Grameen Bank Case Study

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  • Topic: Muhammad Yunus, Companies of Bangladesh, Rural community development
  • Pages : 14 (4454 words )
  • Download(s) : 224
  • Published : September 3, 2010
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Social Entrepreneurship
exploring the unexplored………. 

GRAMEEN BANK – The bank for the poor.

In 2006 Mohammed Yunus and the Grameen bank were jointly awarded the Nobel Peace Prize, “for their efforts to create economic and social development from below”.

Analyzed the root cause of the misery of the rural women of Bangladesh who work hard day and night and are still not able to get out of the clichés of poverty, thanks to the middle men and money lenders. So he found out that how a meager loan can free the whole village from the poverty. Then he has taken a critical view on the donor system that prevailed at that time. He has discussed in detail his conflicts with the World Bank. He has justified his views against the system of donor funding with the help of the case of a beggar and how a person paying him few pennies is spoiling his life. He rejected huge amount of loans from World Bank and his success also influenced the senior leadership of World Bank to change their views. In the late 1990s the Bank faced repayment problems and a developing financial crisis. Strategies were put in place to stabilise and reshape the Bank. This led in 2001 to the launch of Grameen II, which is analysed in terms of its main components and its results.

Our opportunity statement should also point towards Grameen Bank’s future role as a major player in the microfinance market, and as an inspiration for those helping poor people improve their own lives.

Grameen bank is owned by the poor

 |  | Grameen Bank Project was born in the village of Jobra, Bangladesh, in 1976. In 1983 it was transformed into a formal bank under a special law passed for its creation. It is owned by the poor borrowers of the bank who are mostly women. It works exclusively for them. Borrowers of Grameen Bank at present own 95 percent of the total equity of the bank. Remaining 5 per cent is owned by the government.| 3.0|  | No Collateral, No Legal Instrument,No Group-Guarantee or Joint Liability |  |  | Grameen Bank does not require any collateral against its micro-loans. Since the bank does not wish to take any borrower to the court of law in case of non-repayment, it does not require the borrowers to sign any legal instrument.| | | 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 repayment problem. There is no form of joint liability, i.e. group members are not responsible to pay on behalf of a defaulting member.| 4.0|  | 97 per cent Women |

 |  | Total number of borrowers is 8.29 million, 97 per cent of them are women. | 5.0|  | Branches|
 |  | Grameen Bank has 2,564 branches. It works in 81,367 villages. Total staff is 22,653| 6.0|  | Over Tk 553 billion Disbursed|
 |  | Total amount of loan disbursed by Grameen Bank, since inception, is Tk 553.78 billion (US $ 9.54 billion). Out of this, Tk 491.78 billion (US $ 8.50 billion) has been repaid. Current amount of outstanding loans stands at TK 62.01 billion ( US $ 893.97 million). During the past 12 months ( from August’09 to July '10 ) Grameen Bank disbursed Tk. 88.50 billion (US $ 1279.04 million). Monthly average loan disbursement over the past 12 month was Tk 7.37 billion (US $ 106.59 million).Projected disbursement for year 2010 is Tk 97.00 billion (US $1403 million), i.e. monthly disbursement of Tk 8.08 billion (US $ 116.92 million). End of the year outstanding loan is projected to be at Tk. 70.00 billion (US $ 1013 million). | 7.0|  | Recovery Rate Over 97 per cent|

 |  | Loan recovery rate is 97.29 per cent.|
8.0|  | 100 per cent Loans Financed From Bank’s Deposits|...
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