The year was 1974…

People were dying in large numbers from famine in Bangladesh.

One man (a University professor) who saw the starvation
going on around him, had the notion that if he could help
one person to do better, even if just for one day
that it would be worth his while.

So he went into a poor village in Bangladesh called Jobra.
The village was not far from the University where he taught.
He met a woman who was slaving all day to hand make a beautiful
bamboo stool.

He started a conversation with the woman and found out
that for a full days work, she only made 2 cents profit.
(That’s right, just 2 pennies).

Why only 2 cents for such beautiful handiwork he asked?
Well, in order to buy the bamboo to make the stool,
she had to borrow money from a money lender (loan shark).

How much does the bamboo cost to make the stool?
Twenty five cents.

She didn’t have twenty five cents and had to borrow it
from a loan shark. She had no credit or collateral and
a condition of the loan shark loan was that she had to
sell the bamboo stool to the loan shark at his price.

Her profit for a full days work - 2 cents.
The man couldn’t believe what he was hearing.

He started looking into who else was suffering this same fate
from the money lenders. He found 41 other woman were also
being exploited by these loan sharks.

The total of their combined loans - $27.

The man decided that he could help them and solve their problem.
He gave the $27 to the women as a loan from his own pocket
and told them to pay the money lender back.

He told them that this money was a loan and to pay him back
when they could. The women were so excited. They thought
that this was a miracle. It changed their lives!

The women were now able to sell their crafts at the market for
a fair price. They used the extra money to feed and buy clothing
for their children. They even had enough money to repay the man.

The man’s name is Muhammad Yunus (pronounced Lunus).

Muhammad, seeing how happy this made the women started thinking
that if he could make so many people so happy with just a small
amount of money, perhaps he do more of this on a wider scale?

In order to accomplish this, Muhammad Yunus, realized that
the creation of an institution would be needed to lend money
to those who had nothing.

Yunus believed that given the chance, the poor will repay the
borrowed money. He believed that microcredit could be a viable
business model. He went to the banks with his idea.

However, traditional banks were not interested in making tiny
loans at reasonable interest rates to the poor. They told him
the poor were a bad credit risk.

He said ‘but they are paying back the money to the loan sharks’.
Yunus persisted and eventually succeeded in securing a loan from
the government Janata Bank to lend money to the poor in Jobra.

The condition of the loan was that he had to personally sign for
and secure the loan money. He would loan small amounts of money
to the poor in Jobra, mostly women.

What he found was that nearly 100% repaid the loans.

Yunas’ institution continued to operate by eventually securing loans
from other banks. On October 1, 1983, his pilot project began operations
as a full-fledged bank and was renamed the Grameen Bank (Village Bank).

They made loans to the poor in Bangladesh.

This very simple philosophy of lending the poor money to give them
an opportunity to change their lives, has now grown the bank today…
to over 7.4 million customers of which 97% are women.

As of July 2007, Grameen Bank had issued US$ 6.38 billion to
7.4 million borrowers.

Muhammad Yunus was awarded the 2006 Nobel Peace Prize,
along with Grameen Bank, for their efforts to create economic
and social development.

After receiving the news of the important award, Yunus announced that
he would use part of his share of the $1.4 million award money to create
a company to make low-cost, high-nutrition food for the poor.

And the rest would go toward setting up an eye hospital for the poor
in Bangladesh.Yunus’ long term goal is to wipe poverty completely
off the entire planet by the year 2050.

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