Nikita Arora's Blog

In 1974, Professor Muhammed Yunus, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she had been able to raise herself above subsistence level.

Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of  $27  to 42 basket weavers. And against the advice of banks and the government, Yunus carried on giving out micro-loans and in 1983, formed the Grameen Bank. Since it was entirely built on the principles of trust and solidarity, Grameen Bank has a recovery rate higher than any other banking system, i.e, 98% of the loans are paid back.And, on any working day, Grameen Bank collects an average of $ 1.5 million in weekly installments by serving 2.1 million borrowers in 37000 villages through 1084 branches in Bangladesh.

Based on his vision of the total eradication of poverty from the world, Muhammed Yunus claims that Grameen is a message of hope, a program fro putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long ! He received the Nobel Peace Prize in October 2006 for his exemplary vision and work in the field of Social Entrepreneurship.

For more information, visit the website www.grameen-info.org