Professor Muhammad Yunus
Founder & Managing Director,
Grameen Bank Bangladesh

After Bangladesh gained its independence in 1971 from Pakistan, Muhammad Yunus, who was an Assistant Professor at Middle Tennessee State University (USA), decided to go back to his homeland. He enthusiastically joined as the chairman of the economics department in Chittagong University but soon grew disenchanted as all the brilliant theories in the world could not save the people from poverty. "I wanted to understand the lives of poor people, to find out what had made them so vulnerable to famine."

Ridding himself "of the arrogance that accompanies a PhD: the tendency to view situations with a bird's eye view", he went into the village of Jobra and met with the impoverished women there. Many of them made stools for a living but because they did not have any start-up capital, they borrowed from the local moneylenders who charged exorbitant interest rates and put restrictive measures on them. One woman said she could only sell her stools to the moneylender who paid her very little. When Yunus went around to calculate how much was actually needed by the women there, he was shocked to learn that for a grand total of US$27 he could help 42 people rise from the vicious cycle of poverty they were in.

Yunus dug into his own pockets and lent the stool makers of Jobra the money. To his surprise, he was paid back by everyone on time. Confident with the results, Yunus went to the local bank to discuss the possibility of micro-loans for the poor with them but he was turned down. Banks simply do not lend to those without jobs and without collateral. Starting his own micro-loans programme, Yunus showed the banks the excellent results after a few years but the banks still remained unconvinced.

So in 1983, he set up Grameen Bank as a bank for the poor. Yunus "reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity." Today, Grameen Bank provides credit to the poorest of the poor in rural Bangladesh, without any collateral. Yunus reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder."

As of September, 2002, Grameen Bank has 2.4 million borrowers, 95 percent of whom are women. With 1,175 branches, GB provides services in 41,000 villages, covering more than 60 percent of the total villages in Bangladesh.