Nobel Peace Prize Award For Social Entrepreneur Yunus and Microfinance Leader Grameen Bank

"Everyone is an entrepreneur."  Yunus

Setting a new course for banking in Bangladesh

Yunus defied traditional banking standards in Bangladesh to promote the principles of equality, democracy, and justice. After receiving his PhD in Economics at Vanderbilt University, Yunus became Head of the Rural Economics Program at the University of Chittagong in Bangladesh where he initiated the Grameen Movement. This unprecedented research project offered credit without collateral to the poorest of the poor in rural Bangladesh. Yunus recognized that without credit, the impoverished had no opportunities for employment or economic development. He therefore promoted a progressive option to better the lives of the landless peasants in his country by providing them micro-credit loans based solely on mutual trust.

Creating a Movement: Enter Grameen

The primary goals of the Grameen Movement were to create opportunities for self-employment for the poor and to end their exploitation by money lenders. The borrowers were given small loans, sufficient to begin micro-enterprises, and were required to adopt the four main principles of Grameen Bank:

• discipline,
  
• unity,
  
• courage and
  
• hard work

which, in turn, was intended to raise their political and social awareness. By providing micro-credit based on mutual trust and group accountability, Yunus offered hope, opportunity, and a sense of community to the poor. The project was so successful in the social and economic development of the poor that Grameen Bank became an independent bank in 1983. It has since become a prominent model for many micro-credit institutions throughout the world.

Grameen Bank's Impact

The achievements of the bank, from its inception, are profound. Initially sponsored by the central bank of Bangladesh and supported by commercial banks, Grameen Bank is now 90% owned by the poor population which it supports. 97% of the bank's 6.74 million borrowers are women, leading to great advances in family development and to bettering the male-female inequality mentality common in rural Bangladesh. Not only have Yunus and Grameen Bank forever changed rural economics in Bangladesh, but they have also given hope to the world for the possibilities of breaking the cycle of poverty.

Microfinance, Social Entrepreneurship, and Sustainable Development

Grameen Bank has been an exemplary case of how a business model can contribute to overcoming challenges facing society. Yunus's model has been adapted by organization such as Freedom from Hunger, who serve hundreds of thousands of poor women with integrated credit and education. Kiva is another adaptation of microlending, bringing the opportunity for individuals to lend directly to the poor in an eBay-like market for microloans web site. The Bank is part of a growing trend of enterprises whose very existence is meant to contribute to bettering the state of the world - from businesses based on turning trash into valuable products (such as TerraCycle), or getting basic needs to the poor (such as Scojo Fnd with glasses or Sprinkles for child nutrition), to those providing innovations filling needs overlooked in the marketplace (such as Thamel.com serving Nepalese diaspora or Whirlwind wheelchairs). Around the world, entrepreneurship is providing a means of sustainable development by combining benefits for society with economic opportunity.

Related Links

• Grameen Bank
• Freedom from Hunger
• Paper: "Microfinance’s Contribution to Achieving the Millennium Development Goals"
• Kiva