A list of the 50 leading business pioneers of all time, compiled by the UK’s Financial Times, has named Muhammad Yunus as a pioneer in the business of finance.
Although he did not invent microfinance, Nobel Laureate Muhammad Yunus’ name has become synonymous with it following international recognition of Grameen Bank, which he founded, James Mackintosh writes.
His advocacy for small loans to the poor – and for social business – has spread around the world.
Small loans made in 1976, mostly to women to help them avoid loan sharks, became the basis for Grameen Bank, a microcredit lender which in 2013 made seven million loans totalling $1.6bn, Mackintosh writes.
The Grameen Bank model has been exported to many countries, including the US, and garnered a joint Nobel prize for Yunus and the bank in 2006 – for peace, not economics.
But microfinance has faced criticism, including that interest rates are often usurious and that it misallocates finance while doing little to alleviate poverty, Mackintosh points out.
Grameen Bank came under criticism, with Sheikh Hasina Wajed, Bangladesh’s prime minister, accusing it of “sucking blood from the poor,” according to the article published on ft.com on March 31.
The other five pioneers in the business of finance are the winningest investor in history Warren Buffett, the founder of Bank of America Amadeo Giannini, top fund manager Henry Kravis who famously bought out RJR Nabisco in the biggest Wall Street takeover of the time, legendary banker and architect of the modern financial service industry John Pierpont Morgan and the founder of the most storied and arguably wealthiest banking family of all time Mayer Amschel Rothschild.
