Mohamed Yunus and Microfinance in Bangladesh

The 2006 Nobel Peace Prize winner came as a surprise to many as his work has nothing to do with international peace. Muhammad Yunus of Bangladesh and Grameen Bank that he founded in1974 have been declared joint winners. Mohamed Yunus, a Bangladeshi economist is one of the pioneers of micro-credit lending schemes for the poor in Bangladesh, mostly women.

Mr. Yunus, 66, plans to use the $1.35 million prize money to “find more innovative ways” of helping the poor Bangladeshi citizens launch businesses. Mohamed Yunus started the bank with only $27 of his own money. In thirty years the bank has 6.6 million borrowers, of which 97% are women.

In an interview Mohamed Yunus said he was delighted at the news and proud of the bank’s achievement. He felt the honor was “for their efforts to create economic and social development from below.” As a Bangladeshi, he is happy to have done something that has now received world recognition. Professor Muhammad Yunus is a social revolutionary whose ideas combine capitalism with social responsibility. His work has changed the face of rural economics and social development. He is responsible for many innovative programs for the rural poor.

In 1974, he pioneered Gram Sarkar as a form of local government in which rural people participated. This idea was successful and was adopted by the Bangladeshi government in 1980. He received the President’s award in 1978 for Tebhaga Khamar, a system of cooperative three-share farming, adopted by the government in 1977.

Yunus has served on many committees dealing with education, population, health, disaster prevention, banking, and development programs. He is on the boards of many international organizations including Amanah Ikhtiar Malaysia, the Calvert World Values Fund, and Foundation for International Community Assistance, the National Council for Freedom from Hunger, RESULTS and the International Council of Ashoka Foundation.

The Nobel Prize Committee felt that the bank’s work in creating opportunities for people to get out of poverty created the conditions for sustainable peace. “Development such as this is useful in human rights and democracy” was their declaration.