for National Geographic News
They call him the "banker of the poor." Now Muhammad Yunus can add Nobel Peace Prize winner to his resume.
The Bangladeshi economist and his Grameen Bank won the 1.4-million-U.S.-dollar prize on Friday for pioneering a new category of banking known as micro-credit, which grants small loans to poor people who have no collateral and who do not qualify for conventional bank loans. (Related: Nobel winners in medicine, physics, and chemistry.)
The program has enabled millions of Bangladeshis, almost all women, to buy everything from cows to cell phones in order to start and run their own businesses.
Similar micro-credit projects have helped millions around the world lift themselves out of poverty.
In 1997 fewer than eight million families had been served by micro-credit worldwide, according to the 2005 State of the Microcredit Summit Campaign Report. By the end of 2004 some 3,200 micro-credit institutions reported reaching more than 92 million clients, according to the report.
"Muhammad Yunus is a revolutionary in the best sense of the word," said Sam Daley-Harris, director of the Microcredit Summit Campaign in Washington, D.C. "He has promoted independence, not dependence, among millions of poor people."
Yunus, 65, founded the Grameen Bank, which means "rural bank" in Bengali, in 1976.
The idea was kindled two years earlier, as the South Asian country was suffering from a famine. (Related photos: Bangladesh's deadly monsoons.)
Working as a young economics professor at Bangladesh's University of Chittagong, Yunus lent the equivalent of U.S. $27 from his own pocket to 42 women in the village of Jobra who had a small business making bamboo furniture (Bangladesh map).
Since then, the bank he founded has made an estimated 5.7 billion dollars in loans to more than six million people in Bangladesh, 96 percent of them women.
Anyone can qualify for the loans, which average about U.S. $200.
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