The winner of the Nobel Peace Prize Muhammad Yunus, 65-year-old economist from Bangladesh, plans to use his share of the award money to build an eye hospital for his poverty-stricken country, and create a company to make low-cost, high-nutrition food for the poor citizens.

Muhammad Yunus have been honored for founding the Grameen Bank in Bangladesh to help improve the lives of millions of poor people, especially women.

The bank makes small loans to poor Bangladeshis who don't qualify at conventional banks. The loans go for things like cows to start a dairy or cell phones to start businesses.

No collateral is needed and repayment is on the honor system.

Since its creation in 1983, Grameen has issued small loans worth $5.72 billion. It turned a profit in all but three years. Last year, it earned $15 million.

The Norwegian Nobel Committee cited Yunus and his Grameen bank for their "efforts to create economic and social development from below."

"Loans to poor people without any financial security had appeared to be an impossible idea," Nobel Commitee said in a statement, "From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed microcredit into an ever more important instrument in the struggle against poverty."

Norwegian Nobel Committee has been criticised of its choice of winners. The director of the International Peace Research Institute in Oslo, Stein Toennesson, said he was happy for Muhammad Yunus, but argued that it was unfortunate the prize this year had not gone to the people behind the peace deal in Indonesia's Aceh province, BBC reports.