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Muhammad
Yunus, Founder
of Grameen Bank
Nobel
Prize Winner 2006
Muhammad
Yunus (born Jun 28, 1940) is a Bangladeshi banker
and economist. He previously was a professor of
economics and is famous for his successful application
of microcredit; the extension of small loans.
These loans are given to entrepreneurs too poor
to qualify for traditional bank loans. Yunus is
also the founder of Grameen Bank. In 2006, Yunus
and the bank were jointly awarded the Nobel Peace
Prize, "for their efforts to create economic
and social development from below." Yunus
himself has received several other national and
international honors. He is the author of Banker
to the Poor and a founding board member of Grameen
Foundation. In early 2007 Yunus showed interest
in launching a political party in Bangladesh named
Nagorik Shakti (Citizen Power), but later discarded
the plan. He is one of the founding members of
Global Elders.
Early
years
The
third oldest of nine children, Yunus was born
in June 28, 1940 to a Muslim family in the village
of Bathua, by the Boxirhat Road in Hathazari,
Chittagong, then in British India (now in Bangladesh).
His father was Hazi Dula Mia Shoudagar, a jeweler,
and his mother was Sofia Khatun. His early childhood
years were spent in the village. In 1944, his
family moved to the city of Chittagong, and he
was shifted to Lamabazar Primary School from his
village school. By 1949, his mother was afflicted
with psychological illness. Later, he passed the
matriculation examination from Chittagong Collegiate
School securing the 16th position among 39,000
students in East Pakistan. During his school years,
he was an active Boy Scout, and traveled to West
Pakistan and India in 1952, and to Canada in 1955
to attend Jamborees. Later when Yunus was studying
at Chittagong College, he became active in cultural
activities and won awards for drama acting. In
1957, he enrolled in the department of economics
at Dhaka University and completed his BA in 1960
and MA in 1961.
Following
his graduation, Yunus joined the Bureau of Economics
as a research assistant to the economical researches
of Professor Nurul Islam and Rehman Sobhan. Later
he was appointed as a lecturer in economics in
Chittagong College in 1961. During that time he
also set up a profitable packaging factory on
the side. He was offered a Fulbright scholarship
in 1965 to study in the United States. He obtained
his Ph.D. in economics from Vanderbilt University
in the United States through the graduate program
in Economic Development in 1969. From 1969 to
1972, Yunus was an assistant professor of economics
at Middle Tennessee State University in Murfreesboro,
TN.
During
the Liberation War of Bangladesh in 1971, Yunus
founded a citizen's committee and ran the Bangladesh
Information Center, with other Bangladeshis living
in the United States, to raise support for liberation.
He also published the Bangladesh Newsletter from
his home in Nashville. After the War, Yunus returned
to Bangladesh and was appointed to the government's
Planning Commission headed by Nurul Islam. He
found the job boring and resigned to join Chittagong
University as head of the Economics department.
He became involved with poverty reduction after
observing the famine of 1974, and established
a rural economic program as a research project.
In 1975, he developed a Nabajug (New Era) Tebhaga
Khamar (three share farm) which the government
adopted as the Packaged Input Programme.[4] In
order to make the project more effective, Yunus
and his associates proposed the Gram Sarkar (the
village government) programme. Introduced by then
president Ziaur Rahman in late 1970s, the Government
formed 40,392 village governments (gram sarkar)
as a fourth layer of government in 2003. On 2
August 2005, in response to a petition filed by
Bangladesh Legal Aids and Services Trust (BLAST)
the High Court had declared Gram Sarkar illegal
and unconstitutional.
Grameen Bank
In
1976, during visits to the poorest households
in the village of Jobra near Chittagong University,
Yunus discovered that very small loans could make
a disproportionate difference to a poor person.
Jobra women who made bamboo furnitures had to
take out usurious loans for buying bamboo, to
pay their profits to the moneylenders. His first
loan, consisting of USD 27.00 from his own pocket,
was made to 42 women in the village, who made
a net profit of BDT 0.50 (USD 0.02) each on the
loan.
The
concept of providing credit to the poor as a tool
of poverty reduction was not unique. Dr. Akhtar
Hameed Khan, founder of Pakistan Academy for Rural
Development (now Bangladesh Academy for Rural
Development), is credited for pioneering the idea.
From his experience at Jobra, Yunus, an admirer
of Dr. Hameed, realized that the creation of an
institution was needed to lend to those who had
nothing. While traditional banks were not interested
in making tiny loans at reasonable interest rates
to the poor due to high repayment risks, Yunus
believed that given the chance the poor will repay
the borrowed money and hence microcredit
could be a viable business model.
Yunus
finally succeeded in securing a loan from the
government Janata Bank to lend it to the poor
in Jobra in December 1976. The institution continued
to operate by securing loans from other banks
for its projects. By 1982, the bank had 28,000
members. On October 1, 1983, the pilot project
began operations as a full-fledged bank and was
renamed the Grameen Bank (Village Bank) to make
loans to poor Bangladeshis. Yunus and his colleagues
encountered everything from violent radical leftists
to the conservative clergy who told women that
they would be denied a Muslim burial if they borrowed
money from the Grameen Bank. As of July 2007,
Grameen Bank has issued US$ 6.38 billion to 7.4
million borrowers. To ensure repayment, the bank
uses a system of "solidarity groups".
These small informal groups apply together for
loans and its members act as co-guarantors of
repayment and support one another's efforts at
economic self-advancement.
The
Grameen Bank started to diversify in the late
1980s when it started attending to unutilized
or underutilized fishing ponds, as well as irrigation
pumps like deep tubewells. In 1989, these diversified
interests started growing into separate organizations,
as the fisheries project became Grameen Motsho
(Grameen Fisheries Foundation) and the irrigation
project became Grameen Krishi (Grameen Agriculture
Foundation). Over time, the Grameen initiative
has grown into a multi-faceted group of profitable
and non-profit ventures, including major projects
like Grameen Trust and Grameen Fund, which runs
equity projects like Grameen Software Limited,
Grameen CyberNet Limited, and Grameen Knitwear
Limited, as well as Grameen Telecom, which has
a stake in Grameenphone (GP), biggest private
sector phone company in Bangladesh.. The Village
Phone (Polli Phone) project of GP has brought
cell-phone ownership to 260,000 rural poor in
over 50,000 villages since the beginning of the
project in March 1997.
The
success of the Grameen model of microfinancing
has inspired similar efforts in a hundred countries
throughout the developing world and even in industrialized
nations, including the United States. Many, but
not all, microcredit projects also retain its
emphasis on lending specifically to women. More
than 94% of Grameen loans have gone to women,
who suffer disproportionately from poverty and
who are more likely than men to devote their earnings
to their families. For his work with the Grameen
Bank, Yunus was named an Ashoka: Innovators for
the Public Global Academy Member in 2001.
Recognitions
List of awards received by Muhammad Yunus
Muhammad
Yunus was awarded the 2006 Nobel Peace Prize,
along with Grameen Bank, for their efforts to
create economic and social development. In the
prize announcement The Norwegian Nobel Committee
mentioned
Muhammad Yunus has shown himself to be a leader
who has managed to translate visions into practical
action for the benefit of millions of people,
not only in Bangladesh, but also in many other
countries. Loans to poor people without any financial
security had appeared to be an impossible idea.
From modest beginnings three decades ago, Yunus
has, first and foremost through Grameen Bank,
developed micro-credit into an ever more important
instrument in the struggle against poverty.
Muhammad
Yunus was the first Bangladeshi and third Bengali
to ever get a Nobel Prize. After receiving the
news of the important award, Yunus announced that
he would use part of his share of the $1.4 million
award money to create a company to make low-cost,
high-nutrition food for the poor; while the rest
would go toward setting up an eye hospital for
the poor in Bangladesh.
Former
U.S. president Bill Clinton was a vocal advocate
for the awarding of the Nobel Prize to Muhammed
Yunus. He expressed this in Rolling Stone magazine
as well as in his autobiography My Life. In a
speech given at University of California, Berkeley
in 2002, President Clinton described Dr. Yunus
as "a man who long ago should have won the
Nobel Prize [and] I’ll keep saying that
until they finally give it to him."
He
has won a number of other awards, including the
Ramon Magsaysay Award, the World Food Prizethe
Sydney Peace Prize, and in December 2007 the Ecuadorian
Peace Prize . Additionally, Dr. Yunus has been
awarded 26 honorary doctorate degrees, and 15
special awards. Bangladesh government brought
out a commemorative stamp to honor his Nobel Award.
In January 2008, Houston, Texas declared January
14 as "Muhammad Yunus Day".
Political
activity
In
early 2006 he, along with other members of the
civil society including Prof Rehman Sobhan, Justice
Muhammad Habibur Rahman, Dr Kamal Hossain, Matiur
Rahman, Mahfuz Anam and Debapriya Bhattchariya,
participated in a campaign for honest and clean
candidates in national elections. He considered
entering politics in the later part of that year.
On February 11, 2007, Yunus wrote an open letter,
published in the Bangladeshi newspaper Daily Star,
where he asked citizens for views on his plan
to float a political party to establish political
goodwill, proper leadership and good governance.
In the letter, he called on everyone to briefly
outline how he should go about the task and how
they can contribute to it. Yunus finally announced
the foundation of a new party tentatively called
Citizens' Power (Nagorik Shakti) on February 18,
2007. There was speculation that the army supported
a move by Yunus into politics. On May 3, however,
Yunus declared that he had decided to abandon
his political plans following a meeting with the
head of the interim government, Fakhruddin Ahmed.
On
July 18, 2007 in Johannesburg, South Africa, Nelson
Mandela, Graça Machel, and Desmond Tutu
convened a group of world leaders to contribute
their wisdom, independent leadership and integrity
together to the world. Nelson Mandela announced
the formation of this new group, The
Global Elders, in a speech he delivered on
the occasion of his 89th birthday. Archbishop
Tutu is to serve as the Chair of The Elders. The
founding members of this group include Machel,
Yunus, Kofi Annan, Ela Bhatt, Gro Harlem Brundtland,
Jimmy Carter, Li Zhaoxing, and Mary Robinson.
The Elders are to be independently funded by a
group of Founders, including Richard Branson,
Peter Gabriel, Ray Chambers; Michael Chambers;
Bridgeway Foundation; Pam Omidyar, Humanity United;
Amy Robbins; Shashi Ruia, Dick Tarlow; and The
United Nations Foundation.
Family
In
1967 while Yunus attended Vanderbilt University,
he met Vera Forostenko, a student of Russian literature
at Vanderbilt University and daughter of Russian
immigrants to Trenton, New Jersey, U.S. They were
married in 1970. Yunus's marriage with Vera ended
within months of the birth of their baby girl,
Monica Yunus (b. 1979 Chittagong), as Vera returned
to New Jersey claiming that Bangladesh was not
a good place to raise a baby. Yunus later married
Afrozi Yunus, who was then a researcher in physics
at Manchester University. She was later appointed
as a professor of physics at Jahangirnagar University.
Their daughter Deena Afroz Yunus was born in 1986.
His
brothers are also active in academia. His brother
Muhammad Ibrahim is a professor of physics at
Dhaka University and the founder of The Center
for Mass Education in Science (CMES), which brings
science education to adolescent girls in villages.[40]
His younger brother Muhammad Jahangir is a popular
television presenter. Monica, the eldest daughter
of Yunus, is a Bangladeshi-Russian American soprano
singer, working in New York City.
Books
By
Muhammad Yunus
* Creating a World Without Poverty: Social Business
and the Future of Capitalism (Co-author: Karl
Weber); Public Affairs; 2008; ISBN 1586484931
* Banker to the Poor: The Autobiography of Muhammad
Yunus, Founder of Grameen (Co-author: Alan Jolis);
Oxford University Press; 2001; ISBN 0195795377
* Grameen Bank, as I See it; Grameen Bank; 1994
* Jorimon and Others: Faces of Poverty (co-authors:
Saiyada Manajurula Isalama, Arifa Rahman); Grameen
Bank; 1991
* Planning in Bangladesh: Format, Technique, and
Priority, and Other Essays; Rural Studies Project,
Department of Economics, Chittagong University;
1976
* Three Farmers of Jobra; Department of Economics,
Chittagong University; 1974
On
Muhammad Yunus
* David Bornstein; The Price of a Dream: The Story
of the Grameen Bank and the Idea That Is; Simon
& Schuster; 1996; ISBN 068481191
(Credit:
Wikipedia)
Websites
Grameen
Bank's Official Web Site
Official
website of Dr. Muhammad Yunus
Grameen
Foundation
Profiles
The
Nobel Prize
The
Elders
Social
and Community Entrepreneurs
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