More than 30 years ago, Grameen Bank and its founder, Professor Muhammad Yunus, gave its first loan – $27 – to a group of 42 villagers in Bangladesh, pioneering a new financing model for the poor. Since then the Grameen model has proved enormously successful, lending to more than seven million borrowers, 97% of them women, and inspiring the blossoming of more than 10,000 microfinance institutions worldwide today. In 2006, Professor Yunus and Grameen were duly awarded the Nobel Peace prize for their “efforts to create economic and social development from below”.
Microfinance is helping to transform not only Bangladesh, but also many other countries. The sector’s estimated loan volume of $25bn is attracting considerable interest from international banks and investors as an emerging investment opportunity. The model is working and participation by large banks and capital markets could help to boost systemic co-operation, bring resources and strengthen microfinance’s bottom-up approach.
