He was head of the Economics Department in Chittagong University. A Fulbright scholar with a Ph.D. from Vanderbilt University, his name was Muhammad Yunus, a citizen of Bangladesh.
Lecturing his students on perfect economic theories, and yet seeing the despair and the destitution of the poor people living around the campus, Muhammad Yunus decided that something was terribly wrong with the economic and social system of Bangladesh. He then embarked on his dream- for the total eradication of poverty in the world.
While visiting the village of Jobra in 1976, he realised that the main predicament of the poor was the unavailability of credit to purchase raw materials. They had to rely on money-lenders and middlemen who charged exorbitant fees. Gathering more information, he found out that there were 42 other people in the village, who needed a total of 856 taka- which was less than $27.
Taking things into his own hands, he forked out $27 from his own pocket and lent it to the villagers. He then approached Janata bank, the largest government bank,for help. However, he found out that banks do not lend money to the poor because they had no collateral. Also, it was generally assumed that the poor will not be able to repay their loans because they would simply use the money for their food and never have the means to repay.
Angered by how banking systems were tailor-made for the literate and rich, Muhammad Yunus then set in his heart to start a credit system that served the poor and not vice-versa. Thus, he started the Grameen Bank in 1976. In 1983,Grameen Bank became established as a formal bank which provides small, collateral-free credit to rural poor people, mainly women, for income-generating activities. Borrowers had to form groups of 5, and they were accountable for each other. Repayment was based on peer pressure, and in a sense, the collective responsiblity of the group served as the loan collateral.
The underlying premise of Grameen Bank is - in order to emerge from poverty and remove themselves from the clutches of usurers and middlemen, landless peasants need access to credit, without which they cannot be expected to launch their own enterprises, however small these may be.
Since then, he has proved the masses wrong. He debunked myths about the poor being unable to use money effectively and being unable to repay their loans. As of July 2005, Grameen Bank disbursed $5.0 bilion in loans to 5.0 million borrowers, 96% of them women, with a repayment rate of 99%. And Grameen’s concept has since been taught and implemented in other countries, for example Bolivia, Mexico, and even in United States. In 2006, Muhammad Yunus won the Nobel Peace Prize.(Source:http://www.grameen-info.org)
Here is an excerpt of Muhammad Yunus’ speech:
Poverty is not caused by the poor people. Poverty is caused by the system we built. Poverty is caused by the policies that we pursue. So if this is my conclusion, I have to prove that it’s true.So I built Grameen Bank, as an institution, a bank, but a different kind of bank… Other banks create poverty, but this bank gets them out of poverty…I’m always asked,”You talk about having a poverty-free world, are you crazy?Even the richest country in the world, United States, they have poor people there.” I said, Look, no matter how rich you get in the present system,you have poor people. So I’m trying to change that system, and in that system, there will be no poor people, because people are as capable as anybody else.
Here is a man who observed poverty his nation, and though they were not in the class of his own, he humbled himself and made sure that they were alleviated out from poverty. Because of him,many are standing on their feet today.
