Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder." As of June, 2011, it has 8.37 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. Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).

A Short History of Grameen Bank
The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, Head of the Rural Economics Program at the University of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. The Grameen Bank Project (Grameen means "rural" or "village" in Bangla language) came into operation with the following objectives: extend banking facilities to poor men and women; eliminate the exploitation of the poor by money lenders; create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh; bring the disadvantaged, mostly the women from the poorest households, within the fold of an organizational format which they can understand and manage by themselves; and reverse the age-old vicious circle of "low income, low saving & low investment", into virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income".

The action research demonstrated its strength in Jobra (a village adjacent to Chittagong University) and some of the neighboring villages during 1976-1979. With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent

bank by government legislation. Today Grameen Bank is owned by the rural poor whom it serves. Borrowers of the Bank own 90% of its shares, while the remaining 10% is owned by the government.

Books Author 1 H. I. Latifee, 2 H. I. Latifee 3 Muhammad Yunus 4 Muhammad Yunus 5 Muhammad Yunus Title Financing Micro – Finance Programs Micro –Credit and Poverty Reduction. Grameen Bank : Experiences & Reflections (Hindi Version) Grameen Bank : Experiences & Reflections (Chinese Version) Some Suggestions on Legal Framework for Creating Microcredit Banks. Halving Poverty By 2015- We Can Actually Make It Happen Publisher Grameen Trust : Dhaka. Grameen Trust : Dhaka. Grameen Trust : Dhaka Grameen Trust : Dhaka Grameen Bank : Dhaka Year 2003 2003 1998 1992 2003

6 Muhammad Yunus

Grameen Bank : Dhaka


Expanding Microcredit Outreach to Reach the 7 Yunus Muhammad Grameen Bank : Dhaka Millennium Development GoalSome Issues for Attention Grameen Bank Revisiting The Wall Street Journal, Financial 8 Grameen Bank : Dhaka Times and Grameen Bank. October 2002. p.77. Abdul Hai Khan, et 9 Introduction to Grameen II Grameen Bank : Dhaka al. Information Technology To 10 Yunus Muhammad Eliminate Global Poverty. Grameen Bank : Dhaka October 2002, p.35 Grameen Trust Experience 11 Latifee, H. I. Grameen Trust : Dhaka 1991 – 2002 Micro Leasing: The Grameen PRPA-Grameen 12 Asif Ud Dowla Bank Experience. 2002. p.23 Trust:Dhaka 13 Syed M. Hashemi, Sustainable Banking with the PRPA-Grameen



2003 2002 2002 2002 2002

and Sidney Ruth Schuler 14 Lisa Young Larance

Poor: Building Social Capital from the Centre:

Trust:Dhaka PRPA-Grameen Trust:Dhaka PRPA-Grameen Trust:Dhaka PRPA-Grameen Trust:Dhaka PRPA-Grameen Trust:Dhaka PRPA-Grameen Trust:Dhaka The University Press Limited:Dhaka A CASHPOR Publication:Malaysia 2002 2002 2002

Imran Matin, Unpacking Joint Liability 15 Grameen and Shakti Credit Contract. Groups 16 Rahman Atiur Early Impact of Grameen. Contribution of Grameen Bank to Gross Domestic Product of 17 Alamgir, Mohiuddin Bangladesh: Preliminary Estimates. Bayes,A; Braun, J. Village Pay Phone and Poverty 18 von and Akhter R Reduction: 19 Bornstein, David. 20 Count, Alex. The Price of a Dream: Voice from the Field:


1999 1996 1997

Give Us Credit: How Muhammad Yunus’s Micro21 Counts Alex, Lending Revolution Is Times Books:USA Empowering Women from Bangladesh to Chicago. Give Us Credit: How Small 22 Counts Alex Loans Today Can Shape Our Research Press:India Tomorrow. Participation as Process Fuglesang, Andreas 23 Process as Growth: (Chinese Grameen Trust:Dhaka and Chandler, Dale. Version). Fuglesang, Andreas 24 Participation as Process: Grameen Trust:Dhaka. and Chandler, Dale. Fuglesang, Andreas Participation as Process-Process 25 Grameen Trust: Dhaka and Chandler, Dale. as Growth: Gibbons, S David 26 Banking on the Rural Poor. Grameen Bank: Dhaka . and Kasim Sukor The Grameen Reader (Chinese 27 Gibbons, S David Grameen Trust: Dhaka Version). The Grameen Reader (English 28 Gibbons, S David. Grameen Trust: Dhaka Version). The Grameen Reader (French 29 Gibbons, S David. Grameen Trust: Dhaka Hindi). The Grameen Reader (French 30 Gibbons, S David. Grameen Trust: Dhaka Version). The Grameen Reader (Spanish 31 Gibbons, S David. Grameen Trust: Dhaka Version).



1993 1994 1993 1994 1994 1994 1994 1994 1994

Hossain, Mahabub 32 and Diaz, Catalina, P. Islam, Nazrul; Chowdhury, Aminul 33 Islam and Ali, Khadem. 34

Reaching the Poor with Effective Microcredit: Evaluation of the Grameen Bank’s Rural Housing Programme.

Grameen Trust:Dhaka


CUS-Dhaka University:Dhaka The University Press Limited:Dhaka The World Bank:Washington,D.C. BIDS & The World Bank:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Dhaka: University Press Limited Grameen Trust:Dhaka University Press Limited:Dhaka University Press Limited:Dhaka Oxford University Press:New Delhi Grameen Bank:Dhaka, The Center for Social Studies:The Netherlands


Fighting Poverty with Khandker, Shahidur Microcredit: Experience in R. Bangladesh. Khandker, Shahidur Grameen Bank: Performance 35 R.; Khalily, Baqui and Sustainability. and Khan, Zahed Khankhar, Shahidur R.; Khalily, 36 Credit Programs for the Poor: Baqui,B. A. and Zahid H. Khan, An Introduction to Grameen 37 H.I. Latifee Trust, Grameen Bank Tools and 38 H.I. Latifee Technique, 39 H.I. Latifee Grameen Trust –An Update, 40 H.I. Latifee Grameen Trust –An Update, 41 H.I. Latifee Grameen Trust –An Update, 42 H.I. Latifee Overcoming Poverty 43 Mizan, Ainon, N. 44 Mueller-Glodde, Ulrike (ed.) In Quest of Empowerment. Poor, But Strong: Demand and Marketing Aspects of Grameen Bank: To Chase A Miracle: The Poor and Their Money The impact of Grameen Bank in Bangladesh. Different Ways to Support the Rural Poor: Grameen Bank (Sebuah Model Bank Untuk Orang Miskin Bangladesh). The Grameen Diary. Cloning Grameen Bank: Women at the Centre:




1997 1998 1998 1999 2001 2000 1994. 1997 1986 1987 2000 1991 1989

45 Rahman, Atiur 46 Ray, Jayanta Kumar 47 Rutherford, Stuart hehabuddin, Rahnum Strefland, Pieter [et 49 al.] 48 50 Suharto, Pandu 51 Thorat, YSP 52 Todd, Helen (ed.) 53 Todd, Helen

Lembaga Pengembangan 1991 Perbankan: Jakarta Grameen Trust:Dhaka IT Publication:UK The University Press 1999 1996 1996

Limited:Dhaka Tomlinson, Wayne Grameen Manual on Cost 54 and Gibbons, David Effective Targeting: S. Grameen Manual on Creating Tomlinson, Wayne and Maintaining Credit 55 and Gibbons, David Discipline-For Savings and S. Credit Programs for the Poor. Grameen Manual on Key Issues Tomlinson, Wayne of Financial Management-For 56 and Gibbons, David Savings and Credit Programs S. for the Poor. Grameen Manual on Planning, Tomlinson, Wayne Monitoring & Evaluation–For 57 and Gibbons, David Savings and Credit Programs S. for the Poor. Grameen Manual on ScalingTomlinson, Wayne Up Outreach to Branch 58 and Gibbons, David Viability-For Savings and S. Credit Programs for the Poor. The Grameen Bank: Poverty 59 Wahid, abu N M. Relief in Bangladesh. 60 Watanabe, Tatuya. The Ponds and the Poor: Wood , Geoffrey, D. 61 Who Needs Credit? []. Yunus, Muhammad Banker to the Poor (Chinese 62 and Jolis, Alan. Version). Yunus, Muhammad Banker to the Poor (Dutch 63 and Jolis, Alan. Version) Yunus, Muhammad Banker to the Poor (English 64 and Jolis, Alan. Version-South Asian Edition) Yunus, Muhammad Banker to the Poor (English 65 and Jolis, Alan. Version-U.K. Edition) Yunus, Muhammad Banker to the Poor (English 66 and Jolis, Alan. Version-USA Edition) Yunus, Muhammad Banker to the Poor (French 67 and Jolis, Alan. Version) Yunus, Muhammad Banker to the Poor (German 68 and Jolis, Alan. Version) Yunus, Muhammad Banker to the Poor (Gujarati 69 and Jolis, Alan. Version) Yunus, Muhammad Banker to the Poor (Italian 70 and Jolis, Alan. Version) Yunus, Muhammad Banker to the Poor (Japanese 71 and Jolis, Alan. Version) Grameen Trust:Dhaka 1994

Grameen Trust:Dhaka


Grameen Trust:Dhaka


Grameen Trust:Dhaka


Grameen Trust:Dhaka


Westview Press:USA


Grameen Bank:Dhaka 1993 The University Press 1997 Ltd:Dhaka Guizhou People’s 2000 Publishing House:Chaina Element Uitgevers he University Press Limited:Dhaka Aurum Press Limited:U .K. Public Affairs:USA Editions Jean Claude Lattes:Frence Lubbe Verlag:Germany Uttam Sahitya Prakashan:India Feltrinelli:Italy Hayakawa Publishing, Inc.:Japan 1999 1998 1999 1999 1997 1998 2000 1998 1998

Yunus, Muhammad and Jolis, Alan. Yunus, Muhammad 73 and Jolis, Alan. Yunus, Muhammad 74 and Jolis, Alan. 75 Yunus, Muhammad. 72 76 Yunus, Muhammad. 77 Yunus, Muhammad. 78 Yunus, Muhammad. 79 Yunus, Muhammad. 80 Yunus, Muhammad.

Banker to the Poor (Portuguese Version) Banker to the Poor (Spanish Version) Banker to the Poor (Turkish Version): Grameen Bank As I See It. Grameen Bank: Experience and Reflection (Chinese Version) Grameen Bank: Experience and Reflection (English Version) Grameen Bank: Experience and Reflection (Hindi Version) Grameen Bank: Experience and Reflection (Spanish Version) Grameen Bank: Experience and Reflection (Vietnamese Version) Jorimon and Others: Faces at Poverty.

Atica:Portugal Andres Bello Publishers:Argentina Dogran Kitapcilik AS: Turkey Grameen Bank:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka Grameen Trust:Dhaka

2000 1998 1999 1994


81 Yunus, Muhammad.

Grameen Bank:Dhaka


Grameen Bank began with a $27 loan
Grameen Bank began with a $27 loan The Guardian on February 16 2008 on p33 His pioneering Grameen Bank began with a $27 loan and went on to lift millions out of poverty. Nobel prize-winner Muhammad Yunus talks to Madeleine Bunting. The figures tell their own extraordinary story. In 1974, an economics lecturer at the University of Chittagong, Bangladesh, lent $27 to a group of impoverished villagers. He went on to set up Grameen Bank to ensure that the poor had access to loans, and over the next 34 years, it disbursed $6.6bn (£3.6bn) in millions of tiny loans to those living in poverty. Last year, there were 7.4 million borrowers, 98% of whom were women. Most of the lending is for income-generating activities - small street vending, farming. In 1984, Grameen began giving small loans to build and repair homes; a total of 649,714 have now been built. The bank offers student loans - 20,000 last year for higher education - and provides 50,000 scholarships for schooling. There are few people in the world who can claim to have had an impact on this scale: Muhammad Yunus has become one of those rare beings, an idealist whose work has transformed the lives of millions of poor people. Yunus's bank has been copied across the world and microcredit, small loans to the very poor, is now a mainstream strand in dealing with poverty in almost every country including the UK.

Given such an achievement, the only surprise when he and Grameen Bank won the Nobel Prize in 2006 was why it had taken the Norwegians so long to clock one of the most striking successes in development in recent decades. But Yunus, 67, is a restless man, and rather than retire to travel the world graciously accepting the prizes and awards now being showered on him, he has a new idea that he hopes will be as successful as microfinance: social business. His idea is that multinationals set aside funds to run not-for-profit businesses; and social investment funds and "social stockmarkets" trade their stock. The problem with capitalism, he argues, is a rigid distinction between companies pursuing profit and charities pursuing good. What he proposes is a form of triangulation: the innovative, risk-taking approach of business combined with the social objectives of a charity. The idea is not original - there are many people talking about social enterprise models - but Yunus's clout raises the game. First, because he insists all profit must be recycled, no fudges with "double bottom lines" where people try to make money while doing good, and second, because he can take this message into places no one else can. Even the tough business executive weary of pleas for money can't but be impressed by what Yunus has achieved. He sells his message with a calm practicality with as much understanding of the lives of poor people as of the structures of capitalism. It's a combination of idealism and pragmatism that could be picked up by politicians eager to trim the welfare state as much as businessmen keen to improve their image. And why not, says Yunus, who argues that any service could be delivered by social business, including health or education. If social business sounds a bit vague, his new book, Creating a World Without Poverty: Social Business and the Future of Capitalism, is designed to make it look very straightforward. It's designed for the airport bestseller market, but with an important twist this is for those troubled by twinges of conscience on the long-haul flight. Yunus has spotted his target market: the growing sense of discomfort among even dedicated capitalists at running an economic system that consigns a large proportion of the population to grinding poverty. He points to Warren Buffet's move in 2006 in giving $31bn in shares to the Gates Foundation. "He could have set up a social business to fund health insurance for the 47 million in the US without it - and there are lots like him," says Yunus. "There are lots of people who want to hear what I have to say, particularly young career executives; it's in their hearts, but they haven't had the opportunity to put it into practice." Yunus is already involved in negotiations to set up social businesses with several multinationals, including the water firm Veolia, and an unnamed IT business, which he says will transform the lives of poor Bangladeshis. The prototype of his social business model is his venture with the European food multinational Danone. Grameen-Danone may be an unlikely coupling, but Yunus is eulogistic about how the two have collaborated to produce a cheap nutritional yoghurt that is to be sold by a network of low-income women in Bangladesh. It meets the social objective of improving the diet, particularly of poor children, and providing a livelihood for women, but it also meets Danone's objectives to extend its brand in developing countries and maintain its reputation for social responsibility. A win-win, then? Yunus is emphatic it is, but one cannot but feel a little uneasy that the type of story that has ended up in Yunus's book is what corporate PR teams dream of: he opens with several pages on Danone's chief, Frank Riboud. Are you being used? "Wasn't I using Danone? They get no

profit. I was using that story to explain social business. It is an equal trade," says Yunus. He may be right, as he has proved before. Others may have tried micro-credit, but it was Yunus who managed to develop it to its current scale in Bangladesh, and Yunus who, by listening carefully to the impoverished villagers, ensured that women would be its main beneficiaries. He identified the fact women use family resources for the wellbeing of their children more effectively than men. When I ask him which aspect of his success he is most proud of, he cites the fact that 67% of Grameen Bank deposits belong to women. These financial resources give them an unprecedented measure of independence. One criticism is that microfinance helps those just above and below the poverty line, not the very poor. But it's something Grameen Bank is trying to tackle; it now has 100,000 beggars on a "struggling members" lending scheme. There is more to the bank than just the balance sheet; it ties lending to a process of social engineering. New borrowers sign up in peer groups to "the 16 Grameen decisions", a range of pledges on everything from vegetable growing to no dowries. It earns the bank criticism for being paternalistic, but others argue that it gets crucial issues onto the agenda in remote rural areas; even if dowries are reduced by only 10%, that is a start on a pernicious tradition. Grameen is one of the most famous brands in Bangladesh; there are 27 Grameen companies ranging from the country's biggest phone firm to one supplying affordable healthcare. All aim to alleviate poverty and, in time, the plan is to convert them into social businesses. Among all this innovation, Yunus's step has faltered only once. A year ago he announced he was going into politics to deal with Bangladeshi corruption, only to withdraw two months later, horrified by what he describes as "dirty, violent and greedy" politics. The bruising experience has reinforced his lack of faith in the state and the political process to meet the needs of the poor; instead he emphasises the entrepreneurial skills of the poor. This kind of thinking finds an enthusiastic audience, particularly in the US, as it appears to offer a capitalist answer to development without asking for increased aid. Yunus insists there is still a need for aid. Once, Yunus spent his time in the mud huts of the villages around Chittagong, now he lives in a flat in Dhaka with his second wife and children and spends time visiting corporate HQs, gatherings such as the World Economic Forum in Davos and presidential palaces. For a boy from a large family of modest means, its been a long journey but there's a common thread. Yunus has great faith in human nature - both its ingenuity given the opportunity, and its desire to do good, given the opportunity. He's made it his business to work out how to provide those opportunities. Source:

Why I support Muhammed Yunus

Feb 13 2011 By Nick Stace

Nobel Peace Prize winner Professor Muhammed Yunus is being investigated for alleged corruption by Bangladesh's government. Nick Stace defends the man who has helped millions of the world's poorest people. A year ago, I along with other social enterprise leaders from around the world visited Nobel laureate Professor Yunus at his Grameen headquarters in Dhaka, Bangladesh. I'm lucky that through my work I get to meet some interesting people in life, but I have met few people who can match the Yunus magic - his charisma and vision has transformed the lives of some of the world's poorest and most vulnerable people. But ever since Professor Yunus received the Nobel Prize in 2006 for his amazing work on micro credit, and his stand against corruption in politics in 2007, he has been distrusted by the Bangladeshi government. This has now taken a sinister turn with Sheikh Hasina, the Bangladeshi prime minister, giving credence to unsubstantiated claims of corruption at Grameen. According to supporters of Yunus, this is a clumsy attempt to wrestle the world's leading social enterprise away from the poor. Yunus set up the Grameen Bank, which today is giving opportunities through small loans to 10 million of the world's poorest families in 73,000 villages, in 1983. But it didn't stop there. Through social business partnerships with global brands such as Adidas and Danone, Yunus is tackling underlying causes of poverty. These sustainable social businesses now employ over 30,000 people and deliver benefits to many millions of people. At our first meeting in Dhaka, Professor Yunus used a vivid analogy to explain the problem that the poor face: "To me poor people are like Bonsai trees. When you plant the best seed of the tallest tree in a flower pot you get a replica of the tallest tree only inches tall. There is nothing wrong with the seed you planted - only the soil base is too inadequate. Poor people are Bonsai people. There is nothing wrong with their seeds, only society didn't give them the base to grow on." "Real" banks have never wanted to loan to the poor, only loan sharks do with business models that extract bone-crushing interest rates attached to violence and intimidation. Grameen in contrast provides loans at reasonable rates, in a supportive environment. It's inspiring stuff because it puts people at the heart of business solutions, and without political interference it will continue for the benefit of generations to come. There is no question that Professor Yunus is challenging to the world as we see it; he turns on its head conventional thinking, which of itself can allow the seeds of doubt and suspicion to fester in an insecure regime.

It is of course a familiar story that people who suffer the most often live in parts of the world that experience higher than average levels of corruption. Transparency International confirmed in a recent report that Bangladesh is still extremely high on the world corruption league table. And as The Economist noted in 2007, "The problem is that the mafia in Bangladesh are the political parties." For that reason Professor Yunus embarked on a mission to clean up politics, a move The Economist says earned him "powerful enemies among Bangladesh's politicians". Yunus began forming a political party, then quickly dropped the plan - but that was enough to put the current prime minister on guard. The recent attacks on Yunus are over corruption allegations that were proven unfounded some years ago. In 1996 the Norwegian Development Agency thought the movement of $100 million in aid money from one Grameen entity to another was a violation of a clause in its aid contract. Grameen agreed to move the funds back and the matter was settled amicably. The Norwegian Finance Minister Erik Solheim declared that "according to the report, there is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds". It is understandable why Yunus supporters see the attacks on him as politically motivated and fear that the government will not give up trying to ruin his reputation. According to Nicholas Kristof of The New York Times, "It may be that the government worries that Yunus will enter politics, or criticise politicians - and they may also be salivating at the prospect of gaining control over Grameen, which touches one person in three in Bangladesh." Whatever the reasons for the attack on Yunus - jealousy, personal gain, fear or loathing - if he goes under and the bank comes under government control, the big losers will be the poor of Bangladesh, as well as the micro credit movement around the world. It would be a tragedy of epic proportions affecting millions of the most vulnerable people globally. That's why I feel so passionate about standing up for Professor Yunus and why I've joined Liam Black, co-founder of Wavelength (a partner of Grameen) and Danone in supporting the birth of a new organisation called Friends of Grameen. Friends of Grameen has already attracted a unique coalition of social enterprise leaders, big corporations and political leaders from around the world. It will be chaired by Mary Robinson, the former president of Ireland and I believe it can help build an unstoppable momentum in support of the global icon of the poor. Through Friends of Grameen we are putting pressure on every political leader from around the world who has basked in the Yunus glory, to now defend him in his hour of need. David Cameron met the Bangladeshi prime minister two weeks ago and through his advisors we encouraged him to raise widespread concerns about the way Yunus is being treated. In Australia the support of Kevin Rudd, the foreign affairs minister, is being sought. And Hilary Clinton, US secretary of state, has already declared her support. There are few people in the history of the world that can have done more than Mohammed Yunus to alleviate poverty and to bring about lasting change to the world's poorest. It's taken a lifetime to create such a legacy and it could take just a few months to destroy it. That's why I and others who have met Yunus feel we have a duty to do all we can, or witness a beacon of hope in a country where people yearn to get on, snuffed out by cynical political interference.


16 Ecisions

1.0 We shall follow and advance the four principles of Grameen Bank --- Discipline,
Unity, Courage and Hard work – in all walks of out lives.

2.0 Prosperity we shall bring to our families.

3.0 We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.

4.0 We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.

5.0 During the plantation seasons, we shall plant as many seedlings as possible.

6.0 We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.

7.0 We shall educate our children and ensure that they can earn to pay for their education.

8.0 We shall always keep our children and the environment clean.

9.0 We shall build and use pit-latrines.

10.0 We shall drink water from tubewells. If it is not available, we shall boil water or use alum.

11.0 We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughters wedding. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.

12.0 We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.

13.0 We shall collectively undertake bigger investments for higher incomes.

14.0 We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.

15.0 If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline.

16.0 We shall take part in all social activities collectively.

10 Indicators
Muhammad Yunus Every year GB staff evaluate their work and check whether the socio-economic situation of GB members is improving. GB evaluates poverty level of the borrowers using ten indicators. A member is considered to have moved out of poverty if her family fulfills the following criteria: 1. The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor. 2. Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters. 3. All children in the family over six years of age are all going to school or finished primary school. 4. Minimum weekly loan installment of the borrower is Tk. 200 or more. 5. Family uses sanitary latrine. 6. Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes. 7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money.

8. The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts. 9. Family experiences no difficulty in having three square meals a day throughout the year, i. e. no member of the family goes hungry any time of the year. 10. Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare.

Credit Delivery System
Grameen Bank Credit Delivary means taking credit to the very poor in their villages by means of the essential elements of the Grameen credit delivery system. Grameen Bank credit delivery system has the following features: 1 There is an exclusive focus on the poorest of the poor. Exclusivity is ensured by: i) establishing clearly the eligibility criteria for selection of targeted clientele and adopting practical measures to screen out those who do not meet them ii) in delivering credit, priority has been increasingly assigned to women iii) the delivery system is geared to meet the diverse socio-economic development needs of the poor 2 Borrowers are organized into small homogeneous groups. Such characteristics facilitate group solidarity as well as participatory interaction. Organizing the primary groups of five members and federating them into centres has been the foundation of Grameen Bank's system. The emphasis from the very outset is to organisationally strengthen the Grameen clientele, so that they can acquire the capacity for planning and implementing micro level development decisions. The Centres are functionally linked to the Grameen Bank, whose field workers have to attend Centre meetings every week. 3 Special loan conditionalities which are particularly suitable for the poor. These include: i) very small loans given without any collateral ii) loans repayable in weekly instalments spread over a year iii) eligibility for a subsequent loan depends upon repayment of first loan iv) individual, self chosen, quick income generating activities which employ the skills that borrowers already posses v) close supervision of credit by the group as well as the bank staff vi) stress on credit discipline and collective borrower responsibility or peer pressure vii) special safegaurds through compulsory and voluntary savings to minimise the risks

that the poor confront viii) transparency in all bank transactions most of which take place at centre meetings. 4 Simultaneous undertaking of a social development agenda addressing basic needs of the clientele. This is reflected in the "sixteen decisions" adopted by Grameen borrowers. This helps to: i) raise the social and political consciousness of the newly organized groups ii) focus increasingly on women from the poorest households, whose urge for survival has a far greater bearing on the development of the family iii) encourage their monitoring of social and physical infrastructure projects - housing, sanitation, drinking water, education, family planning, etc. 5 Design and development of organization and management systems capable of delivering programme resources to targeted clientele. The system has evolved gradually through a structured learning process, that involves trials, errors and continuous adjustments. A major requirement to operationalize the system is the special training needed for development of a highly motivated staff, so that the decision making and operational authority is gradually decentralized and administrative functions are delegated at the zonal levels downwards. 6 Expansion of loan portfolio to meet diverse development needs of the poor. As the general credit programme gathers momentum and the borrowers become familiar with credit discipline, other loan programmes are introduced to meet growing social and economic development needs of the clientele. Besides housing, such programmes include: i) credit for building sanitary laterines ii) credit for installation of tubewells that supply drinking water and irrigation for kitchen gardens iii) credit for seasonal cultivation to buy agricultural inputs iv) loan for leasing equipment / machinery, ie., cell phones purchased by Grameen Bank members v) finance projects undertaken by the entire family of a seasoned borrower. The underlying premise of Grameen is that, in order to emerge from poverty and remove themselves from the clutches of usurers and middlemen, landless peasants need access to credit, without which they cannot be expected to launch their own enterprises, however small these may be. In defiance of the traditional rural banking postulate whereby "no collateral (in this case, land) means no credit", the Grameen Bank experiment set out to prove successfully - that lending to the poor is not an impossible proposition; on the contrary, it gives landless peasants the opportunity to purchase their own tools, equipment, or other necessary means of production and embark on income-generating ventures which will allow them escape from the vicious cycle of "low income, low savings, low investment, low income". In other words, the banker's confidence rests upon the will and capacity of the borrowers to succeed in their undertakings. The mode of operation of Grameen Bank is as follows. A bank branch is set up with a branch manager and a number of center managers and covers an area of about 15 to 22 villages. The manager and the workers start by visiting villages to familiarise themeselves with the local milieu in which they will be operating and identify the prospective clientele, as well as explain the purpose, the functions, and the mode of operation of the bank to the local

population. Groups of five prospective borrowers are formed; in the first stage, only two of them are eligible for, and receive, a loan. The group is observed for a month to see if the members are conforming to the rules of the bank. Only if the first two borrowers begin to repay the principal plus interest over a period of six weeks, do the other members of the group become eligible themselves for a loan. Because of these restrictions, there is substantial group pressure to keep individual records clear. In this sense, the collective responsibility of the group serves as the collateral on the loan. Loans are small, but sufficient to finance the micro-enterprises undertaken by borrowers: rice-husking, machine repairing, purchase of rickshaws, buying of milk cows, goats, cloth, pottery etc. The interest rate on all loans is 16 percent. The repayment rate on loans is currently - 95 per cent - due to group pressure and self-interest, as well as the motivation of borrowers. Although mobilization of savings is also being pursued alongside the lending activities of the Grameen Bank, most of the latter's loanable funds are increasingly obtained on commercial terms from the central bank, other financial institutions, the money market, and from bilateral and multilateral aid organizations Breaking the vicious cycle of proverty through microcredit The Grameen Bank is based on the voluntary formation of small groups of five people to provide mutual, morally binding group guarantees in lieu of the collateral required by conventional banks. At first only two members of a group are allowed to apply for a loan. Depending on their performance in repayment the next two borrowers can then apply and, subsequently, the fifth member as well. The assumption is that if individual borrowers are given access to credit, they will be able to identify and engage in viable income-generating activities - simple processing such as paddy husking, lime-making, manufacturing such as pottery, weaving, and garment sewing, storage and marketing and transport services. Women were initially given equal access to the schemes, and proved not only reliable borrowers but astute enterpreneurs. As a result, they have raised their status, lessened their dependency on their husbands and improved their homes and the nutritional standards of their children. Today over 90 percent of borrowers are women. Intensive discipline, supervision, and servicing characterize the operations of the Grameen Bank, which are carried out by "Bicycle bankers" in branch units with considerable delegated authority. The rigorous selection of borrowers and their projects by these bank workers, the powerful peer pressure exerted on these individuals by the groups, and the repayment scheme based on 50 weekly installments, contribute to operational viability to the rural banking system designed for the poor. Savings have also been encouraged. Under the scheme, there is provision for 5 percent of loans to be credited to a group find and Tk 5 is credited every week to the fund. The success of this approach shows that a number of objections to lending to the poor can be overcome if careful supervision and management are provided. For example, it had earlier been thought that the poor would not be able to find renumerative occupations. In fact, Grameen borrowers have successfully done so. It was thought that the poor would not be able to repay; in fact, repayment rates reached 97 percent. It was thought that poor rural women in

particular were not bankable; in fact, they accounted for 94 percent of borrowers in early 1992. It was also thought that the poor cannot save; in fact, group savings have proven as successful as group lending. It was thought that rural power structures would make sure that such a bank failed; but the Grameen Bank has been able to expand rapidly. Indeed, from fewer than 15,000 borrowers in 1980, the membership had grown to nearly 100,000 by mid1984. By the end of 1998, the number of branches in operation was 1128, with 2.34 million members (2.24 million of them women) in 38,957 villages. There are 66,581 centres of groups, of which 33,126 are women. Group savings have reached 7,853 million taka (approximately USD 162 million), out of which 7300 million taka (approximately USD 152 million) are saved by women. It is estimated that the average household income of Grameen Bank members is about 50 percent higher than the target group in the control village, and 25 percent higher than the target group non-members in Grameen Bank villages. The landless have benefited most, followed by marginal landowners. This has resulted in a sharp reduction in the number of Grameen Bank members living below the poverty line, 20 percent compared to 56 percent for comparable non-Grameen Bank members. There has also been a shift from agricultural wage labour (considered to be socially inferior) to self-employment in petty trading. Such a shift in occupational patterns has an indirect positive effect on the employment and wages of other agricultural waged labourers. What started as an innovative local initiative, "a small bubble of hope", has thus grown to the point where it has made an impact on poverty alleviation at the national level ".

Method of Action
The Grameen Bank's Method of action can be illustrated by the following principles: 1. Start with the problem rather than the solution: a credit system must be based on a survey of the social background rather than on a pre-established banking technique. 2. Adopt a progressive attitude: development is a long-term process which depends on the aspirations and committment of the economic operators. 3. Make sure that the credit system serves the poor, and not vice-versa: credit officers visit the villages, enabling them to get to know the borrowers. 4. Establish priorities for action vis-a-vis to the the target population: serve the most poverty-stricken people needing investment resources, who have no access to credit. 5. At the begining, restrict credit to income-generating production operations, freely selected by the borrower. Make it possible for the borrower to be able to repay the loan. 6. Lean on solidarity groups: small informal groups consisting of co-opted members coming from the same background and trusting each other. 7. Associate savings with credit without it being necessarily a prerequisite. 8. Combine close monitoring of borrowers with procedures which are simple and standardised as possible. 9. Do everything possible to ensure the system's financial balance. 10. Invest in human resources: training leaders will provide them with real development ethics based on rigour, creativity, understanding and respect for the rural environment.

2011-06 Issue 378 BDT
Statement No: 1 Issue No : 378, Issue Date : July 11, 2011 Grameen Bank Monthly Update in Taka : June, 2011 Sl. No. 1.0 2.0 3.0 4.0 5.0 Particulars Million Taka 649,117.41 577,425.81 9,339.59 9,068.39

Cumulative Amount Disbursed Since Inception Cumulative Amount Repaid Since Inception Amount Disbursed this Month Amount Repaid this Month Outstanding Loan 5.1 Basic Loan 65,000.94 (a) 5.2 Flexible Loan 4,224.92 5.3 Housing Loan 92.55 5.4 Education Loan 2,196.82 5.5 Other Loans 176.37 5.6 Total : 71,691.60 (b) Rate of Recovery 6.0 96.89 (c) 7.0 Total Outstanding of Borrowers Missing 5 to 9 Consecutive Instalments 7.1 Basic Loan 824.19 7.2 Flexible Loan 885.01 7.3 Total : 1709.19 (d) Overdue Loan 8.0 8.1 Basic Loan (e) 481.36 8.2 Flexible Loan 270.51 8.3 Housing Loan 1.60 8.4 Other Loans 0.01 8.5 Total : 753.48 9.0 Microenterprise Loan (Cumulative) 9.1 No. of Microenterprise Loans 3,336,065 9.2 Amount Disbursed 96,442.20 9.3 Amount Repaid 78,296.26 10.0 Balance of Deposits 10.1 Members' Deposit 58,172.43 10.2 Non-Members' Deposit 45,461.74 10.3 Total : 103,634.18 11.0 Deposits to Outstanding


13.0 14.0 15.0





11.1 Deposits as Percentage of Outstanding Loans 11.2 Deposits and Own Resources as Percentage of Outstanding Loans 11.3 No. of Branches with more in Deposits than in Outstanding Loans Beggar Members 12.1 No. of Beggar Members 12.2 Amount Disbursed (Cumulative) 12.3 Amount Repaid (Cumulative) 12.4 Amount of Savings (Balance) Cumulative Number of Village Phones Cumulative Number of Houses Built with Housing Loans Life Insurance Fund (Cumulative) 15.1 No. of Deaths Among all Borrowers 15.2 Amount paid out from Life Insurance Fund Loan Insurance 16.1 Balance in Loan Insurance Savings 16.2 No. of Deaths Among Insured Borrowers (Cumulative) 16.3 Amount of Outstanding Principal and Interest of the Deceased Borrowers paid out from Insurance Fund (Cumulative) Higher Education Loan (Cumulative) 17.1 No. of Female Students 17.2 No. of Male Students 17.3 Total : 17.4 Amount Disbursed (Female) 17.5 Amount Disbursed (Male) 17.6 Total : Scholarship (Cumulative) 18.1 Scholarship Recipient (Female) 18.2 Scholarship Recipient (Male) 18.3 Total : 18.4 Scholarship Amount (Female) 18.5 Scholarship Amount (Male) 18.6 Total : Number of Members(f) 19.1 Female 19.2 Male 19.3 Total : Number of Groups Number of Centres Number of Villages Number of Branches

145 159 1,685 88,804 160.15 127.85 8.19 404,873 689,623 135,531 237.64 6,864.92 206,409 1,868.46

11,161 37,839 49,000 590.83 1,727.67 2,318.51 77,331 55,358 132,689 112.26 82.15 194.41

20.0 21.0 22.0 23.0

8,057,039 317,871 8,374,910 1,297,807 144,139 81,379 2,565


Number of Branches with Computerized Accounting and MIS


(a) On the last day of each month, 50 per cent provision is made against the outstanding amounts of flexible loans with age of less than two years, and 100 per cent provision is made against the outstanding amounts of flexible loans with age of two years and more. The portions of flexible loans which complete the third year are written off exactly on the date following their completion. (b) Amount repaid as a percentage of amount due. (c) If a borrower misses ten consecutive instalments, the entire outstanding loan is treated as an overdue loan. (d) On the last day of each month, 100 per cent provision is made against all overdue loans. Entire outstanding amount of overdue loans are written off one year after they became overdue. (e) In case of one-year loan, if the borrower fails to repay half the loan amount, with interest, within 26 weeks, entire unrepaid amount becomes overdue. In case of loans with longer duration, if the borrower fails to repay the total principal amount and interest scheduled to be repaid within each segment of 26 weeks, entire unrepaid amount falls overdue. (f) Number of members includes both Beggar Members and Higher Education Loan recipients mentioned in item no. 12.1 & 17.3 respectively. Note : Current Exchange Rate : 1 US$ = Taka 73.19

Grameen Bank

Grameen Bank has reversed the conventional banking wisdom by removing collateral requirement and created a banking system which is based on mutual trust, strict supervision, accountability, participation and creativity. At GB, credit is the entry point and it serves as a catalyst in the overall development process. GB sees credit as an empowering agent, an enabling element in the development of socio-economic conditions of the poor who have been kept outside the banking orbit on the simple ground that they are poor and hence not bankable.

Professor Muhammad Yunus, the founder of Grameen Bank and its Managing Director reasoned that if financial resources can be made available to the poor people at terms and conditions which are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder". This conviction of Professor Yunus had its root in the traditional bank's structure which has been designed in a way that would never help the poor who constitute the largest segment of the society and the ones who are desperately in need of credit.

The origin of Grameen Bank

The origin of Grameen Bank can be traced back about 20 years from now when Dr. Muhammad Yannus, Professor and Head of the Rural Economics Programme in the University of Chittagong, launched an action research programme to examine the possibilities of designing a comprehensive banking framework to provide the banking services to the rural poor. The action research project which he called the "Grameen Bank Project" (Grameen means rural) came into being with the following objectives in mind: - To extend the banking facilities to the poor men and women. - To eliminate the exploitation of the money lenders. - To create opportunities for self employment for the vast unutilized and under utilized manpower resources. - To bring the disadvantaged people within the framework of some organizational format which they can understand and operate and can find socio-political and economic strength through mutual support. - To reverse the age-old vicious circle of "low income, low savings, low investment "into an expanding system of" low income, credit, investment, more income, more credit, more investment, more income".

The project demonstrated its strength in the village Jobra (a village adjacent to the – Chittagong University - the initial site of the action research project) and some of the neighbouring villages during 1976-1979. From there, with the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital of Bangladesh). With the success in Tangail the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by a Government Ordinance with the name Grameen Bank. The Government provides 10% share capital of the Bank while 90% is held by the borrowers of the Bank. The founder of the Bank views credit as a powerful weapon He asserts that credit is a fundamental human right. The more credit one can receive, the more resources he can command, the more powerful he is. Credit creates entitlement to resources and is the basis for the economic emancipation of the poor in general and the poor women in particular. The collateral based conventional format denies the right to credit for the poor people which in turn dispossess them in their fight against the economic and other related odds around them. The Grameen approach emphasizes the creation of enabling conditions in which every human being may have the opportunity to carve out dignified ways of living for herself/himself. GB views its loans as means to gain command over resources. With its effective use a poor person converts her/his latent skills in generating an income and creates self-employment without having to be constrained by the limitations of wage employment. Besides, self-chosen economic activities increase the sense of participation and strengthens the base of self-help. Professor Yunus puts it as "creating favourable conditions for making a living through self-employment is a much more dignified way of solving the unemployment than initiating a system of doles and welfare payments".

Grameen Bank in recent years has not only expanded its credit operations which are targeted at the poorest of the poor in rural Bangladesh, it has also rapidly diversified its activities. Grameen today is the focal point of a global network of institutions and individuals who provide micro-credit to fight poverty. Within Bangladesh, the Bank has undertaken major investment initiatives in those sectors where the poor have the comparative advantage in terms of their skills, enterprise and productive capacity. A number of social development oriented companies have been established under the Companies' Law to boost economic growth of vital economic sectors like agriculture, fisheries and rural industries.

Grameen Bank Identity

Grameen Bank has now become a national institution that provides credit to the rural poor in Bangladesh. It is today also owned by the poor, whose paid

up share capital amount to Taka 200 million. Credit provided by Grameen in 1994 exceeded the total amount of all other financial institutions and NGOs put together in Bangladesh. Grameen is committed to the goal of alleviation of poverty and empowerment of the rural poor. To fulfill its strategic objective, Grameen has grown institutionally, its credit operations have expanded rapidly and its programmes have become more diversified. Grameen Bank has a large clientele, comprising over two million of the poorest households in the country. The immediate task is to ensure that they succeed in finally overcoming their poverty and attain further development in a sustainable way. Grameen's modus operandi has clearly demonstrated that poverty can be alleviated within a short time and new opportunities created for self employment, higher incomes, improved housing, better health & nutrition, children's schooling, and altogether a better quality of life. A substantial number of Grameen's clientele, according to some evaluations, have already succeeded in overcoming absolute poverty. It is Grameen's firm conviction that a majority of its borrowers will cross the poverty line in the next five years.

Grameen Bank
From Wikipedia, the free encyclopedia Grameen Bank (GB)

Type Industry Founded Headquarters Area served Key people Products

Body Corporate (Bank Ordinance) Finance 1983 Dhaka, Bangladesh Bangladesh Muhammad Yunus, founder Financial Services Microfinance

Revenue Operating income Net income Total assets Employees Website

6,335,566,324 Taka (92.3 million USD) (2006)[1] 5,959,675,013 Taka (86.9 million USD) (2006)[1] 1,398,155,030 Taka (20.3 million USD) (2006)[1] 5 9,383,621,728 Taka (2006)[2] 24,703 (Oct 2007)[3]

The Grameen Bank (Bengali: গ্রামীণ বাাংক) is a microfinance organization and community development bank started in Bangladesh that makes small loans (known as microcredit or "grameencredit"[4]) to the impoverished without requiring collateral. The name Grameen is derived from the word gram which means "rural" or "village" in the Bengali language.[5] The system of this bank is based on the idea that the poor have skills that are under-utilized. A group-based credit approach is applied which utilizes the peerpressure within the group to ensure the borrowers follow through and use caution in conducting their financial affairs with strict discipline, ensuring repayment eventually and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several developmentoriented businesses including fabric, telephone and energy companies. Another distinctive feature of the bank's credit program is that the overwhelming majority (98%) of its borrowers are women. The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, a Fulbright scholar at Vanderbilt University and Professor at University of Chittagong, launched a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation. The organization and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006;[6] the organization's Low-cost Housing Program won a World Habitat Award in 1998.


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       

1 History 2 Application of microcredit o 2.1 Village Phone Program o 2.2 Struggling members program 3 Operational statistics 4 Nobel Peace Prize 5 Related ventures 6 Criticism 7 See also 8 References 9 Further reading 10 External links

[edit] History
Muhammad Yunus, the bank's founder, earned a doctorate in economics from Vanderbilt University in the United States. He was inspired during the terrible Bangladesh famine of 1974 to make a small loan of US$27.00 to a group of 42 families so that they could create small items for sale without the burdens of predatory lending.[7] Yunus believed that making such loans available to a wide population would have a positive impact on the rampant rural poverty in Bangladesh.

Nobel Laureate Muhammad Yunus, the bank's founder

The Grameen Bank (literally, "Bank of the Villages", in Bangla) is the outgrowth of Yunus' ideas. The bank began as a research project by Yunus and the Rural Economics Project at Bangladesh's University of Chittagong to test his method for providing credit and banking services to the rural poor. In 1976, the village of Jobra and other villages surrounding the University of Chittagong became the first

areas eligible for service from Grameen Bank.[8] The Bank was immensely successful and the project, with support from the central Bangladesh Bank, was introduced in 1979 to the Tangail District (to the north of the capital, Dhaka).[8] The bank's success continued and it soon spread to various other districts of Bangladesh. By a Bangladeshi government ordinance on October 2, 1983, the project was transformed into an independent bank.[8] Bankers Ron Grzywinski and Mary Houghton of ShoreBank, a community development bank in Chicago, helped Yunus with the official incorporation of the bank under a grant from the Ford Foundation.[9] The bank's repayment rate was hit following the 1998 flood of Bangladesh before recovering again in subsequent years. By the beginning of 2005, the bank had loaned over USD 4.7 billion[10] and by the end of 2008, USD 7.6 billion[11] to the poor. The Bank today continues to expand across the nation and still provides small loans to the rural poor. By 2006, Grameen Bank branches numbered over 2,100.[12] Its success has inspired similar projects in more than 40 countries around the world and has made World Bank to take an initiative to finance Grameen-type schemes.[13] The bank gets its funding from different sources, and the main contributors have shifted over time. In the initial years, donor agencies used to provide the bulk of capital at very cheap rates. In the mid-1990s, the bank started to get most of its funding from the central bank of Bangladesh. More recently, Grameen has started bond sales as a source of finance. The bonds are implicitly subsidised as they are guaranteed by the Government of Bangladesh and still they are sold above the bank rate.[14]

[edit] Application of microcredit
Grameen believes that charity is not an answer to poverty. It only helps poverty to continue as it creates dependency and takes away individual's initiative to break through the cycle of poverty, whereas loans offer people the opportunity to take initiatives in business or agriculture, providing earnings and enabling them to pay off the debt. Grameen regards all human beings, including the poorest, as endowed with endless potential, and that unleashing the creativity in each individual should be the answer to poverty.[15] Grameen has offered credit to many poor, women, illiterate and unemployed people. It created access to credit on reasonable terms such as the group lending system and weekly-installment payment with reasonably long term of loans, enabling the poor to build on their existing skill to earn a better income in each cycle of loans.[15] Grameen’s objective has been to promote financial independence among the poor. Yunus encourages all borrowers to eventually become savers so that their local capital can be converted into new loans. Since 1995, Grameen has funded 90 percent of its loans with interest income and deposits collected, hence aligning the

interests of its new borrowers and depositor-shareholders. Hence, Grameen distinguishes itself from such institutions by converting deposits made in villages into loans for the more needy in the villages (Yunus and Jolis 1998).[16] It targets the poorest of the poor, with a particular emphasis on women, who receives 95 percent of the bank’s loans. Women represent a suitable clientele because, given that they have less access to alternatives, such as traditional credit lines and incomes, they are more likely to be credit constrained and they have an inequitable share of power in household decision making. Lending to women also generates considerable secondary effects, including empowerment of a marginalized segment of society (Yunus and Jolis 1998). This is especially crucial as Yunus claims that in 2004, women still have difficulty getting loans as it represented less than 1 percent of borrowers from commercial banks (Yunus 2004).[16] The interest rates charged by microfinance institutes including Grameen Bank is high compared to that of traditional banks; Grameen's interest (reducing balance basis) on its main credit product is about 20%.[17] Down the years, Grameen has also diversified the types of loans it makes. Among its new interests, hand-powered wells and loans to support the enterprises of Grameen members' immediate relatives. There were also seasonal agricultural loans and lease-to-own agreements for equipment and livestock. The bank also set a new goal for itself: making each of its branches free of poverty, as defined by benchmarks such as having adequate food and access to clean water and latrines.
16 Decisions[18]
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard work – in all walks of our lives. Prosperity we shall bring to our families. We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus. During the plantation seasons, we shall plant as many seedlings as possible. We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health. We shall educate our children and ensure that they can earn to pay for their education. We shall always keep our children and the environment clean. We shall build and use pit-latrines. We shall drink water from tubewells. If it is not available, we shall boil water or use alum. We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughter's wedding. We shall keep our centre free from the curse of dowry. We shall not practice child marriage. We shall not inflict any injustice on anyone, neither shall we allow anyone to do so. We shall collectively undertake bigger investments for higher incomes. We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her. If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline. We shall take part in all social activities collectively.

12. 13. 14. 15. 16.

Grameen Bank Building in Dhaka

Grameen Bank is best known for its system of solidarity lending.[13] The Bank also incorporates a set of values embodied in Bangladesh by the Sixteen Decisions.[19] At every branch of Grameen Bank the borrowers recite these Decisions and vow to follow them. As a result of the Sixteen Decisions, Grameen borrowers have been encouraged to adopt positive social habits. One such habit includes educating children by sending them to school. Since the Grameen Bank embraced the Sixteen Decisions, almost all Grameen borrowers have their school-age children enrolled in regular classes. This in turn helps bring about social change, and educate the next generation.[20] Solidarity lending is a cornerstone of microcredit and the system is now at work in over 43 countries. Although each borrower must belong to a five-member group, the group is not required to give any guarantee for a loan to its member. Repayment responsibility solely rests on the individual borrower, while the group and the centre oversee that everyone behaves in a responsible way and none gets into a repayment problem. There is no form of joint liability, i.e. group members are not obliged to pay on behalf of a defaulting member. However, in practice the group members often contribute the defaulted amount with an intention of collecting the money from the defaulted member at a later time. Such behavior is facilitated by Grameen's policy of not extending any further credit to a group in which a member defaults.[21] There is no legal instrument (no written contract) between Grameen Bank and its borrowers, the system works based on trust.[22] To supplement the lending, Grameen Bank also requires the borrowing members to save very small amounts regularly in a number of funds like emergency fund, group fund etc. These savings help serve as an insurance against contingencies.[13] In a country in which few women may take out loans from large commercial banks, Grameen has focused on women borrowers as 97% of its members are

women.[3] While a World Bank study has concluded that women's access to microcredit empowers them through greater access to resources and control over decision making, some other economists argue that the relationship between microcredit and women-empowerment is less straight-forward.[23] In other areas, Grameen's track record has also been notable, with very high payback rates—over 98 percent. However, according to the Wall Street Journal, a fifth of the bank's loans were more than a year overdue in 2001.[24] Grameen claims that more than half of its borrowers in Bangladesh (close to 50 million) have risen out of acute poverty thanks to their loan, as measured by such standards as having all children of school age in school, all household members eating three meals a day, a sanitary toilet, a rainproof house, clean drinking water and the ability to repay a 300 taka-aweek (around 4 USD) loan.[25]

[edit] Village Phone Program
Among many different applications of microcredit by the bank, one is the Village Phone program, through which women entrepreneurs can start a business providing wireless payphone service in rural areas of Bangladesh. This program earned the bank the 2004 Petersburg Prize worth of EUR 100,000/-, for its contribution of Technology to Development.[26] In the press release announcing the prize, the Development Gateway Foundation noted that through this program: ...Grameen has created a new class of women entrepreneurs who have raised themselves from poverty. Moreover, it has improved the livelihoods of farmers and others who are provided access to critical market information and lifeline communications previously unattainable in some 28,000 villages of Bangladesh. More than 55,000 phones are currently in operation, with more than 80 million people benefiting from access to market information, news from relatives, and more.[26]

[edit] Struggling members program
In 2003, Grameen Bank started a new program, different from its traditional group-based lending, exclusively targeted to the beggars in Bangladesh.[27] This program is focused on distributing small loans to beggars. The existing rules of banking are not applied, the loans are completely interest-free, the repayment period can be arbitrarily long, for example, a beggar taking a small loan of around 100 taka (about US $1.50) can pay only 2.00 taka (about 3.4 US cents) per week and furthermore the borrower is covered under life insurance free of cost.[28]

[edit] Operational statistics
One unusual feature of the Grameen Bank is that it is owned by the poor borrowers of the bank, most of whom are women. Of the total equity of the bank, the borrowers own 94%, and the remaining 6% is owned by the Government of Bangladesh.[3]

The bank has grown significantly between 2003-2007. As of October 2007, the total borrowers of the bank number 7.34 million, and 97% of those are women.[3] The number of borrowers has more than doubled since 2003, when the bank had only 3.12 million members.[29] Similar growth can be observed in the number of villages covered. As of October 2007, the Bank has a staff of over 24,703 employees and 2,468 branches covering 80,257 villages,[3] up from 43,681 villages covered in 2003.[29] Since its inception, the bank has distributed Tk 347.75 billion (USD 6.55 billion) in loans. Out of this, Tk 313.11 billion (USD 5.87 billion) has been repaid.[3] The bank claims a loan recovery rate of 98.35%, up from the 95% recovery rate claimed in 1998.[30] David Roodman has critiqued the accounting practices that Grameen used to determine this rate[24]

[edit] Nobel Peace Prize
Grameen Bank received several prestigious awards including the highest civilian award in Bangladesh, the Independence Day Award, in 1994. However, the greatest recognition of the bank's achievements came on October 13, 2006, when the Nobel Committee awarded Grameen Bank and its founder, Muhammad Yunus, the 2006 Nobel Peace Prize "for their efforts to create economic and social development from below."[31] The award announcement also mentions that: 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. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.[31] On December 10, 2006, Mosammat Taslima Begum, who used her first 16-euro (20-dollar) loan from the bank in 1992 to buy a goat and subsequently became a successful entrepreneur and one of the elected board members of the bank, accepted the Nobel Prize on behalf of Grameen Bank's investors and borrowers at the prize awarding ceremony held at Oslo City Hall.[32] Grameen Bank is the only business corporation to have won a Nobel Prize. In a speech given at the presentation ceremony, Professor Ole Danbolt Mjøs, Chairman of the Norwegian Nobel Committee, mentioned that, by giving the prize to Grameen Bank and Muhammad Yunus, the Norwegian Nobel Committee wished to focus attention on dialogue with the Muslim world, on the women's perspective, and on the fight against poverty.[33] The Nobel prize announcement was celebrated with a lot of enthusiasm in Bangladesh.[34] Some critics asserted that the award affirms neoliberalism.[23]

[edit] Related ventures
Main article: Grameen family of organizations

The Grameen Bank has grown into over two dozen enterprises represented by the Grameen Family of Enterprises. These organizations include Grameen Trust, Grameen Fund, Grameen Communications, Grameen Shakti (Grameen Energy), Grameen Telecom, Grameen Shikkha (Grameen Education), Grameen Motsho (Grameen Fisheries), Grameen Baybosa Bikash (Grameen Business Development), Grameen Phone, Grameen Software Limited, Grameen CyberNet Limited, Grameen Knitwear Limited, and Grameen Uddog (owner of the brand Grameen Check).[35] On July 11, 2005 the Grameen Mutual Fund One (GMFO), approved by the Securities and Exchange Commission of Bangladesh, was listed as an Initial Public Offering. One of the first mutual funds of its kind, GMFO will allow the over four million Grameen bank members, as well as non-members, to buy into Bangladesh's capital markets. The Bank and its constituents are together worth over USD 7.4 billion.[36] The work of Grameen Bank in Bangladesh Inspired the creation of the Grameen Foundation, which aims to share the Grameen philosophy and accelerate the impact of microfinance on the world’s poorest people.[37] Grameen Foundation, which has an A-rating from [Charity Watch],[38] not only provides microloans in the USA itself (the only developed country where this is done), but also supports microfinance institutions worldwide with loan guarantees, training, and technology transfer.[39] As of 2008, Grameen Foundation supports microfinance institutions in the following regions:[40]
  

Asia-Pacific: Bangladesh, China, East Timor, Indonesia, India, Lebanon, Pakistan, Philippines, Saudi Arabia, Yemen Americas: Bolivia, Dominican Republic, El Salvador, Haiti, Honduras, Mexico, Peru, USA Africa: Cameroon, Egypt, Ethiopia, Ghana, Morocco, Nigeria, Rwanda, Tunisia, Uganda

Premiering at the 2010 Sundance Film Festival, the film To Catch a Dollar documents the process of establishing Grameen America programs in Queens, New York in 2008. The documentary is expected to open in September 2010.

[edit] Criticism
Analysts have suggested that microcredit can bring communities into debt from which they cannot escape,[41][42][43][44] citing situations where microloans from the Grameen Bank were linked to exploitation and pressures on poor families to sell their belongings, leading in extreme cases to humiliation and ultimately suicides.[45] The Mises Institute's Jeffrey Tucker suggests that microcredit banks depend on subsidies in order to operate, thus essentially becoming another example of welfare,[46] whereas Yunus believes that he is working against the subsidized

economy, giving borrowers the opportunity to create businesses. Maulana Ibrahim, a reactionary imam in Bangladesh, spoke out against the Grameen Bank in 1993 for fostering "un-Islamic ways", alleging (referring to the lenders' pledge) that women were taking a vow not to obey their husbands and not to live in poverty anymore.[47] Grameen bank has been accused of tax evasion in a Norwegian Documentary: "Caught in Micro debt" these accusations have recently been repeated in a Spanish documentary: 'Microcredit'. The accusation is based on the unauthorised transfer of approximately 100 million USD donated by The Norwegian Agency for Development Cooperation (NORAD) from one Grameen entity to another 'Grameen Kalyan' in 1996, before the expiry of the Grameen bank's tax exemption. Muhammad Yunus denies that this is tax evasion: 'There is no question of tax evasion here. The Government has provided organizations with opportunities; we have made use of these opportunities with aim of benefitting our shareholders who are the rural poor women of Bangladesh.' The matter has since been resolved. David Roodman[48] and Jonathan Morduch[49] question the statistical validity of studies of microcredit's effects on poverty, pointing to the complexity of the situations involved.[50]

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