Muhammad Yunus (1940-) is a Bangladeshi economist best known for his role in the early microcredit movement of the 1970s, and his creation of the Grameen Bank, now one of the world leaders in microfinance. Yunus has received the Nobel Peace Prize for his achievements, and in recent years has devoted much of his time to political advocacy.
– Youth and Education –
Yunus was born in 1940 in Bathua, Bengal, as it was then known, within colonial India. He went to school in Chittagong, where he first displayed his genius, finishing as one of the top students in his province. After high school he studied at Chittagong College and then Dhaka University, where he was awarded a bachelor’s and then a master’s disagree in economics. He finished his studies in 1961, at just 21 years of age.
After spending several years teaching economics in Chittagong and starting up a business of his own (a packaging plant), he returned to his studies, this time at Vanderbilt University in Nashville and earning a PhD in economic development. After several more years teaching, this time in Tennessee, Yunus returned to his home country in 1972, shortly after it won its independence from Pakistan in a civil conflict know as the Bangladeshi Liberation War. While in Tennessee, he married a Russian-American literature student, Vera Ferostenko, but they divorced after Ferostenko, having recently given birth to their first child, refused to move to Bangladesh with her husband.
– Grameen Bank –
Fresh from university, Yunus was full of ideas about how to contribute to his newly independent country’s national development. He called upon Bangladeshi-Americans to support the new government, advised the new government on economic development, and took a particular interest in rural poverty. He also remarried, this time to a Bangladeshi physicist.
It was in 1976, during one of his research trips in the countryside of his home province (and now country), that Yunus claims he realized that better access to credit could solve a problem faced by impoverished rural workers. As matters stood, the presence of the conventional banking system was limited or non-existent in rural areas. With his own money, Yunus dispersed a number of loans to female workers.
Alongside another Bangladeshi academic, Akhtar Hameed Khan, Yunus decided to build an institution on the same principle. Ironically, it was difficult to borrow capital to finance the new initiative, although this was eventually secured from a government-owned bank. By the 1980s, what began as a minor rural project had issued tens of thousands of loans and been reorganized as a formal banking institution in itself, the Grameen Bank. Today, the Grameen Bank has over 20,000 employees and an annual revenue, at least before the credit crisis, of over $90 million.
Yunus’s success with the Grameen Bank is what he is best known for today. In 2006, Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize. He was the first citizen of Bangladesh to receive the award, and devoted much of his award to starting up a new food company and a hospital. He also has been given a number of other prestigious awards, including the U.S. Presidential Medal of Freedom.
– Political Advocacy –
Yunus had engaged in political advocacy when his country achieved independence in 1971, but after he was given the Nobel Prize, he returned to this field of activity. In 2007, Nelson Mandela invited Yunus to join his new Global Elders advisory group, alongside Desmond Tutu and a number of other accomplished political figures. The Elders intend to advocate solutions for the HIV crisis, global poverty, climate change, wars, and other global issues.
Within his own country, Yunus has also been calling for greater accountability from the elected government and then proposing the creation of a new political party free of dishonesty, secrecy, and corruption. This Citizens’ Power party began to form in 2007, but for uncertain reasons, Yunus instead abandoned it personally, apparently in support of the party then in power under Fakhruddin Ahmed.