Muhammad Yunus, a Bangladeshi economist and social entrepreneur, is renowned for his pioneering work in microfinance through the Grameen Bank, an institution he founded in 1983. Yunus's vision was to address the issue of poverty by providing financial services to the poorest segments of society, who were traditionally excluded from the conventional banking system due to lack of collateral and credit history.

The Grameen Bank's core innovation lies in its microcredit model, which offers small loans to impoverished individuals, primarily women, without requiring physical collateral. Instead, the bank relies on the social collateral of borrower groups. These groups, formed by individuals who are often from the same community, provide mutual support and ensure each other's loan repayment. This system not only mitigates the risk for the bank but also fosters a sense of community and accountability among borrowers.

Yunus’s approach challenged traditional banking practices by focusing on trust and social capital rather than financial assets. The Grameen Bank’s model has achieved remarkable success, with high repayment rates and a substantial impact on improving living conditions for millions of people. It empowers borrowers to start or expand small businesses, enhancing their economic opportunities and contributing to poverty alleviation.

The success of the Grameen Bank has had a profound global influence, inspiring numerous microfinance initiatives and demonstrating that innovative financial solutions can drive significant social change. In recognition of his efforts to create a more inclusive and equitable financial system, Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize in 2006. Their work has underscored the potential for economic empowerment to transform lives and has cemented Yunus’s legacy as a leading advocate for social and economic justice.