Muhammad Yunus from 0 to Nobel

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  • Topic: Muhammad Yunus, Microfinance, Bangladesh
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  • Published : January 14, 2013
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Case study
Muhammad Yunus and the Grameen Bank

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Executive summary :

The Grameen Bank of Bangladesh created the model for large-scale "micro lending" in the developing world, in the process becoming an institution known and respected internationally for a creative and effective approach to poverty alleviation. Grameen's willingness to make extremely small loans at relatively modest rates of interest to borrowers without traditional forms of collateral has allowed it to reach nearly six million borrowers in Bangladesh—one of the world's poorest countries—and to serve as exemplar for other micro-lenders serving the poor throughout the world. What's more, its founder, Muhammad Yunus, became internationally-known for his management of the organization; Yunus became among the best-known of what is said to be a new breed of leader, a "social entrepreneur" who sought to combine sound financial practices and income generation with social objectives.

This case tells the story of how Grameen grew from a small local experiment into a major force in Bangladesh serving more than 60,000 villages. It describes the stages of that growth—from a small organization staffed by volunteers to a sophisticated one with more than 17,000 employees. It tracks Grameen from its origins as a part of the state-owned bank system in Bangladesh to its role as a major financial organization, with special attention to the forms of financing which made its growth possible and management approaches employed to ensure that high quality customer service and reliable loan repayment continued as Grameen expanded its reach. It presents and invites discussion of the view expressed by its founder that Grameen represents an important new type of organization, a hybrid he described as a "non-loss business" employing the methods of a for-profit venture but with social objectives.

Bangladesh ….where the magic happened :
Bangladesh covers 144,000 square kilometers. Most of this tropical and very flat country lies in the deltas of large rivers originating in the Himalayas. Every year over a third of the land is flooded during the monsoon season. Other natural catastrophes that regularly plague Bangladesh and hinder the economic development of the country are droughts and cyclones. About 141 million people live in Bangladesh. Half the population is less than 21.5 years old. The population grows by nearly 3 million each 63 year. The average life expectancy is a bit less than 62 years. 53 percent of the males and 32 percent of the females 15 years or older can read and write. Bangladesh is one of the poorest countries in the world. A third of the people live in poverty. Unemployment – including under-employment – measures 40 percent. Two thirds of the people who have jobs work in the agriculture industry. In 2000 Bangladesh received 1.5 billion dollars in international economic aid. Economic growth is encouraging, at a low level of 5 percent per year.

Mohamed Yunus from Jobra to Nobel prize …. flash points : Professor Muhammad Yunus was born on June 28, 1940. He is the founder and managing director of Grameen Bank, which pioneered microcredit. This is a method of banking where small loans are given to the poor, mostly to women, without collateral, for income-generating activities, to help them get out of poverty. The third of nine children, Prof Yunus was born in the village of Bathua, Chittagong. His father was Haji Muhammad Dula Mia Shawdagar, a jeweler, and his mother was Sofia Khatun. In 1944, his family moved to the city of Chittagong, and he studied at Lamabazar Primary School. Later, he passed the matriculation examination from Chittagong Collegiate School. During his school years, he was an active Boy Scout, and travelled to West Pakistan and India in 1952, to Europe, the USA, and Canada in 1955 and to the Philippines and Japan in 1959, to attend Jamborees. In 1957, he enrolled in the Department of Economics at Dhaka University...
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