(Bangladesh, 1940) Indian economist, Muhammad Yunus creator of the microcredit and founder of the Grameen Bank for Poor & helpless peoples. A non-practicing Muslim, he studied Economics in New Delhi and expanded his studies in the United States with scholarships from the Fulbright and Eisenhower institutions and Vanderbilt University (Tennessee). He returned to his country in 1972 to head the economics department of Chittagong University, shortly after Bangladesh gained independence.
History Grameen Bank
Living together with the farmers of the Jobra region (Bangladesh), Yunus realized that poverty was perpetuated because it left the poor outside the economy. Traditional banks did not grant loans to those who could not offer guarantees, and this generated a vicious circle of poverty.
Yunus created the concept of microcredit the day he decided to help a few peasants who lived near Chittagong University and who, after a great famine that devastated the country in 1974, we’re going through serious difficulties. He prepared a list of 42 seriously indebted people who, in total, owed less than $ 27. Each of them received the amount he owed without any other condition than to concentrate on his work and to return the money whenever he could.
The success of Grameen Bank
The success of his action led him to create, in 1976, the Grameen Bank, with the intention of lending money to people who did not have access to traditional bank loans, given that they did not meet the conditions usually required as a guarantee to guarantee the refund of the sum loaned. The bank was created to grant loans only to the most disadvantaged people, becoming the shareholders of the entity.
This non-profit institution has saved hundreds of thousands of its compatriots from misery. The Bank currently operates with more than 22,000 employees working on the streets of nearly 38,000 of the 68,000 villages and towns in Bangladesh, and provides loans to 2.3 million people, of whom 94% are poor women, the refund rate of 97%.
Everything revolves around the so-called “solidary guarantee” which consists of lending the money to the two poorest women in a group of five who come together to request it, and the others do not receive their loan until the first two have returned it, in such a way that a kind of support-pressure network is created. If you stop paying, everyone loses the possibility of receiving new help. The average loan is $ 75, and the maximum is 300.
Aim Of Grameen Bank
Credit recipients also commit themselves to 16 non-mandatory principles, which are considered positive values, such as sending children to school, growing vegetables or drinking only channeled water, and receiving a mobile phone, as Yunus believes that the new technologies and Internet access represent a revolution for the poor, who thus have access to the information society. Currently, 52 countries have institutions that grant microloans with the same method as that used by the Grameen Bank.
Initially, the aim of Grameen Bank was for 50% of the beneficiaries to be women, but as the project progressed, women represented more than 90% of the recipients of the microcredits. Yunus noted that although the rate of repayment of loans was practically the same between men and women, compared to men tended to meet their needs first, while women tended to benefit their families much more, starting with their children, continuing by their homes and then attending other needs.
The fact that most of the clients were women led the commitment of the financial institution to the fight for the liberalization of women. Also, granting credit to women made even more sense since it was these that made up the majority of the poor population of Bangladesh. Yunus found that the main opposition to this system was the husbands themselves since they were offended by the fact that their women, mostly illiterate and without having ever had contact with money, who benefited from the microcredits. Second, he had to face the mullahs, who argued that accepting Grameen Bank money went against religion.
Awards of Muhammad Yunus
Yunus has been named Doctor Honoris, more than ten universities around the world and has received around twenty awards, such as Ramón Masagay (Philippines), Aga Khan de Arquitectura (Switzerland), Pfeffer de la Paz, World Food Foundation and Gleitsman Foundation (all of these in the United States). In October 1995 he was awarded the Prize for Freedom 1995, granted by the Max Schmidheiny Foundation of the Swiss University of St. Gallen.
In October 1997, the founder of the Bank of the Poor received the 1996 UNESCO-Simon Bolivar International Prize in Paris, France, for his contribution to the freedom, independence, and dignity of the people of Bangladesh. It was proposed for the Nobel Prize in economics by President Bill Clinton. On June 19, 1998, he was awarded the Prince of Asturias Award for Concord, which he shared with former Jesuit Vicente Ferrer, Doctor Joaquín Sanz Gadea and missionary Nicolás Castellanos.
In October 2006, Yunus and the institution he created, the Grameen Bank, were awarded the Nobel Peace Prize “for their struggle for a just economy for the poor classes.” What some decades ago seemed an impossible idea was thus recognized with the awarding of the prize.
At the Global Microcredit Summit held in Halifax, Canada, in November 2006, Yunus stated that his goal was that before 2010, 100% of the extremely poor population of Bangladesh would have access to micro-credit to start their own business. Economic prosperity. In the words of the economist himself, “if the poorest do not have access to their first dollar, they will not be able to generate another one.” Within the framework of the same summit, he pointed out that not only did he not oppose traditional banks entering the territory of microcredit, but he had been encouraging them to do so since 1976, although, with the fear that these financial entities would seek the profit of the microloans to the detriment of the social service they should provide.