"Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives."


Muhammad Yunus was born in the city of Chittagong in 1940, back when it was in the Indian territory of Bengal but shortly before this territory became East Pakistan. During his childhood this city was the largest port in Bangladesh and he lived on one of the busiest streets of the city. From a young age His father immersed Yunus in the culture of commerce. Just below Yunus’ childhood home was the floor above his father’s jewelry shop where he made a decent living for his wife and 9 children.

Both of Yunus’ parents instilled important virtues for Yunus at a young age. His father spent freely on his education while giving him a modest allowance for his academic achievement in an attempt to instill the importance of education and hard work in the boy's life. His mother, a kind and loving woman, showed him the importance of those same virtues. His father reflected those virtues as his mother’s mental state deteriorated throughout the later part of his childhood by doing everything in his power to alleviate those symptoms and standing faithfully by her side till her death in 1983.

Through his parents support and his own hard work, he graduated primary school and Chittagong University with top marks, landing a teaching position at the university. While teaching, Yunus extended his father’s legacy of commerce by opening his own packaging plant. He did so through a loan from a commercial bank. With the guidance and encouragement of his father, he was able to pay back the loan early. Yunus comments in his autobiography that he was likely one of the few in Bangladesh who paid a loan back before it was due.
Despite his commercial success, Yunus’ passion for learning and study was not satisfied in Chittagong. In 1965 he received a Fulbright Scholarship to earn his PhD at the University of Colorado. He jumped at the opportunity.

His studies in Boulder, Colorado had a profound effect on Yunus particularly from a cultural standpoint. He was shocked yet intrigued by the amount of authority he was given in his own studies. Instead of being told to sit and absorb the knowledge of his professors, U.S. professors acted as if he had some knowledge and could actually contribute something to the class.

Additionally U.S. woman surprised and at times even scared him. At his Bengali university, women were outnumbered by men by more than five times and were even segregated! Additionally throughout Bangladesh, and especially the rural villages, Muslim practice of purdah was common which in some strict interpretations disallows married woman from talking to any man that is not her husband. His home environment led to Yunus being more than a little shy around woman.. In his autobiography he asks the reader to imagine his “dismay when I arrived in the United States in the summer of 1965! The campus was alive with rock music. Girls would sit on the lawn with their shoes off, sunning themselves and laughing. I was so nervous, I tried to not even look at them” (Yunus 17). Eventually he overcame his timidness and he even married a U.S. that he had met while attending the university.

After earning his PhD, he went to teach in Middle Tennessee State University. During this time Bangladesh which was at this point East Pakistan began a war to liberate themselves from the western half of the country. With other Bengali scholars and politicians based in America, he helped to organize a solidarity movement. He developed his political clout and relationship building during this time. His political organizing at this time helped to garner American support for the liberation of Bangladesh. At the close of the war in 1971, Bangladesh was its own independent nation. At this time Yunus felt a calling to return to his home nation to help rebuild Bangladesh into the best nation that it could be.

Institutional Challenge

Upon Yunus’ return to his newly independent home country he was offered the position of head of the Economics Department at Chittagong university. He had spent the last 13 years of his life as a teacher and student in various capacities and believed that he had found his calling. With the economic principles and models that he had developed and learned in the U.S he hoped to teach and lead a new generation of students into a new Bangladesh, one not marked by oppression and poverty of economic prosperity and entrepreneurial spirit.
The country he returned to provided a stark reality in comparison to his idealized Bangladesh. The university was not immune to many of the problems. Accusations of plagiarism were rampant. Students fresh from the liberation war still carried around their weapons from class to class. In 1974, a nationwide famine struck the country pushing the poor out of jobs and the poorest of the poor to death.

Neighboring Chittagong University was the tiny village of Jobra. This tiny village brought the true face of poverty to Yunus’ and his students’ attention. That face was pale, sunken and weak. Those faces were unavoidable. Those faces that he could see just outside the university windows made him dread the lectures of economic prosperity that he had so passionately expressed before. Yunus himself asked “what good were all my complex theories when people were dying of starvation on the sidewalks and porches across from my lecture hall? My lessons were like the American movies where the good guys always win” (Yunus viii). He goes on to conclude that “Nothing in the economic theories I taught reflected the life around me. How could I go on telling my students make-believe stories in the name of economics” (Yunus viii)?

Yunus struggles with the theories that he had been taught was expected to disseminate to his students. He did not know how to sit in the walls of the university and espouse economic theories that left people shrinking to a husk within sight of the university. He was not prepared to face this reality. He led a charmed and free of worry compared to the poor in his country. His reality was marred by his middle class lifestyle where he had the luxury of an allowance as a child. He went to school and was paid for that by his parents. He did not have to work with his family and avoid school just to put food on his plate. He had to disregard his years of schooling and relearn economics. He had to step out of the house that he was raised in and walk the dirt paths of a rural village. He had to learn the economics of the poor.

With a newfound challenge Yunus entered the village of Jobra to discover the true economics of the poor.[1] Considering that the nation was caught in a famine he went to farmers, and landowners in order to improve crop yield. With the help of a few farmers he set up a cooperative to increase production during the dry season. While the program was successful at increasing the yield, he found that the farmers had failed to repay him the money he had invested. Not to be disheartened he went back into the village with his students to look at other means of support.[2]

He traveled throughout the village to discover study poverty at ground zero. On one of his travels throughout the village, Yunus met a stool maker by the name of Sufiya Begum. This woman and her family lived on roughly 2 cents a day from the profits of her labor. She lived on these two cents because she needed to borrow 22 cents to cover the cost of material for her stool. She was able to borrow money from what is known as a money lender but only with the agreement that she must sell that stool back to the money lender for whatever price he demands. Ms. Begum and her family seemed as if they would be forever trapped in the cycle of poverty and virtual slave labor because she could not afford the cost of her own materials.1

To Yunus, Breaking this cycle seemed as simple as giving her the 22 cents she needed to buy her own materials and be free to sell her product at a fair price. In the end, that’s just what Yunus did. He found 41 other similar victims and found that they needed a total of $27 to lift them from the clutches of other similar money lenders. He loaned the money from his own pocket and found that each and every one of those 42 people were able to pay Yunus back after breaking free from that cycle. If more poor people could get access to such small amounts of credit they too would be able to break that cycle.

Yunus realized that the solution was precisely this simple. Just lend out small amounts of money. Yunus approached banks big and small in and around Chittagong to persuade them to give to the poor. Each and every time he received hesitations and reservations. The poor have no collateral or they are illiterate and cannot sign the forms.

Disheartened by the reluctance of established banks to lend to the poor, Yunus became a creditor himself, eventually formally establishing the Grameen (Bengali for rural) Bank in 1983.[3] Through Grameen, Yunus has found his true passion and practice. This practice is distilled down to community building. Yunus has not turned himself into one of the many devious money lenders who prey on the poor. Yunus has turned to what he calls a social enterprise.

There are few who would dedicate their lives to such a project so whole heartedly, even fewer from the privileged background that Yunus has had. By exercising the virtue of Loving Kindness he is able to do things with credit in the community that no one has been able to on such a scale. In order to take that kind of risk and put so much faith into the hands of the poor takes a deal of Loving Kindness. To know that your fellow human being has the skills and capabilities to lift themselves out of desperation with a little help is a great virtue.


Choice Worthy Good

The good that Yunus had to choose above all others in the starting of Grameen was Trust. In order to dive into such a project takes an incredible amount of trust. Trust is important for this discussion because it is the single most important thing in human interaction. The Grameen banker meets on the terms of the poor, in their village and works to develop a relationship with that individual. Grameen does business as business should be as a trusting relationship with two individuals. Modern business and finance have eliminated the concept of trusting another individual and replaced it with contracts.

There was no trust to be found in all the banks of Bangladesh and in any traditional banking structure throughout the world at the time. Bankers hide behind documents, signatures, and collateral to avoid ever actually trusting another human. They remove all layers of humanity from commerce and try and take that person down into a 1 dimensional sheet of paper. Grameen does away with all that. Accepting any and all provided they have a sense of entrepreneurial spirit and have an idea to improve their livelihood. Grameen reintroduces that human interaction back into the mix.

Cultural Ill

Grameen has since expanded to serve over 7 million borrows all around Bangladesh, and Micro-Finance has expanded into over 100 institutions located all over the globe. Grameen has evolved to tackle a number of different issues surrounding poverty now. Not only are loans given to income generating activities but to adequate housing and most recently student loans. These are additionally vital to ending the cycle of poverty. As many of the micro-entrepreneurs that Grameen finances work from home, a roof that doesn’t leak is vital to their economic success and family. To further remove the young generations from poverty, student loans are given out to ensure quality employment from the generations to come from Grameen borrowers. Additionally as the borrowers of Grameen are the shareholders, all profits not invested into expanding the scope of Grameen go back into the pockets of the same people Grameen hopes to serve.3
This kind of enterprise looks to make sure that there are positive impacts in the community they wish to serve. Grameen’s indicators of success are driven entirely by how they are affecting poverty in the villages they associate with not on maximizing profits. For example, high return rates on income generating loans do not only mean that Grameen has made a sound investment. This means that the poor stool maker who requested that loan is now able to buy her own materials and work for herself rather than at the preying hands of a money lender.
Each loan is not a grand step at alleviating poverty. There are still a host of problems that afflict the poor but returning that sense of control over one’s life and allowing that person to succeed and flourish on their own terms is the first step. By allowing this to happen for millions of people, Muhammad Yunus has set a world standard in alleviating poverty.
Yunus continued to individually visit each bank of Grameen up until there was 1,000 branches in Bangladesh. Sadly, Yunus has since been removed from the managing director of Grameen due to an agreement he had made with the Bangladeshi government in 1983 but he still travels throughout the world assisting in starting similar pilot programs in places throughout Africa, Latin America, and even the U.S.2

[1]Yunus, Muhammad, and Alan Jolis. Banker to the poor: the autobiography of Muhammad Yunus, founder of the Grameen Bank. Aurum Press, 1998.
[2] Esty, Katharine. "Lessons From Muhammad Yunus And The Grameen Bank." OD Practitioner 43.1 (2011): 24-28. Academic Search Complete//. Web. 1 Nov. 2013.
[3]Yunus, Muhammad. "Nobel Peace Prize 2006 Acceptance Speech." Nobel Lecture. Norwegian Nobel Committee. Oslo. 10 Dec 2006. Address.