Case Study on Grameenphone

Topics: Muhammad Yunus, Grameen Bank, Microcredit Pages: 10 (2699 words) Published: February 4, 2013
A case-study on GrameenPhone
Ramkhamhaeng University
Institute of International Studies
Master of Business Administration
Subject: Management of Change and Development

Submitted By:
Pronoy Chakma(Noy)
Institute of International Studies
MBA (2012-2013)

Submitted to:
Prof. Dr. Maurice Yolles

A case-study on GrameenPhone By: Pronoy Chakma (Noy)

Bangladeshi-native Muhammad Yunus developed the concepts of micro-financing and micro-credit when he was Professor of Economics at Chittagong University. After visiting some poor neighborhoods and villages near Chittagong, he realized that very small loans to the poor people could make a very big difference to their work and to their lives. In 1976 he set up his own research project to lend small amounts of his own money to the poor people, particularly the women. The project was successful, and in the same year he secured small loans from the government bank to proceed with the project, which continued to succeed and grow. In 1983 the project had expanded into a large business, and was renamed Grameen Bank. From 1983 to 1989 Grameen continued to grow and expand, until Dr. Yunus realized the need to diversify; several subsidiary enterprises, including GrameenPhone, were created within the Grameen organization. All of these enterprises were structured on the same social business model and operated on the same principle of micro-financing. The majority of these enterprises focused on women, because Dr. Yunus believes that women suffer more disproportionately from poverty than men, and women are more likely to use their earnings to help their families and communities. The Grameen model of micro-financing has proved successful in many countries, particularly developing nations. Dr. Yunus has won many awards and honors for his work, including the 2006 Nobel Peace Prize, which he was awarded jointly with Grameen Bank. In 2006-2007, Dr. Yunus considered entering politics on a platform to help the poor, as well as to campaign for honest and clean government. This caused problems for him and created rivalry and hostility from other politicians who had previously supported his efforts. Accusations began against him for mismanagement of Grameen's finances. Despite all the previous good work through Grameen, Dr. Yunus now has many opponents, mostly political, in Bangladesh, but at the same time the support of many international leaders from around the world. In 2011, Dr. Yunus was dismissed as Managing Director of Grameen Bank by the government, as it investigated allegations of "misused and misappropriated" funds of the bank. This affair is still ongoing and unresolved. Introduction

Iqbal Quadir, a Bangladeshi-born naturalized US citizen, is the founder of Legatum Center for Development and Entrepreneurship at MIT (the Massachusetts Institute of Technology). In 1993, he began to develop an idea to provide universal mobile phone service throughout Bangladesh, and in particular for the rural poor. He had been impressed by Dr. Yunus's success with Grameen Bank and the micro-financing and social business models on which it was structured. So he traveled to Bangladesh to meet with Dr. Yunus to explore how they might together develop this idea as a working venture. Together they negotiated a partner-union with Telenor, the telephone company of Norway, and in 1996 the new company GrameenPhone Ltd. was granted its operating license and the following year launched its service. Service was expanded over the next four years, and by 2000 the network covered the entire country. The business model for GrameenPhone was based on combining the fact that most people in Bangladesh could not afford their own cell phone, and the idea that a cell phone could serve as a source of income. It also depended on the Grameen Phone Ladies. The Grameen...
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