Giving Loans to the Poor: New Heroes

There are a handful of worthy social entrepreneurs that are changing the world, but one that Muhammad Yunus, is making a huge difference in how poverty is viewed and handled.  He won the Nobel Peace Prize in 2006 as well as several other awards recognizing his impact on poverty reduction through his microcredit business model (Grandin, 2006).  In a country of social classes in Bangladesh’s caste system where poor people have no opportunities to improve themselves, with a religion that discourages women from borrowing money, traveling, or getting medical treatment (Offenhauer, 2005, p.62), Yunus gives people hope and opportunities to move past poverty although other banks refuse to loan to people with no money (Dugger, 2006).

The revolutionary idea behind Muhammad Yunus’s business model is that he started bank that gives loans to the poor without collateral (Dugger, 2006).  By giving loans to those in extreme poverty, Yunus’s microcredit program has been crucial in liberating women and allowing the poor to enroll their children in school, pay bills, and even start their own businesses (Dugger, 2006).  Founding the Grameen Bank in Bangladesh to disrupt the economy and create entrepreneurial growth in a poverty-stricken region, Yunus is a hero.  Now global, even with locations in the United States, over nine million borrowers, a repayment rate of 99.6%, and a demographic such that 97% of their borrowers are women, Grameen Bank is touching a lot of people around the world and heroically allowing people to survive (Costic, 2017).

Muhammad Yunus heroically stepped out from the norms of economics and finances when he started down this path.  He gave $27 microloans to 42 poor women in Jobra as an experiment and has persisted to do something that no other bank would do, despite allegations of embezzlement and tax fraud (Costic, 2017).  The prime minister in 2010 accused Muhammad Yunus of “sucking blood from the poor” (BBC News, 2011).  Regardless of the accusations, Yunus has continued to create microcredit opportunities for the poorest areas.  He even helped Hillary Clinton create a microcredit solution for some of the very poor communities in Arkansas (BBC News, 2011).  Yunus believes that the microcredit loan is servicing a need for the people and will not disappear (BBC News, 2011).  A hero on a global scale, Yunus’s microcredit loans will create opportunities for people to start businesses, allowing them to buy materials needed for their venture, even as simple as a rickshaw.

In conclusion, since Muhammad Yunus, economist from Bangladesh and social entrepreneur, has created a system that allows the poorest people to have access to money without collateral, he is a hero.  The microloan programs that he has created will continue to create opportunities for families to survive, fend off malnutrition and starvation, get educated, and start businesses.  His concept is being practiced around the world, finally serving the neglected poor.

References

BBC News. (2011). Profile: Muhammad Yunus, ‘world’s banker to the poor’ Retrieved from https://www.bbc.com/news/world-south-asia-11901625

Costic, Miriam. (2017). ‘We are all entrepreneurs’: Muhammad Yunus on changing the world, one microloan at a time. Retrieved from https://www.theguardian.com/sustainable-business/2017/mar/29/we-are-all-entrepreneurs-muhammad-yunus-on-changing-the-world-one-microloan-at-a-time

Dugger, Celia. (2006). Peace Prize to Pioneer of Loans to Poor No Bank Would Touch. Retrieved from https://www.nytimes.com/2006/10/14/world/asia/14nobel.html

Grandin, Karl. (2006). Muhammad Yunus Biographical. Retrieved from https://www.nobelprize.org/prizes/peace/2006/yunus/biographical/

Offenhauer, Priscilla. (2005). Women in Islamic Societies: A Selected Review of Social Scientific Literature. Retrieved from https://www.loc.gov/rr/frd/pdf-files/Women_Islamic_Societies.pdf

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