2006 Nobel Peace Prize Laureate Dr. Muhammad Yunus was born June 28, 1940, in the village of Bathua, in Hathazari, Chittagong, the business center of what was then Eastern Bengal.
His father was a successful goldsmith who encouraged his sons to seek higher education and his mother helped any poor person who knocked on their door. Yunus, the third of 14 children, five of whom died in infancy, was inspired by his parents to commit himself to the eradication of poverty.
Yunus earned a doctorate in economics from Vanderbilt University after receiving a Fulbright grant to study in the United States. He began his career as professor of economics at Middle Tennessee State University, Murfreesboro, before moving back to Bangladesh where he taught at the University of Chittagong.
In 1974, he loaned the equivalent of $27 to a group of women who made bamboo furniture, a step that would eventually culminate in the creation of the Grameen Bank in 1983. Defying conventional banking wisdom, Yunus continued to make small loans to impoverished people considered to be high-risk.
In 1974, Dr. Muhammad Yunus led his university students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learned that after borrowing money to buy raw bamboo she was left with a penny profit margin. Yunus lent a group of 42 basket-weavers $27 from his own pocket. He found that it was possible with a tiny amount not only to help people survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty.
Against the advice of banks and government, Yunus continued to give out ‘micro-loans’ and in 1983 he formed the Grameen Bank, meaning ‘village bank.’ The Grameen Bank has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust and accountability.The bank currently has a repayment rate of 98 percent, a recovery rate higher than any other banking system, and has been profitable in all but three years of existence. It has more than 6 million borrowers (94 percent are women), more than 2,000 branches and provides services to more than 86 percent of the total villages in Bangladesh. Grameen methods are applied in projects in 58 countries, including the United States, Canada, France, the Netherlands and Norway.