Success Story of Dr. Mohammed Yunus
Mohammed Yunus is a Bangladeshi banker economist and nobal peace pize recipient.
Yunus was born in 1940 in the village of Bathua to a Muslim family, his father was a jeweler. In 1944 he moved with his family to the city of Chittagong and he went to Lamabazar Primary School. Yunus went to Chittaging college and became active in cultural activities and won awards for drama acting. In 1957, he joined 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 (GPED) in 1971. 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.[5] 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
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 furniture 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, thus vastly improving Bangladesh’s ability to export and import as it did in the past, resulting in a greater form of globalization and economic status.
Dr. Akhtar Hameed Khan, founder of the Pakistan Academy for Rural Development (now Bangladesh Academy for Rural Development), is credited alongside Yunus for pioneering the idea.[11] 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 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 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,[16] 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.
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: