Creator of service himself has a personal experience and feel of being with the customers. Muhammad Yunus himself being a resident of the Jobra village knew exactly the problem that the community was facing and hence he could very well cater to the needs of the destitute by providing them tailor-made lending services which can maintain a balance between their earnings and repayment rates.
The biggest strength of Grameen Bank lies in bringing financial services to poor people and making it financial sustainable by the economies of scale effect. Some of the other advantages are that the bank offers tailor-made services to the poor people. Also, the costumers are called members so they have the feelings of “belongingness”. Moreover, Grameen Bank focuses on area which is largely untapped and has huge potential.
Grameen banks not only provides credit to its borrowers but also helps them grow their small business and helps them learn the basic principles of healthy living and grows alongwith the customers. This helps in the creation of loyal customers to the bank. Weakness:
Grameen Bank suffers from various weaknesses.
Peer-Pressure : Because of the group-lending strategy which demands that all the members of the group should repay the loan or else none of them will be given the loan the next time, has created a lot of domestic pressure amongst the destitute families. There has been many cases wherein violence has crept amongst many families for the reason of one family not being able to repay the loan. Also because of the peer-pressure many families try to repay the loan by borrowing the money from the “paikars” the local money-lenders who would charge them double the rates (10% a week). This at times defeats the complete purpose of Grameen Bank of getting the destitute out of the vicious cycle of the credit from local money-lenders.
Actual Users of the loan : Many a times the loans didn’t use to reach to the...
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