank projects in January 2011. It even denounced the concept of microfinance as “sucking blood from the poor.” On the other hand, when Taslima Begum, a housewife turned entrepreneur, accepted the Nobel peace prize for Grameen Bank, she said, “My parents gave me birth, but Grameen Bank gave me a life.” Taslima had used her first Tk1500 loan to buy a goat in 1992 and now she is an elected director on Grameen’s board.
Several international leaders, including UN High Commissioner for Human Rights, Mary Robinson, stepped up efforts to defend Yunus through a network of supporters called “Friends of Grameen.” Even though Hillary Clinton and John Kerry issued an official statement expressing support for him, pending investigation, the government removed Yunus from his office as Grameen Bank Managing Director and on 8 March 2011, the Bangladesh High Court confirmed his dismissal.
Yunus has appealed against the decision but without the Bank, he is as desolate as a mother whose baby has been wrenched away from her. Today, the rural poor borrowers own 90% of its shares; the government 10%. A government takeover will mean a requiem for the fine institution Yunus has affectionately nurtured with his sweat.