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People Who Mattered: Muhammad Yunus

3 minute read
Simon Robinson | Dhaka

A big idea sometimes starts out small. In 1974, after earning his Ph.D. in the U.S., Muhammad Yunus was teaching economics at Bangladesh’s Chittagong University. When a deadly famine struck the country, Yunus, eager to lend a helping hand, paid off the money owed to loan sharks by a group of impoverished villagers struggling to survive; they should repay him, he said, “when they could.” Eventually they did, but that was not the most significant aspect of the episode. While the total sum was only about $27, that a stranger would trust them with his cash gave the villagers an appreciation of their own self-worth. Today, that tiny pool of money has grown into an enormous reservoir of hope and dignity for millions of people the world over.

Yunus’ philanthropic act pioneered the concept of microcredit—making small loans available without collateral to needy entrepreneurs at affordable interest rates. What Yunus discovered is that such borrowers are typically hardworking, motivated, reliable and themselves altruistic, often creating collective, grassroots enterprises that benefit the whole community. Yunus’ Grameen Bank now lends $800 million a year to nearly 7 million Bangladeshis, and boasts a 99% repayment rate. His work over three decades earned him this year’s Nobel Peace Prize. “Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,” the Nobel Committee wrote in its citation. “Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries.”

Speaking to a TIME reporter just seconds before a phone call from Oslo to tell him he had won the Nobel Prize, Yunus, 66, explained that the revolution behind microcredit is the way it upends normal notions of banking. “Conventional banks look for the rich; we look for the absolutely poor,” he said. “All people are entrepreneurs, but many don’t have the opportunity to find that out.” In his Nobel speech, Yunus made clear his belief that access to credit ought to be a basic human right, and advocated the acceptance of “social businesses”—organizations that are self-sustaining but not profit maximizing. “I support globalization … but it must be the right kind of globalization,” he said. “The rule of ‘strongest takes all’ must be replaced by rules that ensure the poorest have a place and a piece of the action.”

In Bangladesh, a young nation better known for its poverty, political violence and natural disasters, Yunus’ Nobel award is a matter of national pride. Within minutes of the announcement, thousands gathered outside Yunus’ house and Grameen’s headquarters in the capital Dhaka. “No one came to us, no one asked us how we do things, no one was interested for years,” says Mohamed Ansaruzzaman, head of Grameen’s International Program Department. “Now they all want to see what we do—journalists, NGO workers, diplomats.” Weeks on, posters of Yunus still dot Dhaka. Reads one big banner, outside a suburban pizzeria: PROFESSOR MUHAMMAD YUNUS: WE ARE PROUD OF YOU.

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