In developing countries, it has been very difficult for poor to take loans from Banks without providing any security or guarantee but the Grameen Bank of Bangladesh provides small loans (also known as micro-credit, grameen-credit) to poor people without requiring any collateral.
Grameen Bank or the Bank of Villages (in Bangla Language) was founded by Professor Muhammad Yunus.
He initially launched an action research project to check the possibilities of such credit deliveries to skilled but poor men and women who can’t utilize their talent because of poor financial position.
The purpose was to provide small loans to the poor without any interest and the very first loan was consisting of 27USD from his own packet.
From 1976 to 1979, they implemented this project on demonstration basis in some small villages near Chittagong.
The program was financed by the Central bank of the country and other nationalized commercial Banks.
After succession in these villages, they started to extend the project to other districts, gradually and finally in 1983 this project became an independent bank. 90% of the shares are owned by the borrowers while rest of them are in government’s ownership.
Muhammad Yunus, a Bangladeshi economist is the man behind the idea of Grameen Bank.
He was a Professor in Chittagong University and during a visit to poorest households near the university he found that very small loans could help these people.
He himself contributed 27 USD in first loan that was given to some poor women and his revolutionary idea is now transformed into a complete and independent bank.
Along with many other national and international honors he and his bank received, including a Nobel Peace Prize in 2006.
Now, it’s the visitors from Bangladesh, who can enlighten us more on the structure and work of this bank and how it has brought a positive change in many poor Bangladeshi families.