Posted at 01.01.2019
Grameen Lender (GB) is called the bank of the indegent in Bangladesh. It has been founded for the welfare of the poor village folks of Bangladesh, which becomes a job model of the world of micro credit bank operating system. At the origins of Microcredit, Dr. Muhammed Yunus who's an economist educated in america of America, although actually from Bangladesh, unveiled the planet to the idea of micro-credit in the 1970's.
Counts (1996) said that Muhammed Yunus spoken with the indegent village people and discover that standard local standard bank never shows interest to provide loan to the indegent and does not lend them plus they had to borrow money from extortionate moneylenders with high interest levels. Because of this, they finished up more-or-less permanently in debt and hardly any money they made visited pay the eye on these high-interest lending options. Yunus became conscious at that time that the indegent problems were in some ways no different from other people: low interest credit was a necessity of life.
Definition of Micro Credit Auwal (1996):
An extremely small loan directed at impoverished people to help them become one-man shop. Also called "micro financing. " This small lending options extension (microloans) to people in poverty designed to spur entrepreneurship. These lending options especially directed at an unhealthy person to permit him or herself to be one-man shop. Financial services loaned a tiny levels of money usually around $50-$150 to poor people as a capital of a little business to start or increase it. The Grameen Loan provider in Bangladesh has turned into a model of successful micro loan provider.
General funding or credit.
It emphasizes building capacity of the micro-entrepreneur.
Help the micro entrepreneur on during difficult.
Advantage of Microcredit Soeama (2004):
Source and cost of money: "
In order for the Microfinance establishments to loan they need financing too and a well balanced microfinance institution may have a competitive good thing about low priced of money which permits it to provide funding at low priced.
Microfinance companies will need to have a required network and infrastructure to provide these services. The Grameen Lender of Bangladesh creates and implements this composition in rural village area.
MFI's are many times criticized as money squeezing machines which ask for high cost. Which can be definitely not true considering their cost of funds and risks moreover they have to be ecological. So here I think possessing a good name, image and Top management team helps a whole lot. "
Although microcredits are the keystone in conditions of development in poor countries, it can also have its difficult. Indeed, the negatives of microcredits are:
Some microcredit organizations are often unstable.
Budget will depend on subsidises from the federal government or NGOs.
Fig 1: Current Microcredit Network of Grameen Bank
"The founder of Grameen Bank or investment company Muhammad Yunus open up the thought of 'micro-credit'--minuscule loans to the poor. The lender currently lends more than $500 million a year with a repayment rate of better than 97 percent. Its Group Personal savings Funds have belongings of $186 million. Grameen Bank functions 1, 100 branches in half of Bangladesh's nearly 80, 000 villages. This program has been effectively replicated in dozens of countries, like the Philippines, Malaysia, Vietnam, South Africa, and Bolivia. It has also been applied to internal city and rural poverty in abundant nations in THE UNITED STATES and Europe.
The origin of Grameen Bank can be followed back again to 1976 when Teacher Muhammad Yunus, Brain of the Rural Economics Program at the School of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide bank services directed at the rural poor. The Grameen Bank Task (Grameen means "rural" or "village" in Bangla language) came into operation with the next objectives:
Extend bank facilities to poor men and women.
Eliminate the exploitation of the poor by money lenders.
Create opportunities for self-employment for the great multitude of unemployed people in rural Bangladesh.
Bring the disadvantaged, mostly the women from the poorest homeowners, within the fold of any organizational format which they can understand and deal with independently.
Reverse the age-old vicious group of "low income, low keeping & low investment", into virtuous group of "low income, treatment of credit, investment, more money, more savings, more investment, more income".
The action research showed its power in Jobra (a community adjacent to Chittagong University or college) plus some of the neighboring villages during 1976-1979. Using the sponsorship of the central standard bank of the country and support of the nationalized commercial banking institutions, the task was long to Tangail district (an area north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the task was extended to several other districts in the country. In Oct 1983, the Grameen Bank or investment company Project was transformed into an independent bank by government legislation. Today Grameen Lender is possessed by the rural poor whom it provides. Borrowers of the lender own 90% of its shares, while the left over 10% is owned or operated by the federal government. "
Grameen Bank allowed to operate branches in urban areas. Previously they could open up branches only in the rural areas.
Government stake cut down from 25% to 15%. Note that when the lender started, Government acquired a stake of 60%.
Number of Government nominated directors helped bring down to 2 from 3.
Chairman of the bank will be appointed by the panel instead of Federal nomination which been around as yet.
Fig 2: Current structure of Grameen Standard bank.
The Grameen Standard bank believes that the simplest way for members to learn about how exactly the bank works, is through first hands visibility and observations at the field level. Through these activities, participants are encouraged to pull their own conclusions about the potency of Grameen Bank's work and the impact it has on the poorest of the indegent. The targets of GB's training programs are to:
Stimulate interest on the subject of Micro funding.
Encourage responsibility of self-motivated learning.
Learn and tell others.
Discover specific role in the organization and the global community.
The Grameen Bank's Method of action can be illustrated by the following principles:
Start with the condition as opposed to the solution.
Adopt a intensifying attitude.
Make sure the credit system serves the poor, and not vice-versa.
Establish priorities to use it vis-a-vis to the the mark population.
Lean on solidarity groups.
Establish priorities to use it vis-a-vis to the prospective population.
Associate personal savings with credit without it being actually a prerequisite.
Do everything possible to guarantee the system's financial balance.
Invest in recruiting.
There are 16 decisions and 10 indicators in Grameen Loan provider policy to expand it up. These are:
Follow the four concepts of Grameen Loan company- Self-discipline, Unity, Courage and Hard work.
Bring success to the individuals.
Work towards to construct new residences.
Grow fruit and vegetables all the year round.
During the plantation conditions plant as much seedlings as you possibly can.
Plan to keep people small which can only help to minimize expenditures easy to provide for every body's health.
Provide education to the kids and ensure that they can earn to pay for their education.
Keep the environment clean.
Build and use pit-latrines.
Arrange safe drinking water from tubewells and boil normal water or use alum when needed.
Do not take any dowry at our sons' wedding ceremonies, neither shall give any dowry at any ones daughters wedding.
No body inflict any injustice on anyone.
Will do more collectively undertake bigger investment funds for higher incomes.
Always prepare yourself to help one another. If anyone is difficulty, all help her or him.
Come to know of any breach of self-discipline in virtually any centre, go there and help rebuild discipline.
Take part in every social activities collectively. "
Grameen Bank will staff evaluation of their work yearly and check if the socio-economic situation of GB people is increasing. GB evaluates poverty level of the borrowers using ten indicators.
A member is known as to have moved out of poverty if her family fulfils the next criteria:
The family lives in a house worth at least Tk. 25, 000 (twenty five thousand) or a house with a tin rooftop, and each member of the family can sleep on foundation instead of on to the floor.
Family people drink clear water of tube-wells, boiled normal water or drinking water purified by using alum, arsenic-free, purifying tablets or pitcher filtration systems.
All children in the family over six years of age are all heading to institution or finished principal school.
Minimum weekly loan instalment of the debtor is Tk. 200 or more.
Family uses sanitary latrine.
Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweatshirts, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.
Family has sources of additional income, such as veg garden, fruit-bearing trees and shrubs, etc, in order that they have the ability to fall back on these sources of income when they want additional money.
The borrower keeps an average twelve-monthly balance of Tk. 5, 000 in her cost savings accounts.
Family experiences no difficulty in having three square wholesome meals a day over summer and winter, i. e. no member of the family goes hungry any time of the entire year.
Family can manage the health. If any member of the family comes ill, family are able to have all necessary steps to seek adequate professional medical.
There Wahid (1999) a wide range of factors that are affecting the task process and decision making of GB. Tax changes, new laws, trade barriers, demographic change and government policy changes are all illustrations. To analyse these factors we can categorise them utilizing the PESTEL examination. This classification distinguishes between:
The politics condition of Bangladesh is not stable. The contrary part of authorities never helps their authorities properly to the welfare of the united states. Because of this work strike is going on, which impact the working progress of GB.
Bangladesh is a growing country. Most of the villagers are considering as poor. Lone interest rate, taxes, unemployment, inflation has impact to any business. In essence unemployment and low national income are the key problem, that why GB seeking to motivate people to become one-man shop. Though Bangladesh is a poor monetary country grameen loan company faced this problems to move forward their trip.
In Bangladesh people's average time is 60 years. A lot of populations of the united states are aged and have no activity in the economy. Grameen Bank also dealing with the working attitude to change it that people will get interest in different job activities.
'Grameen Cellphone' is another sister company of Grameen standard bank in Bangladesh. Muhammed Yunus bring the technology to the poor village people and give them an opportunity of mobile business by doing cheap rate cellular phone call all around the globe.
Different environmental issues like global worming have matter in Bangladesh. Grameen standard bank motivate people to concern about it as well as the human health by giving the simple way to make sanitary latrines, natural normal water which is arsenic free.
In their different development program Grameen Lender coach people about their rights and law, that folks can get more knowledge about their and others rights.
Village people are the key resource.
Trust between standard bank and customer.
Loan with low interest for the indegent.
Loan go back is difficult sometime.
Can't give big amount of loan to the indegent people.
Sometime face the staff unhappiness.
Grameen bank a job model for the world. So this loan company could expand all over the world.
More job field can be created outside and inside of the united states.
Environmental risks. e. g. cyclone.
Grameen Bank is not only for Bangladesh but also a role model for other organisations all over the world. The community poor life style already has been changed by the various activities of this loan provider. In Bangladesh it's been success in funding and individuals health areas. Australia, USA plus some African country want to follow the Grameen loan provider.