Muhammad Yunus and the idea of microcredit
2:44 From: TheGreenChildren
The stunning success and brilliant idea of microcredit is inextricably linked with his name: Muhammad Yunus. It was in the 70s as Bangladesh suffered from an economic crisis. The former teacher of economics tried to convince a bank manager to lend money to poor people:
Yunus: Please lend the money to the poor people.
Bank manager (shocked and surprised): The bank do not lend money to the poor people. That’s not our job. We lend money to people, who already have money.
Yunus: Isn´t that funny? You give money to people who already have money, but you don´t want to give money to the people who don´t have money.
Bank manager: Sorry, no can do. Poor people are not creditworthy!
And so it happened that Grameen Bank founded by Muhammad Yunus (1976) and based in Bangladesh provided self-employed workers with small loans in one of the world´s poorest regions and without requiring collateral. By the beginning of 2003, the bank had loaned about USD 4.0 billion, 97% are women. After nearly a decade of continuous optimization and against all odds due to his resoluteness, persuasiveness and power he succeeded in finding a cost-effective way lending small loans (less than USD 150,00 mostly) to 2.9 million borrowers in 42,000 villages without loss. The repayment rate is 98%. Due to this innovation he helped the microcredit revolution around the globe to make the breakthrough. In 2001 with at least 2.186 microcredit programs this movement reached 27 million of the world’s poorest families.
Thanks to the added income, which they generate with the aid of the loans, today millions of villagers are able to provide a better diet for their families, to send their children to school and to increase their personal savings.
