Career Guide


Muhammad Yunus: the father of microcredit

While lecturing in Bangladesh as a professor of economics in the 1970s, Muhammad Yunus developed the concepts of microcredit and microfinance.  While lecturing in Bangladesh as a professor of economics in the 1970s, Muhammad Yunus developed the concepts of microcredit and microfinance.

His vision to alleviate poverty and the actions he undertook regardless of the hurdles he met has landed him with a Nobel Peace Prize. In 2006, Professor Muhammad Yunus and the Grameen Bank received this prestigious award “for their efforts through microcredit to create economic and social development from below”.

Yunus is a Bangladeshi banker and an economist. While lecturing in Bangladesh as a professor of economics in the 1970s he developed the concepts of microcredit and microfinance.

“It was a time when the country was going through a famine and there were people in hunger. Poverty was taking a toll and I felt bad as I could not do anything to help. Then, I decided to start small so I headed to the village next to the university to help the villagers there. I tried to help at least one person a day. I learnt the hardships they were going through with loan sharks, thus I helped them by lending them money. You could see happiness in them as they were not confined to the conditions set by loan sharks.”

Yunus noticed that the money he loaned these villagers helped them start their own business and they were paying their debts back well. He then sought assistance from the bank to loan these people money but his request was rejected. Undeterred by this, he kept pursuing his cause and even agreed to be a guarantor and take responsibility for these loans. The bank eventually gave in and started loaning money to the poor to start off businesses to sustain themselves.

“This worked well, as the happy people who received the loans put good use to it and were paying the bank back promptly each month. I did not have to fork out any money from my own pocket,” says Yunus.

After overcoming a lot of obstacles in pursuit of his aim, Grammen Bank was made a reality in 1983. Slowly and steadily, it started to spread its wings to other villages, districts, throughout the country and now, the world.

When asked how he made his initiative a huge success, Yunus replied that he did not get overwhelmed by the enormity of the problem. Hunger and poverty is a worldwide issue and its seriousness can really bog you down. For Yunus, it was all about extending a helping hand to at least one person and see that person benefit from it. This thought, eventually blossomed to a huge helping hand that started helping many people.

Yunus defines social business as a non-dividend company targeted to solve human problems. The main objective here is solving problems without giving utmost importance to profit. The company enjoys the benefit of the profit whilst the owner just takes back his invested amount and not the profits. In order to excel in a social business, one has to come up with a creative idea on how to solve a problem.

“Once the idea is solid, then the funding of the money will just follow through as well. There are a lot of avenues helping people out there. For example, the myHarapan organisation in Malaysia.”

Leaderonomics thanks myHarapan for the opportunity to interview Muhammad Yunus. To access the full interview and to access other videos of inspirational personalities, visit www.leaderonomics.com/theleaderonomicsshow

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