Muhammad Yunus and Grameen Bank

Muhammad Yunus and Grameen Bank were awarded the Nobel Peace Prize for 2006 for their efforts in creating economic and social development for the masses below.The Chairman of the Nobel Committee said in his prize announcement speech that poverty is reduced if large groups of people work towards it, and microfinance is one such method. Muhammad Yunus is one person who had the leadership and the vision and took an initiative to translated those visions into practical action, and benefitted people in Bangladesh and other countries. He established the idea to give loans to poor people who had no financial security. Muhammad Yunus was given the award because he established a model for many other organizations to follow.He had the vision that every man, no matter how poor, has some talent within him that he can pursue for his own economic uplift. This is especially true for the women in the society who deserve to get an equal opportunity to men to acquire the necessary finances to pursue t heir talents. Microcredit is one of the methods that Muhammad Yunus thought could help in the erosion of poverty from the world. (Cozyinhel, 2006)Muhammad Yunus gave a speech about the microfinance revolution. In this video, he talks about how he came up with the idea of microfinance. He explained how when Bangladesh was formed, it faced a lot of problems, economy was sliding down and famines struck too. He was an economics teacher at that time and he felt terrible for not being able to use all that he teaches to help the people of his country. He wanted to remove people from this frustration and agony and the one thing that caught his attention most was the ruthlessness of the money lenders in a small village.He researched into how many people in the village actually went to these money lenders for money and found out how less they borrowed. He realized how entrenched the money lending system was in the roots and this led him to the solution that he came up with. He thought that if he gives the mere amount of money to people from his own pocket, they can return that to the money lender and they will be free. So the basic idea he had in mind was to free the people from the money lenders.He did this initially as a onetime action and later wanted to expand this into a systematic system. He then thought of an idea to go to a bank and ask them to lend that amount to the villagers, which blatantly refused to lend money to the poor people because they were not credit worthy. He then convinced them to allow him to be the guarantor and lend money to the poor.This was agreed upon and he kept growing this system. He is of the opinion that during the entire process, all he did was to struggle against mindsets (Calit2ube, 2007).He was also of the opinion that banking system was unjust because it excluded the poor and the women, so he decided to put his maximum focus on lending money to the women. Again at this point, he faced a struggle of mindset because women themselves were scared and unwilling to take the money and use it to create something. But he said that this was not the voice of the woman but the voice of fear and if worked upon patiently, these fears can be removed. Ultimately, they started lending to women and the impact on the families was much stronger than lending to men.Keeping this in mind, Grameen Bank thus started lending 97% to women only! Grameen Bank was owned by these poor women, who were the shareholders and on the Board of Directors, and it worked for the poor women too. Grameen Bank went to the poor, the women and the rurals. They worked on the philosophy, â€Å"The less you have, the more attractive a borrower you are for the Bank† (Calit2ube, 2007).He thus started a system that was then established all over the world. Muhammad Yunus is of the opinion that poverty is not created by the poor people, it is created by the system, by our mindsets and by our institutions. Microfinance enabled people to change their lives , it gave a mere 15$ to enable people to move away from a begging position to a dignified position.In an interview with Charlie Rose, Muhammad Yunus said that the system was to give money to poor people without collateral and a guarantee. The existing financial system served to only top one third people who have a huge amount of money and lent money to those who had money to give you collateral.They decided to give money to those who have no money to start with. It worked so well and expanded all over the world because there always was a crying need for it and nobody had ever paid attention to it (Rose, 2007). He has a strong conviction that such a system if grown exponentially can eradicate poverty from this world because poverty is artificially sown in the society and once that seed is removed, it can be eliminated.