Dr Muhammad Yunus

Managing Director, Grameen Bank

Date of Birth: 28/06/1940
Place of Birth: Chittagong

The work of Grameen Bank, which shared the 2006 Nobel Peace Prize with Yunus, its founder, began in 1974 when Yunus handed US$27 from his own pocket to a group of 42 craftswomen. The group used the money to pay off debt and develop their business, and eventually repaid him. This was the beginning of microfinance.

Grameen has diversified: it works in fish farming, textiles and irrigation, as well as software, telecoms and renewable energy, all with an aim to improve the lives of the most impoverished. Meanwhile, the microfinance industry has blossomed in South America, Africa and Asia. Grameen gives small, unsecured loans to poor people, usually women, who normally have no access to credit. The interest rates are high (up to 20%) but Grameen claims to recover 98% of its loans. The loans make a big difference to borrowers, who are encouraged to reinvest their profits in their own small enterprises.

Born in Chittagong, Bangladesh, Yunus earned his MA at Dhaka University. He worked as an economics lecturer at Chittagong College before winning a Fulbright Fellowship to Vanderbilt University in the United States. He returned home with a Doctorate in Economics in 1971. It was while lecturing at Chittagong University, in the midst of the Bangladesh famine of 1974, that he began his famous $27 experiment.

Yunus remains busy at the head of Grameen, which by mid-2007 had distributed $6.8 billion to 7.4 million borrowers. The bank suspended repayments of loans in the wake of Cyclone Sidr, which devastated Bangladesh in November. Earlier this year, Yunus toyed with and abandoned the idea of starting his own political party. He is a founding member of the Global Elders, whose luminaries include Nelson Mandela and Desmond Tutu, that will offer advice on pressing global problems.