In 1974, Professor Muhammad Yunus, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of $27 to 42 basket-weavers. He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty.Against the advice of banks and government, Yunus carried on giving out 'micro-loans', and in 1983 formed the Grameen Bank, meaning 'village bank' founded on principles of trust and solidarity. In Bangladesh today, Grameen has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 94% are women and over 98% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below.
Muhammad Yunus: Entrepreneurship is about solving problems; about addressing the issues of the world around yourself. It’s not just making money. That’s what I meant by entrepreneurship. Entrepreneurship is something that we carry with us as a human being. We came on this planet to solve problems. We solve problems all around us, and we continue to solve that problem and that’s how we survived. We were in adverse circumstances when we came to this planet, but we were not frightened by that adverse circumstances. We took them by grip and, one by one, we tried to solve them and we kept on solving them. As a result we came millions of years on this planet and survived and successful. So that’s entrepreneurship. Any human . . . Any human capability used for solving problems for mankind, for the planet, I’ll consider this entrepreneurship.
Recorded on: 1/23/08