Grameen Bank- The bank for poor

The Grameen Bank of Bangaldesh was founded by renowned economist Dr. Muhammad Yannus. It was started in 1976 in a small village in Bangaldesh. It mainly stressed on the empowerment of women and alleviation of poverty through mirco credit programmes. It believed that the above can be achieved by creating self-employment opportunities for vast multitude of unemployed people of rural areas in Bangaldesh. It was also able to attain its goals and was awarded Noble Peace Prize in 2006 for providing both social and economic development support system at the grass root level.     

         

When the Grameen bank started its operation in 1976 there was no banking or credit facilities available to the disadvantaged people living in rural areas of Bangladesh. They had to depend on money lenders who charged very high rates for lending. So the bank addressed the grievances of the  poor and needy and removed the dependency on money lenders . They started working towards the creation of opportunities for self-employment. Like conventional banks they too gave loans and accepted deposits from the people who are destitute, but they had some unique features which differentiated them from the conventional banks.

•     Grameen bank gave away collateral free loans, this helped the people to a greater extent who did not have any property to pledge
•      In this bank the poorest people get the highest priority over others
•      97% of the borrowers are women, this implies that they are more inclined towards the empowerment of women
•      They give option to the defaulters a option to reschedule their loans and payment dates
•      If the borrower dies without repaying the loan, the bank will not ask the family of deceased to repay the loan instead it will take the liability
•       Loans are offered at simple rates while the conventional banks offer at compounded rate

Lessons Learnt

•      This bank introduced the concept of micro credit and a calculated risk was taken by them
•       The bank targeted the people which were left out by the conventional bank and reaped the benefit out of it 
•       Women were targeted in particular as are considered more responsible than men in the family