What is Microfinance?
Does the name Muhammad Yunus ring a bell? If not, it will by the end of your year as a SEED member. Being a club that engages with ideas of socio-economic development, Muhammad Yunus and his work in the field is something we constantly make reference to!
Muhammad Yunus is the founder of Microfinance and a pioneer of social business more broadly. Originating from Bangladesh, Yunus’ Grameen Bank opened in 1983 and sought to turn conventional banking on its head. Instead of providing services to the wealthy, the Grameen Bank created a system that made financial services accessible to those experiencing poverty. The bank’s model of microfinance is formulated on ‘mutual trust, accountability, participation and creativity’ (Grameen, 2017), and prides itself on the fact that it removes the barriers traditional financial institutions erect which hinder equal participation.
“In my experience, poor people are the world’s greatest entrepreneurs. Every day, they must innovate in order to survive. They remain poor because they do not have the opportunities to turn their creativity into sustainable income” Yunus
Spanning over 30 years, the extensive work of both Yunus and the Grameen Bank ‘to create economic and social development from below’ saw them jointly awarded the 2006 Nobel Peace Prize. Following its success in Bangladesh and its proven ability to create social change, Microfinance has since become a world-wide phenomenon with similar models being implemented across the globe.
It’s the very impact of Microfinance that we will exploring further this year so stay tuned to learn more about the origins and hopes of Microfinance and the Microfinance landscapes in Cambodia and Fiji, the countries SEED’s Impact Trips operate in.
To hear more about Microfinance from the man himself check out this TED talk! https://www.youtube.com/watch?v=6UCuWxWiMaQ