Course title- Entrepreneurship Management & Small Business ManagementCourse code- BBA-3115

Section-C

Assignment on – Dr. Muhammad Yunus

Submitted to

Serena AktarSenior lecturer in Management

Northern University Bangladesh

Prepared by

Towhidul AlamShahrokh Akanda

Date of submission- 12/12/2011

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Study OnDr. Muhammad Yunus, Grameen Bank and Micro Credit

Historical Trend of Entrepreneurship and Entrepreneurial Factors Professor Muhammad Yunus established the Grameen Bank in Bangladesh in 1983, fueled by the belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves.

From Dr. Yunus' personal loan of small amounts of money to destitute basket weavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through micro lending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide.

Born in 1940 in the seaport city of Chittagong, Professor Yunus studied at Dhaka University in Bangladesh, then received a Fulbright scholarship to study economics at Vanderbilt University. He received his Ph.D. in economics from Vanderbilt in 1969 and the following year became an assistant professor of economics at Middle Tennessee State University. Returning to Bangladesh, Yunus headed the economics department at Chittagong University.

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From 1993 to 1995, Professor Yunus was a member of the International Advisory Group for the Fourth World Conference on Women, a post to which he was appointed by the UN secretary general. He has served on the Global Commission of Women's Health, the Advisory Council for Sustainable Economic Development and the UN Expert Group on Women and Finance.

Professor Yunus is the recipient of numerous international awards for his ideas and endeavors, including the Mohamed Shabdeen Award for Science (1993), Sri Lanka; Humanitarian Award (1993), CARE, USA; World Food Prize (1994), World Food Prize Foundation, USA; lndependence Day Award (1987), Bangladesh's highest award; King Hussein Humanitarian Leadership Award (2000), King Hussien Foundation, Jordan; Volvo Environment Prize (2003), Volvo Environment Prize Foundation, Sweden; Nikkei Asia Prize for Regional Growth (2004), Nihon Keizai Shimbun, Japan; Franklin D. Roosevelt Freedom Award (2006), Roosevelt Institute of The Netherlands; and the Seoul Peace Prize (2006), Seoul Peace Prize Cultural Foundation, Seoul, Korea. He is a member of the board of the United Nations Foundation.

Early age

Yunus was born on 28 June 1940 to a Muslim family in the village of Bathua, by the Boxirhat Road in Hathazari, Chittagong, in Bangladesh. His father was Hazi Dula Mia Shoudagar, a jeweler, and his mother was Sufia Khatun. His early childhood years were spent in the village. In 1944, his family moved to the city of Chittagong, and he was shifted to Lamabazar Primary School from his village school. By 1949, his mother was afflicted with psychological illness. Later, he passed the matriculation examination from Chittagong Collegiate School securing the 16th position among 39,000 students in East Pakistan. During his school years, he was an active Boy Scout, and traveled to West Pakistan and India in 1952 and to Canada in 1955 to attend Jamborees. Later when Yunus was studying at Chittagong College, he became active in cultural activities and won awards for drama acting. In 1957, he enrolled in the department of economics at Dhaka University and completed his BA in 1960 and MA in 1961.

After graduation

Following his graduation, Yunus joined the Bureau of Economics as a research assistant to the economical researches of Professor Nurul Islam and Rehman Sobhan. Later he was appointed as a lecturer in economics in Chittagong College in 1961. During that time he also set up a profitable packaging factory on the side. He was offered a Fulbright scholarship in 1965 to study in the United States. He obtained his PhD in economics from Vanderbilt University in the United States through the graduate program in Economic Development (GPED) in 1971. From 1969 to 1972, Yunus was an assistant professor of economics at Middle Tennessee State University in Murfreesboro, TN.

During the Bangladesh Liberation War in 1971, Yunus founded a citizen's committee and ran the Bangladesh Information Center, with other Bangladeshis living in the United States, to raise support for liberation. He also published the Bangladesh Newsletter from

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his home in Nashville. After the War, Yunus returned to Bangladesh and was appointed to the government's Planning Commission headed by Nurul Islam. He found the job boring and resigned to join Chittagong University as head of the Economics department. He became involved with poverty reduction after observing the famine of 1974, and established a rural economic program as a research project. In 1975, he developed a Nabajug (New Era) Tebhaga Khamar (three share farm) which the government adopted as the Packaged Input Programme. In order to make the project more effective, Yunus and his associates proposed the Gram Sarkar (the village government) programme.Introduced by then president Ziaur Rahman in late 1970s, the Government formed 40,392 village governments (gram sarkar) as a fourth layer of government in 2003. On 2 August 2005, in response to a petition filed by Bangladesh Legal Aids and Services Trust (BLAST) the High Court had declared Gram Sarkar illegal and unconstitutional.

Grameen Bank

In 1976, during visits to the poorest households in the village of Jobra near Chittagong University, Yunus discovered that very small loans could make a disproportionate difference to a poor person. Jobra women who made bamboo furniture had to take out usurious loans for buying bamboo, to pay their profits to the moneylenders. His first loan, consisting of US$27.00 from his own pocket, was made to 42 women in the village, who made a net profit of BDT 0.50 (US$0.02) each on the loan. Accumulated through many loans, this vastly improving Bangladesh's ability to export and import as it did in the past, resulting in a greater form of globalization and economic status.

Dr. Akhtar Hameed Khan, founder of the Pakistan Academy for Rural Development (now Bangladesh Academy for Rural Development), is credited alongside Yunus for pioneering the idea. From his experience at Jobra, Yunus, an admirer of Dr. Hameed, realized that the creation of an institution was needed to lend to those who had nothing. While traditional banks were not interested in making tiny loans at reasonable interest

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Grameen Bank Head Office at Mirpur-2, Dhaka

rates to the poor due to high repayment risks, Yunus believed that given the chance the poor will repay the borrowed money and hence micro credit could be a viable business model.

Yunus finally succeeded in securing a loan from the government Janata Bank to lend it to the poor in Jobra in December 1976. The institution continued to operate by securing loans from other banks for its projects. By 1982, the bank had 28,000 members. On 1 October 1983 the pilot project began operations as a full-fledged bank and was renamed the Grameen Bank (Village Bank) to make loans to poor Bangladeshis. Yunus and his colleagues encountered everything from violent radical leftists to the conservative clergy who told women that they would be denied a Muslim burial if they borrowed money from the Grameen Bank. As of July 2007, Grameen Bank has issued US$ 6.38 billion to 7.4 million borrowers. To ensure repayment, the bank uses a system of "solidarity groups". These small informal groups apply together for loans and its members act as co-guarantors of repayment and support one another's efforts at economic self-advancement.

The Grameen Bank started to diversify in the late 1980s when it started attending to unutilized or underutilized fishing ponds, as well as irrigation pumps like deep tube wells. In 1989, these diversified interests started growing into separate organizations, as the fisheries project became Grameen Motsho (Grameen Fisheries Foundation) and the irrigation project became Grameen Krishi (Grameen Agriculture Foundation). Over time, the Grameen initiative has grown into a multi-faceted group of profitable and non-profit ventures, including major projects like Grameen Trust and Grameen Fund, which runs equity projects like Grameen Software Limited, Grameen CyberNet Limited, and Grameen Knitwear Limited, as well as Grameen Telecom, which has a stake in Grameenphone (GP), biggest private sector phone company in Bangladesh. The Village Phone (Polli Phone) project of GP has brought cell-phone ownership to 260,000 rural poor in over 50,000 villages since the beginning of the project in March 1997.

The success of the Grameen model of micro financing has inspired similar efforts in a hundred countries throughout the developing world and even in industrialized nations, including the United States. Many, but not all, micro credit projects also retain its emphasis on lending specifically to women. More than 94% of Grameen loans have gone to women, who suffer disproportionately from poverty and who are more likely than men to devote their earnings to their families. For his work with the Grameen Bank, Yunus was named an Ashoka: Innovators for the Public Global Academy Member in 2001. In the book, Grameen Social Business Model, Rashidul Bari shows how Grameen Social Business Model(GSBM)- has gone from being theory to become an inspiring practice adopted by leading universities (e.g., Glasgow), entrepreneurs (e.g., Franck Riboud) and corporations (e.g., Danone) across the globe. Through Grameen Bank, Rashidul Bari claims that Yunus demonstrated how Grameen Social Business Model can harness the entrepreneurial spirit to empower poor women and alleviate their poverty. One of the conclusions of Yunus' concepts is that the poor are like a “bonsai tree,” and they can do big things if they get access to the social business that holds the potential to redeem the failed promise of free-market enterprise.

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Muhammad Yunus was awarded the 2006 Nobel Peace Prize, along with Grameen Bank, for their efforts to create economic and social development. In the prize announcement The Norwegian Nobel Committee mentioned. Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty.

Information of Entrepreneur

Name- Professor Muhammad YunusFather- Hazi Dula Mia ShoudagarMother- Sufia KhatunEducation- PhD in Economics, Vanderbilt University, U.S.A. (1970)Birth Place- Bathua,Boxirhat Road, Hathazari, Chittagong.Date of birth- 28 June 1940

Professional Experiences

1962 - 65 Lecturer of Economics, Chittagong College, Bangladesh1969 - 72 Assistant Professor of Economics, MTSU, Tennessee, USA

1972 (July-Sept)Deputy Chief, General Economics Division, Planning Commission, Government of Bangladesh.

1972 - 75Associate Professor of Economics and Head of the Department of Economics, Chittagong University, Bangladesh

1975 - 1989Professor of Economics, Chittagong University and Director, Rural Economics Programme, Chittagong, Bangladesh

1976 - 1983 Project Director, Grameen Bank Project, Bangladesh1983 - today Managing Director, Grameen Bank, Bangladesh1996 (April-June)

Cabinet Minister (Advisor) in the Caretaker Government of Bangladesh

List of Businesses

Dr Muhammad Yunus has many national and international businesses. Most of them founded and operated by him.

1976 - 1983 Founder and Project Director, Grameen Bank Project.1983 - to-date Founder and Managing Director, Grameen Bank, Dhaka.1991 - to-date Founder and Chairman, Grameen Krishi (Agriculture) Foundation, Rangpur.1990 - to-date Founder and Executive Trustee, Grameen Trust, Dhaka.

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1990 - to-dateDesigner and member of Governing Body, Polli Karma Sahayak Foundation (PKSF), Dhaka.

1979 - to-date Member, Board of Directors, Centre for Mass Education for Science, Dhaka.

1994 - to-dateFounder and Chairman, Grameen Fund (a Social Venture Capital Fund), Dhaka.

1994 - to-dateFounder and Chairman, Grameen Motsho (Fisheries)O PasuSampad (Livestock) Foundation, Dhaka.

1994 - to-dateFounder and Chairman, Grameen Uddog, a non-stock, non-profit organization dedicated to promote the interest of the handloom-weavers of Bangladesh.

1995 - to-dateFounder and Chairman, Grameen Telecom, a cellular telephone company to provide nationwide telephone service. It will provide telephone service in the rural areas of Bangladesh primarily through the poor women in rural areas.

1995 - to-date Founder and Chairman, Grameen Shamogree (Products), Dhaka.1995 - to-date Founder and Chairman, Gona Shyastha Grameen Textile Mills Ltd., Dhaka.1996 - to-date Founder and Chairman, Grameen Cybernet, Dhaka.1996 - to-date Founder and Chairman, Grameen Communications, Dhaka.1996 - to-date Founder and Chairman, Grameen Kallyan (well-being), Dhaka.1996 - to-date Founder and Chairman, Grameen Shakti (energy), Dhaka.1996 - to-date Founder and Chairman, Yunus Foundation, Dhaka.

1996 - to-dateMember, Advisory Council of the Bangladesh Legal Aid and Services Trust, Dhaka.

1997 - to-date Founder and Chairman, Grameen Shikkha (Education), Dhaka.1997 - to-date Founder and Chairman, Grameen Knitwear Ltd., Dhaka.1998 - to-date Founder and Chairman, Grameen Capital Management Ltd, Dhaka.1999 - to-date Founder and Chairman, Grameen Software Ltd, Dhaka.2000 - to-date Founder and Chairman, Grameen IT Park Ltd, Dhaka.2002 - to-date Founder and Chairman, Grameen Star Education Ltd, Dhaka.2002 - to-date Founder and Chairman, Grameen Information Highways Ltd, Dhaka.

Success Factors of Dr. Muhammad Yunus

1. Loans to poor people without any financial security: - Dr Muhammad Yunus is the pioneer to provide small size loan to poor people which was the main success factor of Grameen Bank. His micro credit system is now following by many countries.

2. Grameen Bank's positive impact on poor borrowers:- with the help micro credit rural women’s try to help there family and we all know that if a person have some then he can make more. So the some was the problem for rural people.

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3. Micro credit is simple and easy to understand by all. Do not have complicated mechanisms of bank:- village people are illiterate and they do not the complicated process of bank on the other hand Bank do not provide small loan so it was the plus point for the success of Grameen Bank.

4. Muhammad Yunus is a practical visionary who has improvedthe lives of millions of people in his native Bangladesh andelsewhere in the world.

5. The main success factor of Dr Muhammad Yunus was making something different we know an entrepreneur must have the quality to do something innovative and different then usual.

Challenge Factors of Dr. Muhammad Yunus

1. Creating a World Without poverty, hunger, and inequality: - Dr Mohammad Yunus has a vision to alleviate poverty from Bangladesh and he took this as a challenge.

2. To create a sustainable credit system: - Dr Muhammad Yunus was a economic graduate that’s why he try to implement his education in real life situation and he succeed.

3. Help the Poor to lift their families out of poverty: - we know in Bangladesh the villages people are always straggle with their limited income. Dr Muhammad Yunus tried to help them to increase their livelihood by micro credit which was a challenging factor for him.

4. Women empowerment: - we know our country is a man dominated country and women always rely on husband’s income but our village women have a lot of potential. Muhammad Yunus help the women to change their fate and contribute them in national production and savings.

5. To change the economic condition of our country: - our unstable economic system and inequality in social class which increasing the distance between poor and rice. Rice is becoming more ricer and poor

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are becoming poorer. So he took this as a challenge and tried to change it.

Finding and Analysis

In the past thirty years, micro credit has spread to every continent and benefited over 100 million families. As of October, 2011, it has 8.349 million borrowers, 97 percent of whom are women. With 2,565 branches, GB provides services in 81,379 villages, covering more than 97 percent of the total villages in Bangladesh.

The financial information for the beginning year 1998 and last year 2010 to realize where Grameen bank was and where is today. From this information we can understand that Dr Muhammad Yunus is a successful entrepreneur. Financial Statement

Particulars 1998 2010

Authorized Capital 500 3500

Own Fund :

Paid-up Capital 258 548

Capital and Other Reserve 1908 6815Miscellaneous 182 4184

Total : 2348 11547Deposits 5222 105023

Other Sources of Fund 658 7238

Borrowings 10836 1589

Assets :

Loan and Advances (Before Provision) 16210 68418

Investment 1807 47757Cash and Bank Balance 470 1312Fixed Assets 879 1488Other Assets 1706 6422

Total Assets: 21072 125397Own Fund as Percentage of Loan & Advances 14% 17%

Own Fund and Deposits as Percentage of Loan & Advances 47% 170%

Total Income (Before Provision) 3021 17742

Expenses :

Salaries & Other Related Expenses 1072 4639

Interest Expenses 880 9228Other Expenses 219 2165Provision Expenses 746 953

Total Expenses: 2917 16985

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Net Profit 103 757

Provision Balance 2987 5399

Bad Debt 64 1222

Bad Debt Recovery 7 580

Accumulated Disbursement(including housing loan) 108114 594461Number of Employees 12850 22255

Number of Members 2368347 8340623

Number of Centers 66712 144619

Number of Villages 39045 81376

Number of Branches 1137 2565

Here we have tried to show Grameen Banks progress on the basis of profit through graph for last 14 years:-

ConclusionFrom this Assignment we have learned that an entrepreneur must possess creativity and challenging thinking and the practical implementation to convert the thinking into reality. In this study of Dr. Mohammad Yunus we found many factors that an entrepreneur should possess to be a successful entrepreneur. Grameen Bank is a social service business with a non profit goal. His mission and vision to give poor people the power to help themselves, Dr. Yunus has offered them something far more valuable than a plate of food––security in its most fundamental form. We have collected all information of this assignment from secondary data so there may have some difference form the real picture of the entrepreneur. So from this study we can say that the course Entrepreneurship Development and Small Business Enterprise will help to attain the knowledge needed to be an entrepreneur.

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