Main Biography

Muhammad Yunus was born in 1940 in a small village, Bathua, in the Chittagong province in what was then part of India, still under British colonial rule (Banker to the Poor). His family was poor, with five of his 13 siblings dieing in
Where Bangladesh is in Asia, and a map of Bangladesh; Chittagong is the green section in the bottom right hand corner
infancy, though the rest were able to get by with the money from his father Hazi Dula Mia Shoudagar’s job as a jeweler (http://encarta.msn.com/encyclopedia_701835574/Muhammad_Yunus.html). As for his other parent, Yunus said that it was his mother Sofia Khatun, “by her concern for the poor and the disadvantaged, who helped [him] discover [his] interest in economics and social reform” (Banker to the Poor, 5). Only a few years later, in 1947, the British left India, which split into India and Pakistan. Chittagong was part of the new nation of Pakistan, though there were many cultural differences between the section that he lived in and the rest of Pakistan, which would later lead to another split. Yunus’ family moved to the actual city of Chittagong, where his father found more work and he lived for the rest of his childhood.

Bengali independence movement members
In Chittagong, Yunus attended Chittagong College and then Dhaka University. He was a very good student, and after graduating was able to get a Fulbright scholarship to continue his education, which had settled on economics, in the United States of America at Vanderbilt University. He married Vera Forostenko, another student, and they had a daughter. With his Ph.D in Economics, he taught at Middle Tennessee State University in Murfreesboro, around 1970 (http://www.notablebiographies.com/newsmakers2/2007-Pu-Z/Yunus-Muhammad.html). In 1971, the tensions in Pakistan erupted in a civil war that eventually cut part of the country, including Chittagong, away into what became Bangladesh. Feeling nationalistic pride, Yunus started a group in the town he was living in of others born in Pakistan who wanted a Bangladeshi state. Soon after he went to a demonstration in Washington DC, calling for the United States to stop supporting Pakistan in this struggle. After Bangladesh became recognized as a sovereign nation, Yunus decided that he wanted to go back to his homeland. Unfortunately, his wife did not want to move, and they divorced, with his child continuing to live in the United States. After he had moved, he became a professor of economics at Chittagong University.

It was here that he would really begin his work to help the poor. In the fledgling nation that was still recovering from the war and building




Rice field in Bangladesh
infrastructure, many people were in economic hardship. One particularly important problem was a lack of enough food. Though there was a lot of farmland, not all of it was being used, and what was being used was not used very efficiently: “specialists estimated that the existing land yielded only 16 percent of [its] crop potential” (Banker to the Poor, 36). A famine, starting around 1974, deeply worried Yunus, who, with the support of other professors, wrote a statement to the press calling for more attention to be given to the food shortage. Quickly, other schools and groups took up the call. He began to look at the dilemma at a local scale, visiting the poorer villages around the university both by himself and with some of his classes. Despite his background in economics, Yunus took it upon himself to research methods of improving harvests, and helped local farmers try varieties of crops with better yields along with instructing better methods of planting. He also came up with a plan where poor sharecroppers, rich landowners, and himself would cooperate to increase production. Sharecroppers would provide labor, landowners would provide land, and he would provide better seeds, fertilizer, knowledge in better farming techniques, fuel for a mechanical well, insecticides, and he even offered that he would cover any losses. In return, each of the three parties would receive one third of the harvest. He eventually convinced them all to try it. The farmers got a good crop and were happy, and though he lost money because he was not given a third of the crop, he felt that the plan had succeeded. He soon noticed that the plan did not help everyone equally, however. Those who started with more money, such as richer farmers, benefited more than those who were poorer, such as the women who had to separate the grain from the husks in mindless but hard labor.

Yunus’ creation of microcredit, a much more successful endeavor, followed not too long afterwards. One day, walking through a poor town with another teacher, he saw a bamboo stool maker. After talking to her, they learned that she lived by buying raw materials from a trader and then giving the finished product to the trader, to pay for the costs of the materials (around $0.22) along with a pitiful profit (only about $0.02 per stool). Making one stool a day gave her a daily income of two cents (World Poverty: a Reference Handbook, 129). She had three children, and was just able to get by on the income from this work. Hearing this story had a profound impact on Yunus, who “in [his] university courses theorized about sums in the millions of dollars, but here before [his] eyes the problems of life and death were posed in terms of pennies” (Banker to the Poor, 48). This woman’s plight bothered Yunus, and he came to the conclusion that she could improve her life if she were able to buy the bamboo herself instead of buying it with debt. Loan sharks charged as much as 10% interest per week, and kept people constantly repaying and then taking out more money at extravagant rates (http://encarta.msn.com/encyclopedia_701835574/Muhammad_Yunus.html). With the help of a student of his, Yunus found 42 other people who were held in debt by a total of less than $27. He lent them this money, and they quickly paid him back. Having just brought 43 people, though still poor, out of debt with a small loan that was repaid, he realized that this model would work on a larger scale. He brought the idea of providing loans to destitute people to banks, who immediately discarded the idea. He then took out a loan from a bank with himself as guarantor and then distributed the money to those in need. He got his money back shortly thereafter and paid the bank, but the banks still did not believe in his idea.
Grameen Bank in Dhaka (capital of Bangladesh)
Yunus decided to create his own bank, the Grameen Bank (meaning Bank of the Villages in Bengali), but the government only allowed him to do so after two years. As part of the procedures that he set up, anyone who took out a microloan had to agree to 16 statements, including agreeing “to not harm the environment, maintain families of a reasonable size, educate their children, plant vegetables for their families and sell the surplus, build and use pit-latrines, and avoid dowries” (because families would often go into debt to create a large dowry). To prevent people from taking money and not paying it back, he devised a system where money was given to small community groups, which were responsible for making sure that the money was paid back (mainly using peer pressure and constant reminders); if money was not paid back, then the group was not allowed to take out another microloan until the previous loan had been paid for. This worked remarkably well, with more loans being paid off than those of regular banks with only 1.5% of loans being defaulted on, contrary to what the banks had thought about the idea beforehand (http://www.notablebiographies.com/newsmakers2/2007-Pu-Z/Yunus-Muhammad.html). Women did not have as many rights as men in Bangladesh, and Yunus wanted to help address this problem by lending more money to women. In addition, he found that when women got money, they were more likely to use it well than men. Currently most loans are given to women, and many women entrepreneurs have started businesses due to microloans from Grameen Bank. In 2006, Yunus and the Grameen Bank received the Nobel Peace Prize for their progress towards the goal of eliminating poverty. Today, the bank has provided over $5 billion in loans, “operates in 70,000 villages, and 97 percent of its 6.6 million borrowers are women … [and] employs 20,000.” (http://www.notablebiographies.com/newsmakers2/2007-Pu-Z/Yunus-Muhammad.html).

Not content to rest on his laurels, Yunus expanded the Grameen Foundation to include many ambitious projects that have all turned out well. One project supplies solar panels and other renewable energy sources to villages. Another expands on the microcredit idea by offering loans to beggars to buy things such as chickens to sell their eggs; this program currently benefits over 80,000 (http://www.notablebiographies.com/newsmakers2/2007-Pu-Z/Yunus-Muhammad.html). In a joint project between Grameen and the Danish company Danone/Dannon, he has created a social business (only to bolster the reputation of those involved) that sells cheap baby formula to villages in Bangladesh. Yet another part of Grameen sells phones to entrepreneurial women as pay phones for villages, and is working on a similar project to bring internet access to remote parts of Bangladesh.

Muhammad Yunus is an author, an economist, a humanitarian, and more. Over the years of his life so far he has helped Bangladesh become its own country, created a microcredit industry that has inspired others across the globe, founded a foundation that is helping the poor in Bangladesh in many ways, and won a Nobel Peace Prize, to name a few accomplishments. He continues his work today, and can safely be said to be someone who has made a difference in the world.