Muhammed Yunus: Banking the Unbankable
In seeking to help the poor, Grameen Bank founder Muhammed Yunus showed the world the value of microlending.
Economist, author, Nobel Laureate and the visionary who saw opportunity in a business model that traditional banks wouldn't touch. Muhammed Yunus founded Grameen Bank in 1983 on the concept that making small loans with reasonable rates to the impoverished population of Bangladesh would create financial independence among the previously unbankable and ultimately strengthen his home country's economy. In the process of empowering the poor to help themselves, he gave credence to the microlending model.
According to Yunus, there are two types of businesses: those that exist to make money for themselves, and those that exist instead for the purpose of social goals. "It's all about others," Yunus said during a lecture at the UNC Kenan-Flagler Business School in 2010. "Business to do good to the people, do good to the planet."
Yunus first developed the microlending concept as an economics professor at Chittagong University in Bangladesh, when he loaned $27 to a group of local women. By the time he and Grameen Bank received the Nobel Peace Prize in 2006 for their efforts to help the impoverished, the bank had grown into an institution with $125 million in assets, and Yunus' innovative model influenced the creation of other microfinancial institutions around the world. Even the Dodd-Frank Act recognizes the benefit of microlending, authorizing the U.S. Treasury to establish a program of small-dollar loans and grants to bring traditional banking opportunities to the unbanked or underbanked in America.
Despite his accomplishments, Yunus was removed from his position at Grameen Bank in March. But Sen. Dick Durbin (D-Ill.) defended Yunus, citing an "effort on the part of the Bangladeshi government to discredit" Yunus. "With Professor Yunus at the helm, Grameen Bank has played a leading role in a global movement to lift millions of the world's poorest people out of poverty using the innovative microcredit concept that he pioneered," Durbin wrote at the time.