When we talk about poverty alleviation, one name that stands out is Muhammad Yunus. Born on June 28, 1940, in Chittagong, Bangladesh, Yunus is an economist, social activist, and Nobel Prize winner who has pioneered new concepts in the fight against poverty.
Traditional banks were reluctant to give loans to the poor, especially in Bangladesh. This, combined with other factors, kept the cycle of poverty in Bangladesh going. Poor people couldn’t get loans to start their businesses, and the loans that they could get were predatory, with lenders charging high interest rates. But enter Muhammad Yunus and his company, Grameen Bank. Often referred to as “the world’s banker to the poor,” Yunus pioneered and introduced the concepts of microcredit and microfinance. For his role in advocating for the poor and proving they are creditworthy, he won the Nobel Peace Prize in 2006.
What is microcredit?
Microcredit refers to the allocation of small loans to people who don’t have access to conventional banking services. These loans are given with no collateral, which makes them more available to low-income borrowers. These loans are guaranteed by the borrower’s community, and peer pressure from the group forces borrowers to pay on time. Such uses for these loans are for starting or expanding businesses, buying livestock, and purchasing farming equipment.
Legacy and Controversy:
Muhammad Yunus’ legacy is undeniable; the company he founded, Grameen Bank, has lifted countless others out of poverty with its programs. His concepts of microcredit and microfinance have been replicated worldwide, from countries such as India to communities in rural Arkansas. But not all is positive. There have been some instances where people who have taken loans from his company have entered a debt trap. But as the world continues to develop, we can look to Muhammad Yunus’s efforts to find solutions for poverty worldwide.
Related Stories:
Muhammad Yunus | Biography & Facts | Britannica
Profile: Muhammad Yunus, ‘world’s banker to the poor’ – BBC News
Muhammad Yunus | Pioneer of microfinance – The Hindu
Muhammad Yunus | Kellogg Institute For International Studies (nd.edu)
TAKE ACTION:
Yunus Centre – Global Hub for Social Business (muhammadyunus.org)
