Microfinance: The Grameen Bank Founded By Muhammad Yunus

2646 words - 11 pages

In the past years microfinance has flourished into an ever growing market for emerging small businesses around the world. Microfinance helps developing countries from all around the world able to obtain the financial help needed to launch small businesses. These people can empower themselves by taking small loans to finance their projects. Micro credit or small amounts of money exist as small loans given to entrepreneurs looking to empower themselves. The Grameen Bank innovation provided to people willing to help themselves. Muhammad Yunus, winner of the Nobel Peace Prize, invented the idea for the Grameen Bank. Yunus believes that “small loans can produce big dream” and that “micro finance has that ability to change the world.” Microfinance appears as an effective solution to reduce poverty. It can improve income and establish self sufficient businesses. It can also help with self employment and brings about change for a whole community.
Muhammad Yunus's wrote his autobiography, Banker to the poor: Micro-lending and the Battle against World Poverty. Yunus inspired by the hard working women in Bangladesh wanted to help them. Unable to get a loan from a formal bank many women works paid outrageous interest rates that they could not pay off and so were indebted. Stunned by this reality Yunus paid for many of the women’s debt of and gave them small loan with no interest. Yunus wanted to do more on a greater scale and so the foundation for the Grameen bank started.
In 1977 the Grameen Bank became a reality, helping 7 million people and loaning out a staggering amount of more than 6 billion loans. Yunus believed that everyone had the humane right to establish their own credit. In a quote from President Jimmy Carter expresses his feeling toward micro lending programs, “By giving poor people the power to help themselves, Dr. Yunus has offered them something far more valuable than a plate of food- security in its most fundamental form.”Yunus started the great movement in the hope to break the poverty cycle and eradicate poverty by micro-lending (Banker to the poor). Hillary Rodham Clinton believed in Yunus vision, “I only wish every nation shared Dr. Yunus's and the Grameen Bank's appreciation of the vital role that women play in the economic social, and political life of our societies.” Yunus believes that women show the most success in loans, “when women borrow money the beneficiaries are the children and the household.”
People with very low incomes cannot go about the conventional way to obtain a loan from a formal bank. At least 20 percent of the world gets payed only one dollar a day while 50 percent receives two dollars per day. The poverty cycle continues all around the word because the cycle seems to be hard to break. Poverty causes an over use of resources which leads to environmental degradation. More people are needed to sustain life which causes a high fertility rate. More people means fewer resources which bring the circle back to...

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