The concept of providing credit to the poor as a tool of poverty reduction was not unique to Yunus. Dr, Akhtar Hameed Khan, founder of the Pakistan Academy for Rural Development ( now Bangladesh Academy for Rural Development), was credited for pioneeringthe idea.
Akhtar Hameed Khan (15 july, 1914-9 Oct 1999) was a Pakistani development activist and social scientist credited for pioneering microcredit and microfinance initiative, farmers' cooperatives, and rural training programmesin the developing world. He promoted participatory rural development in pakistan and other developng countries, and widely advocated community participation in development. His particular contribution was the establishment of a comprehensive project for rural development, the Comilla Model (1939). It earned him the Ramonmagsaysay Award from the Philipines and an honouraryDoctorate of Law from Michigan state University.
Yunus an admirer of Dr. Hameed, realized that the creation of an instituion was needed to lend those who had nothing. While traditional Banks were not interested in making tiny loans at reasonable interest rates to the poor due to high repayment risks.Yunus believed that given the chance the poor will repay the borrowed money and hence microcredit could be a viable business model.
Yunus finally succeededin securing a loan from the Govrnment Janata Bank to lend it to the poor in Jobra in Dec, 1976. The institution continued to operate by securing loans from other banks for its projects.By 1982, the bank had 28,000 members. 1 Oct , 1983, the pilot project began operations as a full-fledged bank and was renamed the Grameen 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 2007, Grameen Bank 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-guaranters of repayment and support one another's efforts at economic self-advancement.