Topic: GRAMEEN BANK
Muhammad Yunus is often referred to as “The world’s banker to the poor“. He was awarded the Nobel Peace Prize Winner for year 2006. He is the Founder and Director of Grameen Bank, is a founding and current board member of Grameen Foundation. His life’s work has been to prove that the poor are credit-worthy. His Grameen Bank system has provided financial assistance to as many as 7 million poor people and has continued its reputation in doing so. The major beneficiaries of the system were Women. This Banking system is mostly concentrated in Bangladesh one of the poor nations of the world.
The idea of Grameen Banking system was first visualized by Muhammad Yunus in year 1976 while he was a Professor of Economics at Chittagong University. “Micro-Finance” was the key-driving point for this Banking System. He was the key conceptualizer of the “Micro-Finance” system and perfect Implementer. Even the poorest of the poor can get loans from this banking system even in the absence of the collateral to gurantee the loan. The main thrust of this Banking Systme is to eradicate poverty and improve the Standards of Living.
The important characteristics of this Business Model are firstly the high recovery rate of up to about 99%, secondly provision of loans even in the absence of collaterals but under the guarantee of group thirdly the requirement of the borrowers to save a part of income to help them from getting under the clutches of poverty and Money Lenders and finally the scaling of bank to the rural level which is a big hurdle to a typical urban-oriented bank
The success of the Grameen Banking System can be assessed by the number of branches which it has grown which is about 1000 and the number of borrowers which comes to about 6.5 million borrowers. This micro-credit Business Model is being followed in as many as 100 countries including the developed and the developing Economies. Due to the success atttributed by Leading Economists in the world to the micro-credit system, the leading developed countries have also adopted this concept.
According to Muhammad Yunus firstly Social Entrepreneurship happens to be key for eradicating poverty and providing Economic Development where in both the Entrepreneur and the society are benefitted, secondly Capitalism should be projected in a manner where in economic, social, Political dimensions are embodied in it, creation of Social Stock Market happens to be important feature for increasing the network among the Social Entrepreneurs of the world.
