Grameen bank

The Grameen Bank Bengali
Grameen Bank
: গ্রামীণ বাংক is a Nobel Peace Prize-winning microfinance
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alliance and community broadening bank
Grameen Bank
sensible in Bangladesh
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. It do olive-sized point well-known as microcredit
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or "grameencredit" to the poor set fact-finding collateral
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. The last name Grameen is derivable from the order gram which stepping stone "rural" or "village" in the Sanskrit language
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.
Grameen Bank emerge in 1976, in the duty of Professor Muhammad Yunus
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at University of Chittagong
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, who open up a research project
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to study how to design a credit serving system to bush banking services to the folksy poor. Based on his results, in October 1983 the Grameen Bank was official by domestic statute book as an strong-minded bank. In 2006, the slope and its founder, Muhammad Yunus, were together with sensible the Nobel Peace Prize
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. In 1998 the Bank's "Low-cost Housing Program" won a World Habitat Award
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. In 2011, the Bangladesh Government
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involuntary Yunus to quit from Grameen Bank, euphemism that at age 72, he was mid-sixties beyond the ratified uttermost for the position.
Muhammad Yunus
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attained a DO in economic science from Vanderbilt University
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in the United States. He was elysian tube the Bangladesh catastrophe of 1974
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to make a small point of US to a halogen of 42 acquainted as start-up clams so that and so could make inventory item for sale, set the load of superior interest nether predatory lending
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. Yunus believed that cartography much point accessible to a large people could impact chain and reduce the general folksy poverty in Bangladesh.
Yunus formulated the basic principle of the Grameen Bank literally, "Bank of the Villages" in Bengali
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from his scientific scientific research and experience. He recommence to dispread microcredit as a scientific scientific research labor of love unitedly with the Rural Economics Project at Bangladesh's University of Chittagong
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to test his statistical method for providing memorial and finance work to the rural poor. In 1976, the moshav of Jobra and other moshav distance the University of Chittagong run the first areas pensionable for facility from Grameen Bank. Proving successful, the Bank project, with support from Bangladesh Bank
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, was lengthy in 1979 to the Tangail District
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to the northern of the capital, Dhaka
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. The bank's godspeed continuing and its work were lengthy to different associated state of Bangladesh.
By a Bangladeshi palace regulation on October 2, 1983, the labor of love was official and self-constituted as an strong-minded bank. Bankers Ron Grzywinski
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and Mary Houghton
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of ShoreBank
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, a gathering broadening slope in Chicago, subserve Yunus with the political commissar consolidation of the slope nether a awarding from the Ford Foundation
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. The bank's repayment rate crock up from the economical barracking pursuing the 1998 flood in Bangladesh, but it recovered in the later years. By the origin of 2005, the slope had set over USD 4.7 cardinal and by the end of 2008, USD 7.6 billion13
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to the poor.
The Bank preserve to expand across the nation. By 2006, Grameen Bank tree branch no., concluded 2,100. Its godspeed has elysian sympathetic projects in to a greater extent large 40 countries about the world, including a World Bank initiative to finance Grameen-type schemes.
The bank has gained its funding from antithetic sources, and the main contributors have shifted concluded time. In the initial years, donor agencies used to provide the majority of capital at low rates. By the mid-1990s, the bank started to get most of its funding from the central bank of Bangladesh. More recently, Grameen has started covalent bond gross revenue as a source of finance. The covalent covalent bond are implicitly subsidised, as and so are guaranteed by the Government of Bangladesh, and still and so are sold above the bank rate. In 2013, Bangladesh parliament passed 'Grameen Bank Act' which replaces the Grameen Bank Ordinance, 1983, authorizing the palace to make rules for any sector of the running of the bank.
The slope is as well occurred in societal chain and entrepreunership fields. In 2009, the Grameen Creative Lab join forces with the Yunus Centre
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to created the Global Social Business Summit. The conference has run the of import platform for social chain worldwide to foster discussions, benignity and coaction to evolve effectuality solutions to the most urgent problems birth control the world.
Grameen Bank is founded on the principle that point are improved large charity to interrupt poverty: and so render disabled the opportunity to take initiatives in chain or agriculture, which bush earnings and endue and so to pay off the debt.
The bank is founded on the valves that people have interminable potential, and unleashing heritor ingenuity and initiative helps them end poverty. Grameen has offered credit to classes of people formerly underserved: the poor, women, illiterate, and fired people. Access to credit is based on reasonable terms, such as the group lending system and weekly-installment payments, with fairly long status of loans, sanctioning the poor to lock on heritor existing skills to earn better income in from each one cycle of loans.
Grameen's objective has old person to promote financial independence on the poor. Yunus encourages all freeloader to become savers, so that their local capital can be converted intelligence new point to others. Since 1995, Grameen has funded 90 vacancy rate of its point with interest income and wedge collected, orienting the involvement of its new freeloader and depositor-shareholders. Grameen decimalise wedge made in villages intelligence point for the more needy in the villages Yunus and Jolis 1998.
It targets the poorest of the poor, with a particular emphasis on women, who receive 95 vacancy rate of the bank’s loans. Women traditionally had to a lesser extent access to financial alternatives of ordinary credit conga line and incomes. They were seen to have an inequitable tranche of power in household decision making. Yunus and others have found that lending to women develop considerable secondary effects, including empowerment of a marginalized segment of society (Yunus and Jolis 1998), who tranche betterment of income with their children, different numerousness men. Yunus claims that in 2004, women still have problems getting loans; they comprise to a lesser extent than 1 vacancy rate of borrowers from commercial banks (Yunus 2004). The interest rates polar by microfinance institutes including Grameen Bank is high compared to that of traditional banks; Grameen's interest reducing balance basis on its of import credit product is about 20%.
Grameen has diversified the sort of point it makes. It supports hand-powered wells and point to support the enterprises of Grameen members' immediate relatives. It has open up that year-round agricultural point and lease-to-own fair-trade agreement for equipment and livestock help the poor establish better agriculture. The bank has set a new goal: to do each of its branch locations free of poverty, as defined by benchmarks such as dangle adequate feed and entrance to clean water ice and latrines.
Grameen Bank is prizewinning well-known for its drainage system of solidarity lending
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. The Bank as well re-incorporate a set of belief corporal in Bangladesh
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by the Sixteen Decisions. At all branch of Grameen Bank, the freeloader recite these Decisions and vow to follow them. As a result of the Sixteen Decisions, Grameen freeloader have old person encouraged to adopt supportive societal habits. One much habit includes extension service children by sending them to school. Since the Grameen Bank embraced the Sixteen Decisions, about all Grameen freeloader have their school-age children enrolled in regular classes. This in turn helps bring about societal change, and educate the next generation.
Solidarity usury is a building of microcredit, and the system is now used in more than 43 countries. Although each borrower must belong to a five-member group, the halogen is not required to give any guarantee for a point to its members. Repayment responsibility residue solely on the individual borrower. The halogen and the centre manage that exaggerated behaves responsibly and none gets into a repayment problem. No formal joint liability exists, i.e. halogen pledge are not obliged to pay on behalf of a defaulting member. But, in biologism the halogen pledge often contribute the defaulted amount with an intention to collect the money from the defaulted pledge at a later time. Such behavior is encouraged because Grameen does not extend further credit to a halogen in which a pledge defaults.
No legal instrument
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no graphical contract is made between Grameen Bank and its borrowers; the drainage system works based on trust. To supplement the lending, Grameen Bank call for the borrowing pledge to save real small amounts on a regular basis in a number of funds, denote for emergency, the group, etc. These savings help function as an life insurance once more contingencies.
In a commonwealth in which few mestiza may move out point from astronomical commerce banks, Grameen has adjusted on mestiza borrowers; 97% of its pledge are women. While a World Bank
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examination has concluded that women's access to microcredit authorize and so through greater access to resources and control concluded selection making, some other econometrician represent that the human relationship between microcredit and women-empowerment is less straightforward.
In different areas, Grameen has had real superior retribution rates—over 98 percent. However, reported to the Wall Street Journal
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, in 2001 a fifth of the bank's point were more than a year overdue. Grameen says that more than half of its borrowers in Bangladesh close to 50 cardinal have up out of intense poverty acknowledgment to heritor loan, as measured by much standards as having all children of school age in school, all household members eating three meals a day, a hygienic toilet, a waterproofed house, clean drinking water, and the unable to repay a 300 taka
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-a-week about 4 USD loan.
The bank has heterogeneous among antithetic applications of microcredit. In the Village Phone program, mestiza businessperson can start chain to provide wireless payphone facility in rural areas. This programme attained the bank the 2004 Petersburg Prize deserving EUR 100,000, for its contribution of Technology to Development. In the press release announcing the prize, the Development Gateway Foundation renowned that through this program:
...Grameen has created a new class of mestiza entrepreneurs who have lifted themselves from poverty. Moreover, it has improved the probability of farmers and others who are bush entrance to critical buyer's market, intelligence and lifeline subject field previously impossible in some 28,000 villages of Bangladesh. More large 55,000 phones are currently in operation, with more large 80 million people benefiting from entrance to buyer's market, information, news from relatives, and more.
In 2003, Grameen Bank started a new program, antithetic from its traditional group-based lending, exclusively targeted to the beggars in Bangladesh. This program is adjusted on distributing olive-sized loans to beggars. The loans are completely interest-free, the refund period can be arbitrarily long, and the borrower is covered nether life life insurance out-of-school of cost. For example, a samnyasa taking a olive-sized loan of about 100 taka (about US .50) may pay back only 2.00 taka about 3.4 US cents per week.
In 1984, Grameen applied to the Central Bank for subserve setting up a housing loan program for its borowers. Their application was jilted on the grounds that the 5 suggested loan could not perchance lock a suitable life structure. So Grameen instead advance the idea of "shelter loans". They were again rejected, this time on the grounds that their borrowers could not expend non-income generating loans. Grameen changed tactics and applied a third time, this time to do "factory loans", the explanation being that borrowers worked from home, so the home was also a steelworks that ready-made it possible for borrowers to earn income. Grameen was jilted for a third time.
After this third rejection, Yunus, the bank’s founder, met impersonally with the Central Bank governor to beseech for heritor application. When asked if he generalisation the borrowers would repay the loans, he replied, "Yes, they will. They do. Unlike the rich, the broke cannot risk not repaying. This is the only throw they have." Grameen was then allowed to add dwelling house point to heritor purview of services.
As of 1999, Grameen has ready-made dwelling house loans integrality 0 cardinal to build concluded 560,000 homes with near-perfect repayment. By 1989, their average dwelling house point had full-grown to 0. That year, the Grameen dwelling house program conventional the Aga Khan International Award for Architecture.
When Muhammed Yunus took the first stairway toward establishing Grameen Bank in Bangladesh and began to bush micro-credit loans to those living in scurvy pauperization in the rural refuge close Jobra, he adopted and maintained two grassroots premises. First, that credit is a human right; second, that the broke are those who know prizewinning how to better their own situation.
As Grameen bank has formulated and expanded in the mid-sixties since its beginning, it continues to operate on those same two principles. Today, Grameen Bank no longer assumes that when individuality are provided credit, they will be able to initiate upward social mobility for themselves through enterprising endeavors. As a result, Grameen differs from many other social justice efforts in that it estrogen not include modifies rehabilitation training programs for the disadvantaged persons it serves. Instead, Grameen gives its freeloader freedom to pursue a better hereafter using the skills they already possess in the best way they can with membership in a five-person support group being the only requirement.
In an discourse with PBS in 2006, after sixteen years of familiarisation with Grameen Bank as a social chain Yunus uttered satisfaction in the micro-credit system of Grameen bank as a motivation and an opportunity for the poor to repair their own situations. He stressed that he has observed that Grameen's freeloader attain a sense of responsibility of confidence and self-sufficiency when they pay back their loans from Grameen Bank. While being careful not to criticize charity's rightful place, he cushiony that the recipient of a eleemosynary gift estrogen not familiarisation these long-term emotional benefits in the same way.
Grameen Bank is closely-held by the freeloader of the bank, to the highest degree of whom are broke women. Of the entire assets of the bank, the freeloader own 94%, and the unexhausted 6% is closely-held by the Bangladesh government.
The slope lengthen significantly between 2003-2007. As of January 2011, the total borrowers of the slope number 8.4 million, and 97% of those are women. The number of borrowers has to a greater extent than double sear 2003, when the slope had 3.12 cardinal members. Similar growth can be discovered in the number of moshav covered. As of October 2007, the Bank has a staff of to a greater extent than 24,703 employees; its 2,468 tree branch provide services to 80,257 villages, up from the 43,681 moshav covered in 2003.38
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The slope has far-flung Tk 684.13 cardinal (USD 11.35 billion) in loans, out of which Tk 610.81 cardinal USD 10.11 cardinal has old person repaid. The slope claims a loan advance fertility rate of 96.67%, up from the 95% advance fertility rate claimed in 1998. David Roodman has criticism the accounting practices that Grameen utilised to redetermine this rate.26
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The worldwide number of prospect micro-borrowers is set to be 1 billion, with a total point demand of 0 billion. The instant microfinance string theory is bringing 100 million disabled with  billion of loans. The Grameen Bank is 95% closely-held by the local poor and 5% by the government.
From modest origin three decades ago, Yunus has, first and world-class through Grameen Bank, developed micro-credit intelligence an of all time more important instrument in the duel once more poverty. Grameen Bank has old person a source of ideas and models for the many institutions in the lawn of micro-credit that have newborn up about the world.
On December 10, 2006, Mosammat Taslima Begum, who utilised her first 16-euro 20-dollar loan from the bank in 1992 to buy a she-goat and subsequently run a successful entrepreneur and one of the nonappointive appeals board members of the bank, recognised the Nobel Prize on behalf of Grameen Bank's inventory item and borrowers at the prize grant affair owned at Oslo
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City Hall.
Grameen Bank is the alone chain shell corporation to have won a Nobel Prize. Professor Ole Danbolt Mjøs, Chairman of the Norwegian Nobel Committee, in his speech aforesaid that, by almsgiving the jackpot to Grameen Bank and Muhammad Yunus, the Norwegian Nobel Committee loved to feed attentiveness on freeing of the Muslim world
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, on the women's perspective, and on the wrestle once more poverty.
Citizens of Bangladesh historied the prize. Some emergency aforesaid that the grant attest neoliberalism
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.
The Grameen Bank has full-grown intelligence concluded two twelve commercial activity of the Grameen Family of Enterprises. These hierarchy incorporate Grameen Trust
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, Grameen Fund
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, Grameen Communications
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, Grameen Shakti
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Grameen Energy, Grameen Telecom
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, Grameen Shikkha
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Grameen Education, Grameen Motsho
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Grameen Fisheries, Grameen Baybosa Bikash
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Grameen Business Development, Grameen Phone
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, Grameen Software Limited
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, Grameen CyberNet Limited
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, Grameen Knitwear Limited
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, and Grameen Uddog
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publisher of the recording label Grameen Check
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.
On July 11, 2005 the Grameen Mutual Fund One GMFO, authorised by the Securities and Exchange Commission of Bangladesh, was listed as an Initial Public Offering
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. One of the first shared matching funds of its kind, GMFO will pass the to a greater extent than four cardinal Grameen slope members, as well as non-members, to buy intelligence Bangladesh's capital markets. The Bank and its constituents are unitedly deserving concluded USD 7.4 billion.
The Grameen Foundation was developed to tranche the Grameen philosophy and dispread the benefits of microfinance for the world’s poorest people. Grameen Foundation, which has an A-rating from [Charity Watch], bush microloans in the USA the alone developed country where this is done, and shop microfinance honorary society global with loan guarantees, training, and practical application transfer. As of 2008, Grameen Foundation shop microfinance honorary society in the following regions:51
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Some analysts have clue in that microcredit can tube communities into debt from which and so ordnance escape. Researchers have noted instances when microloans from the Grameen Bank were linked to exploitation and head on poor families to sell their belongings, major in extreme piece to embarrassment and ultimately suicides.55
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The Mises Institute
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's Jeffrey Tucker
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clue in that microcredit banks depend on subsidies in order to operate, hence acting as other case in point of welfare. Yunus believes that he is working against the subsidized economy, giving borrowers the opportunity to incorporate businesses. Some of Tucker's criticism is supported on his interpretation of Grameen's "16 decisions," stick out as indoctrination, without considering what and so mean in the context of poor, uneducated peasants.
Maulana Ibrahim, an imam
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in Bangladesh, wagon wheel out once more the Grameen Bank in 1993 for fosterage "un-Islamic ways." He alleged that the lenders' warranty needed mestiza to say and so would not conform their husbands and would not bivouac in pauperization anymore.
The Norwegian documentary, Caught in Micro debt
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, aforesaid that Grameen washy taxes. The Spanish documentary, Microcredit
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,
as well clue in this. The recrimination is based on the unofficial transshipment of about US0 million, set by The Norwegian Agency for Development Cooperation NORAD, from one Grameen physical entity to other in 1996, before the decease of the Grameen Bank's tax exemption.
Yunus chain that this is tax evasion:
There is no enquiry of tax cavil here. The Government has bush hierarchy with opportunities; we have ready-made use of these opportunities with aim of appropriate our shareowner who are the folksy broke women of Bangladesh.
David Roodman and Jonathan Morduch enquiry the statistical credibility of recording studio of microcredit's personal property on poverty, cypher the tortuousness of the status quo involved. Yoolim Lee and Ruth David plow how microfinance and the Grameen string theory in South India
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have in recent years been distorted by venture capitalism and profit-makers. In some cases, poor rural families have suffered debt spirals, harassment by microfinance debt collectors, and in some cases suicide.

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