For Muhammad Yunus, founder of the Grameen Bank who just won the Nobel Peace Prize, access to credit is a human right. Providing credit to the world’s poor, Yunus believes, clashes with the profit-maximizing goal of conventional banks. However, entrepreneurs, such as eBay chairman Pierre Omidyar, are looking to transform microfinance institutions into revenue-driven businesses that raise money in the capital markets instead of depending on donations.
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.