The Grameen Bank project was born in Jobra, a small village in Bangladesh in 1976. In 1983 it became a formal bank thanks to a special act approved in the country for its creation. Its name “Grameen” means “the bank of the poor” in Bengali. It was created by Muhammad Yunus, who in 2006 was awarded the Noble Peace Prize.
It is owned by people with few economic resources who request loans from the bank, most of which are women. The borrowers of Grameen Bank own over 90% of its capital. The main role of the bank is to provide micro-credits: groups of five people receive a loan with very few requirements, but the entire group will not be eligible for further loans if one of its members is unable to cancel it. This leads to economic incentives since the group acts responsibly and converts the bank into a viable model.
In relation to this, the statistics of cancelled loans is surprisingly high: 98.85% of loans are cancelled with a credit turnover of around 4.5 billion Euros (figures from 2006).
One of the main successes of the Grameen Bank is its ability to reach rural areas and small villages. In 2006, from the 84,000 villages spread around Bangladesh, around 75,000 were receiving services from the Grameen Bank, which has 2,000 branches and some 20,000 staff.
For further information visit www.grameen.com