Muhammad Yunus, who earned a Ph.D. in economics at Vanderbilt in 1971, won the Nobel Peace Prize in 2006 for his work combating poverty through a bank that gives small loans to poor people.
Yunus’ concept of microcredit—small loans to poor villagers in Bangladesh to help them buy livestock or fund an enterprise—has grown from the $27 he loaned out of his own pocket into the Grameen Bank, which has loaned more than $35.8 billion to 10.27 million borrowers since opening in 1976. Despite lack of collateral or signed loan documents, more than 97 percent of the loans have been paid back—a rate unheard of elsewhere in the banking industry. The Grameen Bank provides services in more than 81,678 villages in Bangladesh through 2,568 branches. Grameen was jointly named recipient of the Nobel Peace Prize.
“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,” the Nobel Committee said in awarding the $1.36 million prize. “Microcredit is one such means. Development from below also serves to advance democracy and human rights.”
Yunus first arrived in Nashville in 1965, entering the Vanderbilt graduate program in economic development in the Department of Economics after receiving a one-year Fulbright Fellowship. But he was encouraged to remain at Vanderbilt to earn a doctorate, receiving support from the university and becoming teaching assistant to Nicholas Georgescu-Roegen, then Vanderbilt Distinguished Professor of Economics.
“It was the most fascinating period in American history as far as I was concerned: the civil rights movement, Vietnam, flower children, and the assassinations of Martin Luther King and Bobby Kennedy,” Yunus recalled in a 1997 Vanderbilt Magazine article.
“It changed me, too. I saw that one man could stand up and say, ‘No, you are wrong,’ even with the whole world saying, ‘We are right.’ The whole society could turn around from just one voice.”
Yunus was awarded the U.S. Presidential Medal of Freedom in 2009 and the U.S. Congressional Gold Medal in 2010. He also was named Vanderbilt’s first Distinguished Alumnus in 1996 and received the Nichols-Chancellor’s Medal in 2007.
Learn more about Nobel laureate and Vanderbilt alumnus Muhammad Yunus.