Dr. Muhammad Yunus

Dr. Muhammad Yunus, a Bangladeshi social entrepreneur, economist, and Nobel Peace Prize laureate, is best known as the pioneer of microfinance and microcredit—revolutionary concepts that have empowered millions of impoverished people worldwide. His visionary approach to combating poverty by providing small loans to the poor, especially women, has not only transformed lives in rural Bangladesh but has also sparked a global movement toward inclusive finance and social business.

Born on June 28, 1940, in Chittagong, then part of British India and now Bangladesh, Muhammad Yunus grew up in a middle-class family that valued education. He pursued his undergraduate studies in economics at Dhaka University, later earning a Fulbright scholarship to study in the United States. There, he completed his Ph.D. in economics at Vanderbilt University and went on to teach at Middle Tennessee State University.

Muhammad Yunus was born on June 28, 1940, in Chittagong, Bangladesh (then part of British India). He grew up in a supportive and educated family, with a strong emphasis on values, education, and empathy. His academic talent became evident early, leading him to study economics at Dhaka University. Later, he received a Fulbright scholarship and completed his Ph.D. in economics at Vanderbilt University in the United States.

After teaching for some time in the U.S., Yunus returned to Bangladesh in 1972, following the country's independence from Pakistan. He joined Chittagong University as the head of the economics department. However, his academic knowledge soon collided with the grim realities of rural poverty, prompting him to seek practical solutions outside the traditional classroom.

Despite his success abroad, Yunus felt a deep calling to return to his homeland. In 1972, shortly after Bangladesh gained independence, he returned to help rebuild the war-torn country. He became the head of the Economics Department at Chittagong University and began exploring how economic theory could be used to address the real-life struggles of Bangladesh’s rural poor.

The concept of microfinance was born from a simple, yet powerful, realization. In 1976, during a visit to the village of Jobra near Chittagong University, Yunus encountered women who were trapped in a cycle of poverty because they lacked access to small amounts of capital. These women borrowed money from local moneylenders at exorbitant interest rates just to buy materials to make bamboo stools, earning barely enough to survive.

Yunus personally lent $27 to 42 women to help them break free from their dependence on loan sharks. To his amazement, they repaid every penny. This experiment laid the foundation for what would become the Grameen Bank—a bank dedicated to providing microloans to the poor without collateral.

In 1983, the Grameen Bank was officially established with the support of the Bangladeshi government. Its model was revolutionary: it provided small loans to impoverished entrepreneurs, primarily women, to start or expand small businesses. The focus on women was deliberate—Yunus observed that women were more likely to invest in their families and communities, leading to long-term improvements in education, health, and economic stability.

Yunus’s vision extended beyond microfinance. He introduced the concept of “social business”—a business model designed not to maximize profits but to solve social problems. In his book Creating a World Without Poverty, Yunus outlines how social businesses can be a sustainable alternative to both profit-driven capitalism and donation-based charity.

He partnered with global corporations such as Danone and Adidas to launch social businesses aimed at providing affordable nutrition and footwear to the poor. These ventures proved that companies could be both financially viable and socially impactful.

While Yunus’s contributions are widely celebrated, the microfinance industry has not been without controversy. Critics have raised concerns about high interest rates, aggressive loan collection practices, and over-indebtedness in some regions. Yunus himself has acknowledged these issues and has been a vocal advocate for ethical standards and transparency in the microfinance sector.

In 2011, Yunus faced a political and legal dispute with the Bangladeshi government, which led to his removal from Grameen Bank. Many observers viewed this as a politically motivated move, but Yunus remained undeterred, continuing his advocacy for social business and poverty eradication on the global stage.