Yunus was born in East Bengal (now Bangladesh) on June 28, 1940. As a youth, he was able to travel to Pakistan, India, and Canada with Boy Scouts. This increased his interest in cultural activities and spurred him to attend Chittagong College for Drama. Soon after, Yunus switched his focus to economics and earned his MA in economics by 1961. After an early entrepreneurial success with a packaging factory, he was awarded a Fulbright scholarship to earn his Ph.D. in Economic Development at Vanderbilt University in the United States.
In 1974, a famine caused great suffering and starvation across the land. “We tried to ignore it,” Yunus said. “But then skeleton-like people began showing up in the capital, Dhaka. Soon the trickle became a flood. Hungry people were everywhere. Often they sat so still that one could not be sure whether they were alive or dead.”
Unable to connect the theories and methods of standard economics he had learned in school, Yunus stepped out of the academic world and into the suffering. He began researching the famine and became involved in poverty reduction efforts. He worked with the government to establish village councils as a form of independent aid. Yunus also noticed that the poor had almost no access to usable cash. Traditional banks avoided the high-risk loans altogether and moneylenders saddled the poor with high interest rates. This meant the majority of the poor’s profits went back to the lenders.
Yunus decided to lend $27.00 (USD) of his own money to 42 women in one of the poorest villages. He believed that given the chance and adequate support, the poor would be able to repay if they didn’t face high interest rates. All of the women were able to make a profit and repay their loans.
This experience led Muhammad Yunus and his colleague Dr. Akhtar Hameed Khan (founder of the Bangladesh Academy for Rural Development) to pioneer the development of microcredit and microloans in the surrounding communities.
Yunus named his organization the Grameen Bank (Village Bank) and worked to secure loans from much larger banks. In less than 6 years, Yunus was able to hand out thousands of micro loans and support the self-advancement of over 28,000 villagers. Though no economic model is without its faults and limitations, Yunus’ experiment-turned-program has been received as a success. The programs and organizations of the Bank have expanded to include educational, energy and community development programs.
The bank also provides interest free loans to beggars with extended repayment schedules. Muhammad Yunus is recognized as a moral hero for stepping out of the academic safety zone into the famine and impoverished world around him. His pioneering vision of microcredit and innovative economic effort on behalf of the poor has improved the conditions of countless villagers and families throughout the region.
“The fact that the poor are alive is clear proof of their ability.” —Muhammad Yunus
Visit www.moralheroes.org for more inspiration for the hero in you!