Who founded the Grameen Bank of Bangladesh?

Professor Muhammad Yunus, born in 1940 in Chittagong (Chattogram), is a Bangladeshi economist and social entrepreneur known as the pioneer of microcredit and microfinance.

In 1976, while teaching economics at Chittagong University, Yunus visited the village of Jobra and saw poor women, who made bamboo stools, trapped in debt to moneylenders charging very high interest. He lent a total of 27 US dollars from his own pocket to 42 women, who were able to repay it. This led him to develop the idea of giving small loans, without collateral (security), to the very poor, especially women, so that they could start small businesses and escape poverty. The loans were given to members of small groups, whose mutual support and peer pressure encouraged repayment.

The Grameen Bank ("village bank") began as a project in 1976 and became a formal, independent bank under a special law in 1983. Most of its borrowers are poor rural women, and it reported very high repayment rates. Its model has been copied in many countries.

Muhammad Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize in 2006 "for their efforts to create economic and social development from below". He also received the US Presidential Medal of Freedom (2009) and the US Congressional Gold Medal (2010). He promoted the idea of "social business", a business designed to solve social problems rather than to maximise profit.

In August 2024, after mass student protests led to the resignation of Prime Minister Sheikh Hasina, Muhammad Yunus was appointed the Chief Adviser (head) of Bangladesh's interim government.

In India, the Self-Help Group-Bank Linkage Programme of NABARD follows a similar idea of group-based microcredit.

Why not the other options?

• ✗Amartya Sen, an Indian economist, won the Nobel Prize in Economics in 1998 for welfare economics.
• ✗Sheikh Mujibur Rahman was the founding leader of Bangladesh.
• ✗Fazle Hasan Abed founded BRAC, a large development organisation in Bangladesh.