Before talking about the social entrepreneurship concept Yunus created, we should take a short look at his biography;
Muhammad Yunus was born on 28th June 1940, in the village of Bathua, Chittagong. He was the third of nine children, in fact he was third of 14 children, but unfortunately five died in infancy.
His mother was Sufia Khatun, and his father was Hazi Dula Mia Shoudagar, a successful goldsmith. The father always encouraged his sons to seek a higher education. Yunus admired his father, but his mother even more, because she always helped the poor people who knocked on their door.
He was an extraordinary student, passing the matriculation examination from Chittagong Collegiate School with a rank of 16th out of 39000 students in East Pakistan. After finishing his bachelor’s degree in the Department of Economics (1960) at Dhaka University, and his master’s a year later, he then joined the Bureau of Economics. In 1965 he received a scholarship to study in the United States, where he obtained a PhD in economics in 1971. After the Bangladesh Liberation War ended, Dr. Yunus returned to Bangladesh.
Muhammad Yunus created the social entrepreneurship revolution with only $27 in his pocket.
In 1974, while taking his students on a field trip to a poor village, the class interviewed women who made bamboo stools. The women who made bamboo stools had to borrow the equivalent of 15 pennies to buy raw bamboo for each stool. After repaying the middleman, and interest rates as high as 10% a week, the women were left with a profit margin of just one penny. *
Yunus gave $27 from his pocket to the women who made bamboo stools. He not only helped them to survive the weeks immediately ahead, he helped them to pull themselves out of poverty. Yunus was overwhelmed by the feeling he got from helping poor people, just as his mother had done. This was the spark that ignited his idea of micro lending, and financing.
He helped the poor and the marginalized, because banks didn’t want to extend credit to their micro businesses. Against the advice of banks and the government, Yunus persevered with giving out “micro- loans”, and in 1983 formed the Grameen Bank, (Grameen Bank means “village bank”, and it’s founded on principles of trust and solidarity).
In Bangladesh today, Grameen has 2,564 branches, with 19,800 staff serving 8.29 million borrowers in 81,367 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 97% are women and over 97% of the loans are paid back, a recovery rate higher than any other banking system. Grameen’s methods are now applied to finance projects in 100 countries, including the US, Canada, France, the Netherlands and Norway.*
The recovery rate is high because of the principle of trust and solidarity. To ensure repayment, the bank uses a system of “solidarity groups”. These small, informal groups apply together for loans, and their members act as co-guarantors of repayment and support one another’s efforts at economic self-advancement.
He also created Grameen Telecom (Village Phone), which has a stake in Grameenphone, the biggest private phone company in Bangladesh. From its start in March, 1997 until 2007, GP’s Village phone project brought cell phone ownership to 260,000 rural poor people in over 50,000 villages.
For his work with Grameen, Yunus was named an Ashoka: Innovators for the Public Global Academy Member in 2001.
In 2006, Dr. Muhammad Yunus alongside Grameen Bank received the Nobel Peace Prize, for efforts to create economic and social development.
I will end this article, with the following words,
I want to say Kudos! to Dr. Muhammad Yunus, for his achievement and for his efforts to make the world a better place for tomorrow. Millions of people have been saved, and will be saved in the future, and it all started with $27…