Business Model of Grameen Bank

Four dollars was the amount. Yunus found 41 other villagers in Jobra and lent them a total of $27. Khatun's income immediately jumped from $0. 02 per day to $2. 00 per day Yunus simply told those borrowers to pay him back when they could, and was a little surprised to find that all of them repaid him In full. So, he began lending more money with the same result. He petitioned local banks to start making similar loans, an idea they rejected. When he asked them their reasoning, they replied that the poor are not credit worthy.

Yunus replied, "How can you say that they are not credit worthy. I give them money, and they pay me back. " It was at that time that I decided to become a sponsor for all loans, the total being close to 10. 000 taka (around $300 LJSD)", said M. yunus. to find that all of them repaid him In full Yunus tried to convince the banks to adopt his methods and begin employing them in providing loans to the rural poor, but the bankers were skeptical that Yunus' successes could be repeated in other communities regions for Grameen Project to develop.

It was obvious that Yunus could not be in all five istricts at once, so this ought to reduce their final concern over the viability of the lending model. He even persuaded the banks to have their own staff manage the lending process so that the banks could not say that their employees could not successfully accomplish that which Grameen was successful in doing. As Yunus suspected, the experiment was successful in all five districts, but the banks were still unmoved in their decision. At that point, Yunus became discouraged.

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The success of the operation resides mainly in this concept of groups; it keeps members united to achieve the goals, encourages teams to ompete and favours an environment of mutual support. "A candidate for a loan has to form a group of 5 persons, and the membersof that group should have similar social and economic status and cannot be family. After the recognition of the group, the members should attend weekly meetings for approximately one month. Usually the first loan of 12 to 15 USD is only given to two of the women in the group. If in a period of six weeks, both regularly repay the money, we In 1989 the Grameen Trust was created.

It is a foundation responsible for the replication f the Grameen model across the world It allows participants to obtain a deep knowledge of the functioning, philosophy and methods of Grameen and provides them with the knowledge of particular problems. ". As a general rule, the programme should focus on the poorest 25% of the population, as well as consider women At present more than 100 countries, developed and underdeveloped, have programmes inspired by Grameen CONCLUSIONS Grameen Bank has inspired microfinance movements in many other countries and its model has been replicated across the globe

Grameen Bank was successful in improving the financial position and standard of living of the rural poor Grameen Banks sixteen decisions improved the social status of women in Bangladesh Grameen Bank ushered in a new revolution of microfinance worldwide, providing a ray of hope to millions of poverty-stricken people all over the world, and particularly in the developing countries "My message is always the same, poverty can be eliminated. Credit is not only an instrument for profits; it is a powerful weapon for social change, a way to give new life to people. "

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