Microcredit Entrepreneur Wins Nobel Peace Prize

A simple business plan based on the concept of microcredit just won Bangladeshi economist Muhammad Yunus the Nobel Peace Prize. Yunus was awarded the prize today for the bank he founded, the Grameen Bank, which provides average loans of only $200.

A pioneer in the use of such small loans, Yunus founded the Grameen Bank in 1983 in an effort to help poor Bangladeshis who didn’t qualify for bank loans. At the Grameen Bank, no collateral or credit history is needed, and individuals who take out loans are held to a simple standard: the honor system.

As a result, anyone and everyone qualifies for a loan. A scary prospect to consider if you’re the lender. But amazingly, the bank has a 99 percent repayment rate, which is attributed to the method of lending through social responsibility. Loans are given to individuals in groups of five. Initially, two of the five group members are given a loan, and only after they repay the loan in full are the three remaining borrowers eligible for funds.

An amazing 97 percent of Grameen Bank’s 6.6. million borrowers are women who need start-up capital for their own handmade crafts. An estimated 17 million individuals have received $5.72 billion in loans since the Grameen Bank’s inception.

Because of the bank’s success, Yunus has expanded the enterprise to include more substantial loans for houses, fisheries, and secondary education. However, small loans for things like chickens, clothing, and personal enterprise still make up almost all of the Grameen Bank’s transactions.

As the first Nobel Prize winner from Bangladesh, Yunus plans to continue his quest to alleviate poverty by using his share of the $1.4 million award money to create a discount food company and an eye hospital in Bangladesh.

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  • fsosa

    Listen to what Muhammad Yunus has to say about his experiences and help us take this message to more people around the world.

    Ashoka: Inovators for the Public - www.ashoka.org - just launched an ambitious subtitling project with dotSUB (www.dotsub.com/nobel), a new site that lets you translate films line by line. The plan: volunteers translate one video on Muhammad Yunus and one on Ashoka founder Bill Drayton into 100 languages in time for the Nobel ceremony on December 10th. Go on, translate a few lines (www.dotsub.com/nobel)and learn more about what this Social Entrepreneurs have done. You will be giving people all around the world the opportunity to enjoy and learn from this videos...


    I heard about this project when it first started. Recently we have begun a project like this in our present country. The response has been great. The comments of friends has been totally different.

  • aw

    Sir Tom Farmer runs a similar programme in Australia for people wanting to set up business and has achieved similar results. Great idea and shows that there is good in the worls.

  • Dave Zirnhelt

    It is truly amazing what a small amount of money invested in the right hands can accomplish. I'm glad to see that Muhammad has received such a high recognition for this accomplishment and hopefully he can teach and inspire people everywhere to make a difference. I'd like to see any links anyone has to resources related to this.

  • Lupe Martinez

    I heard about this man and the bank loans years ago. So glad to see that he has helped so many to really help themselves. I am even happier to hear that his generous (and good business) efforts have been recognized and awarded. He is an amazing role model.

  • mahendra kumar dash

    A visionary and a great man.First time ,a banker has got the highest recognition in Peace in which money and decent living plays a very significant role.

  • mahendrakumardash

    He is simply a great man.Beggars are his clients and the same beggar is not a defaultee which his
    bank ensures.

  • Maria Hidalgo-Ferretti

    Inspiring, enlightening and definitely something to think about. It is amazing what people can achieve when we act for the good of all and in a pure spirit of service. Would it be not wonderful if we woke up everyday to this kind of news? I believe that, even in small ways, we can all contribute with the seed of prosperity for humanity from where we are right now in our lives. One idea at a time...