Grameen Bank of Bangladesh
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Grameen Bank was started in 1976 by a young economics professor, Dr. Muhammad Yunus, when he discovered that poor women could break through poverty by taking tiny loans to start or expand tiny businesses. He launched his concept, microfinance, with the money in his pocket (equivalent to US$26). Today, Grameen Bank serves over five million clients, with 10,000 families escaping poverty every month.Over the last two decades, Grameen Bank has loaned out over 5 billion dollars to the poorest of the poor, while maintaining a repayment rate consistently above 98 percent. 96 percent of its clients are women.
Grameen Foundation sprang from this rich heritage and maintains an enduring relationship with the Grameen Bank of Bangladesh. Based in Washington, DC, we support programs that replicate the Grameen Bank microfinance model around the world.
Muhammad Yunus' story of founding Grameen Bank
Is Grameen Bank Different from Conventional Banks?
By Muhammad Yunus, February 2006
Grameen Bank methodology is almost the reverse of the conventional banking methodology. Conventional banking is based on the principle that the more you have, the more you can get. In other words, if you have little or nothing, you get nothing. As a result, more than half the population of the world is deprived of the financial services of the conventional banks. Conventional banking is based on collateral, Grameen system is collateral-free.Grameen Bank starts with the belief that credit should be accepted as a human right, and builds a system where one who does not possess anything gets the highest priority in getting a loan. Grameen methodology is not based on assessing the material possession of a person, it is based on the potential of a person. Grameen believes that all human beings, including the poorest, are endowed with endless potential.
Conventional banks look at what has already been acquired by a person. Grameen looks at the potential that is waiting to be unleashed in a person.
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