Friday, June 2, 2006
Have we got a business deal for you! Build a state-of-the-art cell-phone network in one of the world’s poorest countries. And include among your target customers the country’s poorest citizens — many of whom live without running water, few of whom have ever seen a telephone. Laughable, right? Not when the entrepreneur behind this deal has spent 20 years building one of the world’s most remarkable financial institutions. Not when he ranks among the leading social innovators of his generation. “This is not the first crazy thing we’ve done,” says Muhammad Yunus.
Yunus, 57, is the founder of Grameen Bank, headquartered in Dhaka, Bangladesh. (Grameen is the Bangladeshi word for “village.”) He started the bank to provide desperately needed credit to his country’s desperately poor villagers. The business model he pioneered — called “microlending” — broke all the rules of traditional finance. Yunus focused on making loans as small as $30, just enough to get a microbusiness started. He did not ask for collateral. Instead, he required borrowers to organize into small groups and guarantee one another’s loans. And he ended up lending almost exclusively to women, who account for 94% of the bank’s customers.
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