TITLE: A Man with a Vision
The man being moved by the sufferings of the poor man thought to do something for them. He visited different places and enquired about their condition. One day while thinking about the issue an idea came his mind. Giving small loans without any collateral might help them to become entrepreneur. The rural poor have enough potential in them but they do not have access to capital as the conventional Banks do not give loans without any collateral.
He then started a microcredit project in a village named Jobera near the University of Chittagong, where he was working as a professor of economics. That man was Dr. Muhammad Yunus, popularly known as ‘Banker to the poor’. That project was immensely successful and later on the idea replicated in Tangail District with the help of Central Bank of Bangladesh. Soon he was able to institutionalize the project and a formal bank named ‘Gramen Bank’ started its operation by a government ordinance on October 2, 1983. The banks success continued and it soon spread to various other districts of Bangladesh.
The story of success attracted international donors and more recently, the bank has started bond selling as a source of finance. Gramin Bank is best known for its system of solidarity lending. Solidarity lending is a cornerstone of microcredit and the system is now at work in over 43 countries. Although each borrow must belong to a five-member group, the group is not required to give any guarantee for a lone to its member. Re payment responsibility colely rests on the individual borrower, while the group and the center oversee that everyone behaves in a responsible way and none gets into a repayment problem. One unusual feature of the Gramen Bank is that it is owned by the poor borrowers of the bank, most of whom are women. Of the total equity of the bank, the borrowers own 94% and the remaining 6% is owned by the Government of Bangladesh. Another important feature is that 98% of these borrowers are rural women and thus it has tremendous effect on women empowerment side by side eradicating poverty.
Dr. Yunus received several prestigious awards including the highest civilian award in Bangladesh, the Independence Day Award, in 1994. However, the greatest recognition of the Banks achievements came on October 13, 2006, when the Nobel Committee awarded Gramen Bank and its founder, Mohammed Yunus, the 2006 Nobel Prize “For their efforts to create economic and social development.