Muhammed Yunus originated the idea of micro-finance in the mid 1970s 1976 while a professor of Economics at Chittagong University in Bangladesh.
More on the Work of Mohammed Yunus
Early loans were given only to women many of whom had been effectively barred from access to credit from commercial banks and other lenders because they came from families too poor to offer any form of security for a loan. Micro finance offers non-colaterised lending to would-be entrepreneurs in poor communities.
Yunus believes that all human beings are born entrepreneurs. Some get a chance to unleash that capacity. Some never get the chance or knew that they had the capacity. He argues that a major flaw with the current financial system is that there are few opportunities for the poor to obtain capital that they can apply productively. This problem has probably worsened since the start of the Global Financial Crisis in 2007-2008.
The Grameen Bank
Muhammed Yunus founded the Grameen Bank, meaning Village Bank, in 1976
After 30 years, Grameen bank does not have branches in any city or municipal area
Microfinance has expanded rapidly across the world and the idea has been copied, refined and deepened in many low and middle income nations as well as a cluster of cities in the United States and other advanced countries.
For example, Grameen America has 18 branches in nine cities in the US with 62,000 borrowers, all of whom are women. In the United States, Grameen America has given out $380m with the average startup loan being $1,000, and repayment rates are 99.9 per cent
Recently, Professor Yunus has been vocal in arguing that persistently high inequality is a key barrier to growth and a threat to globalisation.
In a recent article he was quoted as saying that
"The widening gap between rich and poor around the world is a “ticking time bomb” threatening to explode into social and economic unrest if left unchecked, The banking and financial system has created a world of “the more money you have, the more I give you” while depriving the majority of the world’s population of wealth and an adequate standard of living”
Here is another revealing quote:
“Poverty is not created by poor people, it is the system which created the poverty. . . Unless you change the system, you won’t remove the poverty.”
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