Nobel Prize for Nobel Work by Dr. Muhammad Yunus

In the post-implosion analysis of the microfinance sectors in Andhra Pradesh, one entity came out virtually unscathed—the idea that microfinance is basically a force for good. The argument was that microfinance has the potential to alleviate poverty and empower people, and the real problem is with a few unscrupulous or greedy microfinance organisations. The solution therefore was better regulations—such as capping the interest rates and increasing transparency.

Muhammad Yunus, founder of Grameen Bank and winner of the Nobel Prize, for instance, has put the blame squarely on the profit-seeking microfinance companies and their compulsions to grow fast at any cost. In an interview to Microfinance Focus recently, he argued that commercial firms should not use the term microfinance, so that customers know it's different from the ones offered by social enterprises. A few days later, PN Vasudevan, MD of Equitas, a microfinance company, defended for-profit companies saying the problem had nothing to do with the constitution of a company, but with how they behave on ground. The underlying assumption is that microfinance per se is good, but there could be rogue or fair Microfinance Institutions (MFIs).

Below are his 2 famous mind striking adages:

All human beings are born entrepreneurs. Some get a chance to unleash that capacity. Some never got the chance, never knew that he or she has that capacity

If you have that money in your hand, you desperately try to make the best use of it and move ahead.

One can never know the potential present within unless it is channelized. There are fortunate like me who got a chance to study and move ahead in progressive direction. And yes, it was indeed possible with the money shelled out for my education by my parents. Apparently, that is not the true picture across the world. There are many people who still strive for basic needs and it’s only because of money. We ourselves have created strata in our society where we distinguish people in terms of rich and poor. Albeit this is present since medieval ages, there is very little done in this area to improve the things.

 And then there comes a man like Dr. Mohammad Yunus who with his alternate thinking try to eradicate this thinking. Society, where credits are offered only to one who has the potential to return it back, is as good as a land of no opportunity to poor. This kind of economic cycle never allows the upliftment of poverty infact poverty grows its root deeper.

Dr. Yunus through his microcredit model did the noblest job of helping those people who never got an opportunity. He provided wings to the dream of those people who dared to fly high in the sky. Now, again being from so called “sane world”, one would think, is Dr. Yunus having a lot of money? Why is he carrying out such kind of system where there is high chance of debtors turning out to be a defaulter?  

Well, then here is the answer explained in his model. Dr. Yunus considers poor to be the people deprived of an opportunity to transform themselves. They do have the potential but the current system doesn’t allow them to leave that poverty. So he created a credit system where he gave the loans to the poor stating the more your pressing needs the poor you get. In this way, poor’s were encouraged to live their dreams and since they were adopted by the system which made their dream come true there were more probability of the loan getting repaid in timely manner.

All in all, Dr. Mohammad Yunus came up with a new credit system which is viable in terms of credit returns and also noblest in terms of humanitarian efforts.