Grameen Bank

For more information on Grameen Bank, visit Britannica.com.

Type: Private State-Owned Company
Address: Mirpur Two, Dhaka 1216, Bangladesh
Telephone: +880 (2) 801-138
Fax: +880 (2) 803-559
Web: http://www.grameen.com
Employees: 13,000
Total Assets: $100 million (1998 est.)
Incorporated: 1983
NAIC: Commercial Banking; 513322 Cellular and Other Wireless

Grameen Bank founder Muhammad Yunus pioneered the concept of 'micro-credit'--minuscule loans to the very poor. The bank currently lends more than $500 million a year with a repayment rate of better than 97 percent (although critics have reported that some borrowers merely take out additional loans to meet their repayment schedules). Its Group Savings Funds have assets of $186 million. Grameen Bank operates 1,100 branches in half of Bangladesh's nearly 80,000 villages. The program has been successfully replicated in dozens of countries, including the Philippines, Malaysia, Vietnam, South Africa, and Bolivia. It has also been applied to inner city and rural poverty in rich nations in North America and Europe.

Muhammad Yunus was born in 1940 to a successful Muslim jeweler's family in Chittagong, then a part of colonial India. While teaching at a local college in the early 1960s, he noticed a need for a packaging plant in eastern Pakistan and established one with the help of his father and a loan from the state.

In 1965, Yunus left to study at the University of Colorado and Vanderbilt University under a Fulbright Scholarship. While teaching at Middle Tennessee State University in 1971, the War of Liberation broke out in eastern Pakistan, and Yunus lobbied for the Bengali cause in Washington, D.C.

Yunus returned home to the newly formed country of Bangladesh in 1972. Soon he was heading the economics department at Chittagong University. While there, the plight of the poor in the nearby village of Jobra distressed Yunus greatly as famine enveloped the country. With the help of his students, he surveyed the economic situation of the villagers and organized a project to plant higher yielding varieties of rice.

Such agrarian reforms required some financial and political finesse and stirred up considerable controversy. Yunus espoused the view that, as hunger and malnutrition limited a person's freedom of thought and action, so too was credit itself--access to economic resources--a basic human right. He developed a distrust of governmental and non-governmental aid programs whose funds, usually due to greed or infighting somewhere along the line, simply did not reach the society's very poorest members.

These people, Yunus found, existed in a cycle of debt, at the mercy of moneylenders charging ten percent interest a week and usurious traders. A person would borrow money for raw materials, work all day, then sell their handiwork back to the trader for a profit of only two cents. In 1976, Yunus had one of his students tally a list of villagers trapped in such situations. She came up with 42 names, who together needed less than US$27.00 to break out of the cycle and set out in business for themselves. Yunus loaned them the money himself.

The professor's attempts to get traditional banks to lend to poor people who had no collateral met with solid resistance. However, he was able to arrange for such a loan from the Janata Bank after months of wrangling and signing himself as guarantor. With this money, the Grameen Project (literally, 'of the village') was launched in January 1977.

Yunus then set out to develop a lending methodology that would work for his impoverished clients. Rather than have a large lump sum payment at the end of the loan period, he structured the loans with minuscule daily payments in order to detect problems early and to increase borrowers' confidence. This was soon changed to weekly payments to reduce the accounting load. The term of the loans was set at one year.

Another unique feature was the group of five that prospective borrowers had to organize. All the members would be collectively responsible for each individual's loan. Besides peer pressure, the groups were also a source of mutual support, and a large reason Grameen would be able to boast repayment rates in excess of 97 percent. Five percent of each loan went into a group fund that served as a kind of insurance.

The groups helped Grameen overcome its greatest source of resistance among the borrowers--purdah, or the set of Muslim practices relating to a woman's purity. (Although its clientele was evenly mixed at first, the bank soon began to loan more to females, who spent more of their profits on family needs rather than personal desires.) A rigid interpretation of these codes kept women indoors, out of sight of neighbors. In addition, many were afraid to handle money, traditionally the province of the husband. Grameen was able to help these women work within their own homes, more in harmony with purdah than other forms of employment. However, Grameen Bank would have to be vigilant against the practice of 'pipelining,' or turning over loans to the husbands for unauthorized uses.

After operating through the Janata Bank for a year, Yunus in 1978 struck up an arrangement with the Bangladesh Krishi (Agriculture) Bank which freed him from having to personally sign for every single loan (the program had under 500 borrowers at the time). The Krishi Bank also hired a few of Yunus's students, giving them their first salary for this work.

The program was expanded through 25 branches of the Central Bank in 1979. Yunus took a leave of absence to oversee operations in Tangail, in the country's center. He stepped into a lawless, desperate place but the bank continued to grow. Grameen disbursed $13.4 million in loans in 1981 and $23.9 million the next year, when it had 28,000 members.

In order to prove to skeptics the bank did not run merely through the personal charisma of Yunus, its ambitious expansion plan covered five districts isolated from each other. The plan was financed by the Central Bank and a $3.4 million loan from the International Fund for Agricultural Development. Grameen was able to borrow from the government at a two percent annual interest rate. It charged borrowers 20 percent a year simple interest, paying the principal off first. This resulted in an effective ten to 12 percent annual rate, according to Grameen workers.

Grameen was made its own, independent bank in 1983. Yunus served as the government-appointed managing director. Eventually, his position was changed so that he answered to the board of directors; however, the chairman remained a government appointee. The government's ownership was also gradually reduced from an initial 60/40 majority to 25 percent, which it held with its Somali Bank and the Bangladesh Krishi Bank. The other 75 percent (by 1993, 88 percent) was owned by the bank's members themselves. Bank headquarters were moved to Dhaka's financial district.

Against typical institutional resistance, it started a fund for modest housing loans in 1984, which provided ten-year loans in the $125 to $300 range for basic shelters. The way the bank interacted with its members developed as well. Its expectations were reflected in four resolutions adopted at a 1980 workshop which by 1984 had become the bank's famous "Sixteen Decisions." These ranged from abstractions--promising to follow the principles of "discipline, unity, courage, and hard work"--to practical mandates--"We shall not live in dilapidated houses. . . . We shall grow vegetables all the year round." Also included was a statement against the dowry system.

By the mid-1980s, the Grameen program had garnered international attention and various attempts to replicate it were being made in other undeveloped countries such as Malaysia and the Philippines. Grameen started its own replication program through the Grameen Trust, initially funded by the MacArthur Foundation. At home, it took over a fisheries project from the Bangladesh government.

Other Grameen-inspired programs began to address poverty in the United States from urban Chicago to Sioux and Cherokee reservations. Bill Clinton, then governor of Arkansas, asked Yunus to help set up a similar program in his home state in 1986. The Clintons remained avid supporters of the Grameen Bank. Yunus traveled to the United States in 1987 to testify before a Congressional committee; this resulted in extensive media coverage. Two years later, "Sixty Minutes" dispatched a crew to Bangladesh to report on the bank's success.

In 1991, a newly democratic government in Bangladesh made it a policy to forgive all government loans of less than 5,000 Bangladesh Takas or $125. As Grameen Bank was not on the government payroll, it could not forgive its micro-loans and survive, making it unable to share the same windfall with the very poor who made up its own clientele. A horrific cyclone in April 1991 also set back the bank's efforts considerably.

In 1993, Grameen organized a cooperative, Grameen Uddog (Initiatives), to help desperately poor local weavers sell their goods on the international market. The weavers produced a unique fabric, Grameen Check, which the group pitched in Europe and North America.

By the mid-1990s, Grameen was lending US$500 million a year. Its 1,000 branches served two million borrowers--more than nine in ten of them women--in 35,000 villages. It had 11,000 employees and instituted a pension program for them. The value of its cumulative loans reached US$1 billion in 1996 and US$2 billion in 1998.

Grameen diversified the types of loans it made. 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 posited 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.

Most rural villages in Bangladesh lacked electricity and in 1997, Bangladesh had only one phone for every 300 people. Communicating with distant relatives required the use of a messenger and an inordinate expenditure of time. A unique solution was proposed to help the poor communicate, bypassing the infrastructure of land phone lines. GrameenPhone, a four member, for-profit consortium 51 percent owned by Norway's Telenor, became one of Bangladesh's three cellular phone providers in 1997. The nonprofit Grameen Telecom unit bought its airtime for resale to village "telephone ladies," who in turn sold their neighbors access to their own cellular phones, bought with Grameen loans. To power these phones in rural areas, Grameen Shakti was formed to develop solar energy sources. Two other offshoots of the phone program, Grameen Cybernet and Grameen Communications, offered Internet services on a for-profit and nonprofit basis, respectively.

The high cost of healthcare remained one of the Grameen Bank's biggest concerns, it being one force that could totally wipe out the progress any one borrower made. A health program was set up to provide health insurance at a very low cost (less than $5 per year). Retirement funds were also organized around the profitable Grameen businesses, managed by the Grameen Securities Management Company.

Natural forces also offered up potent problems. In 1998, flooding destroyed the shelters of half the bank's borrowers and left Yunus scrambling for outside financial support. The momentum of the micro-credit concept continued nevertheless. In the spring of 1999, the Soros Economic Development Fund gave Grameen Telecom a $10.6 million loan to place a cell phone in each of 50,000 villages. As the Grameen Foundation USA established Project Enterprise Peer Lending programs in Harlem and Brooklyn, a launch party for Professor Yunus's new book at the United Nations' New York headquarters drew numerous celebrities.

Principal Subsidiaries

Grameen Trust; Grameen Motsho (Fisheries) Foundation; Grameen Uddog; Grameen Telecom; GrameenPhone (35%); Grameen Shakti (Energy); Grameen Cybernet Ltd.; Grameen Communications; Grameen Securities Management Company; Grameen Foundation USA; Grameen Shamogree (Products); Grameen Kalyan (Welfare).

Principal Competitors

World Bank.

Further Reading

Auwal, Mohammad A., "Promoting Microcapitalism in the Service of the Poor: The Grameen Model and Its Cross-Cultural Adaptation," Journal of Business Communication, January 1996, pp. 27-49.

Bernasek, Alexandra, and James Ronald Stanfield, "The Grameen Bank As Progressive Institutional Adjustment," Journal of Economic Issues, June 1997, pp. 359-66.

Bornstein, David, The Price of a Dream: The Story of the Grameen Bank and the Idea That Is Helping the Poor to Change Their Lives, New York: Simon & Schuster, 1996.

"Community Banking: Group Power," Economist, September 10, 1994, pp. 93-94.

Counts, Alex, Give Us Credit: How Muhammad Yunus's Micro-Lending Revolution Is Empowering Women from Bangladesh to Chicago, New York: Times Books, 1996.

Currie, Antony, "Small Lenders Count Too," Euromoney, July 1996, p. 20.

Dichter, Thomas, Review of Give Us Credit by Alex Counts and Women at the Center by Helen Todd, Finance and Development, September 1997, pp. 52-54.

Hashemi, Syed M., Sidney Ruther Schuler, and Ann P. Ripley, "Rural Credit Programs and Women's Empowerment in Bangladesh," World Development, April 1996, pp. 635-53.

Jolis, Alan, "The Good Banker," Independent, Sunday supplement, May 5, 1996.

Jordan, Miriam, "It Takes a Cell Phone--A New Nokia Transforms a Village in Bangladesh," Wall Street Journal, June 25, 1999, p. B1.

Kamaluddin, S., "Lender with a Mission," Far Eastern Economic Review, March 18, 1993, pp. 38, 40.

Margolis, Judy, "When a Little Money Goes a Long Way," Canadian Banker, January/February 1996, pp. 26-30.

"Microlending: From Tiny Acorns," Review of Banker to the Poor by Muhammad Yunus and Alan Jolis, Economist, December 12, 1998.

Power, Carol, "Banker to Poor Makes Big Impact with Small Loans," Irish Times, June 25, 1999, p. 54.

Rahman, Aminur, "Micro-Credit Initiatives for Equitable and Sustainable Development: Who Pays?" World Development, January 1999, pp. 67-82.

Taub, Richard P., "Making the Adaptation Across Cultures and Societies: A Report on an Attempt to Clone the Grameen Bank in Southern Arkansas," Journal of Developmental Entrepreneurship, Summer 1998, pp. 53-69.

Todd, Helen, Women at the Center: Grameen Bank Borrowers After One Decade, Boulder, Colo.: Westview Press, 1996.

Wahid, Abu, "The Grameen Bank and Women in Bangladesh," Challenge, September/October 1999, pp. 94-101.

Yaron, Jacob, "Successful Rural Finance Institutions," Finance and Development, March 1994, pp. 32-35.

Yunus, Muhammad, and Alan Jolis, Banker to the Poor: Micro-Lending and the Battle Against World Poverty, New York: PublicAffairs, 1999.

— Frederick C. Ingram

Grameen Bank (GB)

Type	Body Corporate (Bank Ordinance)
Founded	1983
Headquarters	Dhaka, Bangladesh
Area served	Bangladesh
Key people	Muhammad Yunus, founder
Industry	Finance
Products	Financial Services Microfinance
Revenue	▲ 6,335,566,324 Taka (92.3 million USD) (2006)[1]
Operating income	▲ 5,959,675,013 Taka (86.9 million USD) (2006)[1]
Net income	▲ 1,398,155,030 Taka (20.3 million USD) (2006)[1]
Total assets	59,383,621,728 Taka (2006)[2]
Employees	24,703 (Oct 2007)[3]
Website	http://www.grameen-info.org/

The Grameen Bank (Bengali: গ্রামীণ ব্যাংক) 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 word "Grameen", derived from the word "gram" or "village", means "of the village". 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 peer-pressure 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 development-oriented businesses including fabric, telephone and energy companies. Another distinctive feature of the bank's credit program is that a significant majority 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^[5]; the organisation's Low-cost Housing Programme won a World Habitat Award in 1998.

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

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 USD$27.00 to a group of 42 families so that they could create small items for sale without the burdens of predatory lending.^[6] 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.^[7] 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).^[7] 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.^[7] Bankers from ShoreBank, a community development bank in Chicago, helped Yunus with the official incorporation of the bank under a grant from the Ford Foundation.^[8] 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^[9] and by the end of 2008, USD 7.6 billion^[10] 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.^[11] 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.^[12]

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.^[13]

Application of microcredit

16 Decisions[14]

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.

Grameen Bank Building in Dhaka

Grameen Bank is best known for its system of solidarity lending.^[12] The Bank also incorporates a set of values embodied in Bangladesh by the Sixteen Decisions.^[15] 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.^[16]

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.^[17]

There is no legal instrument (no written contract) between Grameen Bank and its borrowers, the system works based on trust.^[18] 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.^[12]

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.^[19] 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.^[20] 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-a-week (around 4 USD) loan.^[21]

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.^[22] 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.^[22]

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.^[23] 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.

The bank does not force borrowers to give up begging; rather it encourages them to use the loans for generating income by selling low-priced items. Based on a paper presented in the Global Microcredit Summit in 2006 by one of the bank's managers, as of May 2006, around 73,000 beggars have taken loans of about Tk 58.32 million (approx. USD 833,150) and repaid Tk. 34.78 million (about USD 496,900).^[24]

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.^[25] 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.^[25] 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.^[26] The Wall Street Journal, in November, 2001, published an article expressing doubt about the 95% recovery rate from 1996 and the accounting practices that Grameen used to determine this rate.^[20]

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."^[27] 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.^[27]

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.^[28]

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.^[29]

The Nobel prize announcement was celebrated with a lot of enthusiasm in Bangladesh.^[30] Some critics asserted that the award affirms neoliberalism.^[19]

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).^[31]

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.^[32]

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.^[33] Grameen Foundation, which has an A-rating from Charity Watch,^[34] not only provides microloans in the USA itself (the only rich country where this is done), but also supports microfinance institutions worldwide with loan guarantees, training, and technology transfer.^[35] As of 2008, Grameen Foundation supports microfinance institutions in the following regions:^[36]

• 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

Criticism

This article's Criticism or Controversy section(s) may not present a neutral point of view of the subject. It may be better to integrate the material in those sections into the article as a whole.

Sudhirendar Sharma, a development analyst, claims that the Grameen Bank has "landed poor communities in a perpetual debt-trap",^[37] and that its ultimate benefit goes to the corporations that sell capital goods and infrastructure to the borrowers.^[38] It has also attracted criticism from the former Prime Minister of Bangladesh, Sheikh Hasina, who commented, "There is no difference between usurers [Yunus] and corrupt people."^[39] Hasina touches upon one criticism of Grameen Bank: the high rate of interest that the bank demands from those seeking credit.^[40] Similar to all microfinance institutes, the interest charged by Grameen Bank is higher compared to that of traditional banks, as Grameen's interest (reducing balance basis) on its main credit product is about 20%.^[41] The Mises Institute's Jeffrey Tucker has criticized the Grameen Bank,^[42] asserting that the Grameen Bank and others based on the Grameen model are not economically viable and depend on subsidies in order to operate, thus essentially becoming another example of welfare. Another source of criticism is that of the Grameen's Sixteen Decisions.^[43] Critics^[who?] say that the bank's Sixteen Decisions force families and borrowers to abide by the rules and regulations set forth by the bank. David Roodman and Jonathan Morduc ^[44] disagreed with Muhammad Yunus's citation “5 percent of the Grameen borrowers get out of poverty every year,”. They found the opposite to be true: lending to women actually makes families poorer.^[45]

See also

Sustainable development portal

• Grameen America, Grameen's microfinance project in the United States
• Opportunity International
• Islamic banking
• JAK members bank, a Swedish interest-free bank
• Grama Vidiyal, Indian Microfinance Bank

Notes

• Bornstein, David. The Price of a Dream: The Story of the Grameen Bank. Oxford University Press, NY: 2005, ISBN 0-19-518749-0
• Counts, Alex, Give Us Credit , Crown, 1996, ISBN 0-8129-2464-9
• Sachs, Jeffrey. "The End of Poverty". Penguin Books, NY: 2005, ISBN 0-14-303658-0
• Yunus, Muhammad (with Alan Jolis), Banker to the Poor: The Autobiography of Muhammad Yunus, Founder of Grameen Bank, Oxford University Press: USA, ISBN 0-19-579537-7
• "Micro Loans for the Very Poor", New York Times, February 16, 1997
• Cockburn, Alexander, "A Nobel Peace Prize for Neoliberalism?" http://www.counterpunch.org/cockburn10202006.html

References

1. ^ ^{a b c} Ahmed & Ahmed (Chartered Accountants) (2007-08-01). "GRAMEEN BANK Profit and Loss Account, for the year ended 31 December 2006" (pdf). Auditors’ Report and Financial Statements OF Grameen Bank. Grameen Communications. http://www.grameen-info.org/bank/auditreport/AuditReport2006/placcounts.pdf. Retrieved 2008-01-17. 
2. ^ Ahmed & Ahmed (Chartered Accountants) (2007-08-01). "GRAMEEN BANK Balance Sheet, As at 31 December 2006" (pdf). Auditors’ Report and Financial Statements OF Grameen Bank. Grameen Communications. http://www.grameen-info.org/bank/auditreport/AuditReport2006/blancesheet.pdf. Retrieved 2008-01-17. 
3. ^ ^{a b c d e f} "Grameen Bank At a Glance". Grameen Communications. http://www.grameen-info.org/index.php?option=com_content&task=view&id=26&Itemid=175. Retrieved 2009-07-07. 
4. ^ Grameen Bank What is Microcredit
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External links

• Grameen Bank Official Site
• Grameen Bank News
• gramBangla, Australian Bangladeshi Community Grameen Support Group
• Grameen Bank: Taking Capitalism to the Poor, Mainsah, E. et al., Chazen Journal of International Business, Columbia Business School, 2004
• A video by Muhammad Yunus talking about Grameen Bank [1]
• Grameen II: The First Five Years, 2001-2005; Stuart Rutherford et al. for MicroSave, February 2006.
• Grameen Bank History
• YuNuSphere - Expanding Dr. Yunus' Sphere of Influence by promoting Social business and the Grameen principle of "Credit without Collateral"
• The crushing burden of microcredit F24 international report
• Grameen America - Grameen's microfinance operations in the US

Awards and achievements
Preceded by Mohamed ElBaradei and International Atomic Energy Agency	Nobel Peace Prize Laureate with Muhammad Yunus 2006	Succeeded by Al Gore and Intergovernmental Panel on Climate Change

v • d • e Laureates of the Nobel Peace Prize Kofi Annan / United Nations (2001) · Jimmy Carter (2002) · Shirin Ebadi (2003) · Wangari Maathai (2004) · International Atomic Energy Agency / Mohamed ElBaradei (2005) · Grameen Bank / Muhammad Yunus (2006) · Al Gore / Intergovernmental Panel on Climate Change (2007) · Martti Ahtisaari (2008)  · Barack Obama (2009) Complete roster: 1901–1925 · 1926–1950 · 1951–1975 · 1976–2000 · 2001–present

v • d • e Gandhi Peace Prize laureates Julius Nyerere (1995) • A. T. Ariyaratne (1996) • Gerhard Fischer (1997) • Ramakrishna Mission (1998) • Baba Amte (1999) • Grameen Bank, Nelson Mandela (2000) • John Hume (2001) • Bharatiya Vidya Bhavan (2002) • Václav Havel (2003) • Coretta Scott King (2004) • Desmond Tutu (2005)

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