Muhammad Yunus & Grameen Bank

Muhammad Yunus was born on 28 June 1940 in Chittagong, in what is now Bangladesh. After graduating from Dhaka University he went to the United States on a Fulbright scholarship, earned a PhD in economics from Vanderbilt University in 1969, and taught at Middle Tennessee State University before returning home after Bangladesh's independence in 1971 to head the economics department at Chittagong University. The famine of 1974 pushed his research out of the classroom and into the villages next door.

1. 1940

   Born in Chittagong

   Born 28 June in Chittagong, then British India, today part of Bangladesh.

2. 1974

   Famine reshapes his economics

   The Bangladesh famine drives Yunus into fieldwork. In Jobra, next to Chittagong University, he finds landless villagers — mostly women weaving bamboo stools — trapped by moneylenders charging up to 10% a week.

3. 1976

   US$27 for 42 villagers

   Yunus lends about US$27 of his own money to 42 villagers in Jobra. Every loan is repaid, yet local banks still refuse to lend to the poor, calling them uncreditworthy. The same year he launches the Grameen Bank Project as action research.

4. 1983

   Grameen becomes a bank

   In October 1983 the project is chartered as an independent bank under the Grameen Bank Ordinance, owned mainly by its borrowers.

Grameen inverted the logic of collateral-based banking. Instead of asking what the poor could pledge, it built repayment discipline out of social structure — small groups, weekly installments, and a client base conventional banks had written off.

In 2006 the Nobel Peace Prize was awarded jointly, in equal halves, to Muhammad Yunus and Grameen Bank — making Yunus the first Bangladeshi Nobel laureate. The committee framed poverty as a matter of peace: “Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means.”

for their efforts to create economic and social development from belowThe Norwegian Nobel Committee, 2006

The committee also underlined Grameen's founding conviction: that even the poorest of the poor, given the right conditions, can manage their own finances and their own development.

After microcredit, Yunus generalized the idea into the “social business”: a company created to solve a social problem, financially self-sustaining, whose investors recoup only their principal and take no dividend — the profit-maximization principle replaced by a social-benefit principle. Within the impact-investing spectrum this sits at the strictest end: impact investors typically pursue financial return alongside social impact, whereas Yunus's third principle rules dividends out entirely. His long-running attacks on for-profit microfinance kept him in open tension with parts of the mainstream field.

• 1 · The objective is to overcome poverty, or to tackle problems that threaten people and society — education, health, technology access, the environment — not to maximize profit.
• 2 · The company is financially and economically sustainable.
• 3 · Investors get back only their investment; no dividend beyond the principal.
• 4 · Once the investment is repaid, profit stays with the company for expansion and improvement.
• 5 · Gender sensitive and environmentally conscious.
• 6 · The workforce gets market wages with better working conditions.
• 7 · Do it with joy.

Landmark ventures

Three lines of criticism have followed Grameen and microcredit: what the randomized evidence actually shows, what commercialization did to the field, and a fifteen-year collision between Yunus and Sheikh Hasina's government.

• Evidence — the first large randomized trial (Banerjee, Duflo and co-authors in Hyderabad, published 2013–2015) found more borrowing and business investment, but no significant gains in consumption, income, health, education, or women's empowerment over 1.5–3.5 years. A 2015 review of six RCTs concluded microcredit's effects are “modestly positive, but not transformative”.
• Commercialization — as parts of the industry turned for-profit (Mexico's Compartamos IPO in 2007 with rates reported near 100%; India's SKS raising US$358 million in 2010 before the Andhra Pradesh crisis of over-lending and borrower suicides), Yunus denounced the “new loan sharks” in a 2011 New York Times op-ed, Sacrificing Microcredit for Megaprofits, and proposed capping rates at cost of funds plus 15%.
• Documentary allegations — Caught in Micro Debt (2010) documented multiple borrowing and debt spirals, questioned Grameen's effective rates and repayment arithmetic, and alleged that 1996 Norwegian aid had been shifted to sister organization Grameen Kalyan. Norway's review concluded in December 2010 that there was no indication funds were misused or that Grameen was involved in corruption.
• 2011 removal — in March 2011 Bangladesh's central bank removed Yunus, then 70, as managing director for exceeding the legal retirement age of 60; the courts upheld the move and he left on 12 May 2011. Commentators noted the age issue had been known for years and read the decision as political; a 2013 law then tightened government control over the bank.
• The Hasina years — the feud is usually traced to Yunus's brief 2007 attempt to launch a political party (Nagorik Shakti). Under Hasina more than 150 cases were filed against him and his companies; on 1 January 2024 a Dhaka labor court sentenced him to six months in jail (he was granted bail), a verdict widely viewed abroad as political persecution — and overturned on appeal on 7 August 2024, days after Hasina's fall.

1. 2024-08

   Sworn in as Chief Adviser

   After the July uprising over job quotas became a nationwide revolt, Sheikh Hasina resigned and fled to India on 5 August. Student leaders named Yunus to head the transition, and on 8 August the 84-year-old was sworn in as Chief Adviser of the interim government, with two student leaders in his advisory council.

2. 2024-09

   Reform commissions and the July Charter

   The interim government set up six reform commissions — elections, police, judiciary, public administration, anti-corruption, constitution — feeding the July Charter reform package. Its record drew criticism too: the Awami League was barred from the election under anti-terror law, and observers flagged a slowing economy, worsening law and order, and pressure on the press.

3. 2025

   Grameen ownership reform

   An amendment to the Grameen Bank ordinance cut the government's stake from 25% to 10% and lifted borrowers' ownership to 90%, with the chair elected by the board and supervision moved to the central bank — reversing the 2011–2013 state takeover. Critics saw a conflict of interest in tax breaks granted to Grameen-linked bodies.

4. 2026-02-12

   Election and referendum

   Bangladesh held parliamentary elections and, the same day, a referendum on the July Charter. The BNP-led alliance won about 212 of the 297 declared seats — a two-thirds majority — with the Jamaat-e-Islami-led bloc (about 77 seats) becoming the main opposition; turnout was 59.88%, and the charter passed with 60.26% approval.

5. 2026-02-16

   Handover

   Yunus delivered a farewell address and stepped down as BNP leader Tarique Rahman was sworn in as the 11th prime minister. He congratulated the winners on their landslide and urged that the democratic practice, free expression, and basic rights now under way not be interrupted.

As of late July 2026, Yunus — now 86 — holds no public office; at the time this page was compiled, no reports had surfaced of him taking a role in the new government.