Report on Exposure Visit to Grameen Bank, Bangladesh 9 – 13 August 2009 Azlee Ashraf Bin Ruslee

Grameen Bank at a Glance

Grameen Bank is a bank that provides small loans called micro-credit for

the poor, without collateral or guarantor, to improve their lives. In 1970’s

and 1980’s when pilot project of the bank started to operate, this concept

was totally absurd. Conventional banks would never lend out money to

the poor because they had no collateral. Only the rich could borrow.

Professor Muhammad Yunus who realized this unjust rule of the

financial system has put his efforts to structure his credit program

through Grameen projects starting from 1976 until the transformation of it into a formal bank in

1983 under a special law passed for its creation. Prof. Yunus and Grameen Bank were jointly

awarded the Nobel Peace Prize in 2006.

In Bangladesh, before the establishment of Grameen Bank, the poor had absolutely no chance of

improving their economic base. The lucky ones had to make bamboo stools for the middleman and

were paid 2 cents a day. They were creative and hardworking but could never improve their lives

because no opportunities given. The others begged for a living.

Through the Grameen system, one member of a poor family, especially woman, is qualified to

apply for loans. Borrowers have to form a group of five to nine members and apply loans in the

group. Group membership not only creates support and protection but also smoothes out the erratic

behavior patterns of individual members, making each borrower more reliable in the process. All the

members of a group have to undergo training on the bank’s policies and demonstrate their

understanding of those policies in an oral examination. Grameen Bank has established 16 decisions

that the borrowers have to make before they get the money. The 16 decisions are:

1. We shall follow and advance the four principles of Grameen Bank --- Discipline, Unity, Courage

and Hard work – in all walks of our lives.

2. Prosperity we shall bring to our families.

3. We shall not live in dilapidated houses. We shall repair our houses and work towards

constructing new houses at the earliest.

4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.

5. During the plantation seasons, we shall plant as many seedlings as possible.

6. We shall plan to keep our families small. We shall minimize our expenditures. We shall look

after our health.

7. We shall educate our children and ensure that they can earn to pay for their education.

8. We shall always keep our children and the environment clean.

9. We shall build and use pit-latrines.

10. We shall drink water from tube wells. If it is not available, we shall boil water or use alum.

11. We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our

daughter’s wedding. We shall keep our centre free from the curse of dowry. We shall not practice

child marriage.

12. We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.

13. We shall collectively undertake bigger investments for higher incomes.

14. We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or

her.

15. If we come to know of any breach of discipline in any centre, we shall all go there and help

restore discipline.

16. We shall take part in all social activities collectively.

Source: Grameen Bank at a Glance, Grameen Bank Publication

These are some of the most-well thought out issues could ever be brought out. Once approved, a

borrower has to start the repayment one week later and installments are paid weekly.

Lending money to the poor may be frightening to some people because the society has the

skeptical thinking that people are poor because they are lazy or stupid. However, the Grameen story

has proven that the society is wrong. The loan recovery rate of Grameen Bank is 98 percent. Almost

all the poor paid back their loan with interest just in time. They even apply for bigger loans for their

business expand.

The replication of the Grameen microcredit methodology started in 1987, when Professor David

Gibbons along with his close associate Professor Sukor Kassim from Universiti Sains Malaysia

launched Amanah Ikhtiar Malaysia after visiting Grameen Bank in Bangladesh for several weeks.

Since then, there were replication projects in South East Asia, Latin America, Africa, and even in

rich countries like the United States and European countries. With this success of the Grameen

methodology, Prof. Yunus aims to create a poverty-free world by 2060.

According to Prof. Yunus, the poor are poor not because they are untrained or illiterate but

because they cannot retain the returns of their labor. They are poor because the financial institutions

do not help them widen their economic base. They have no control over capital, and it is the ability

to control capital that gives people the power to rise out of poverty. Every year, Grameen Bank staff

evaluate whether the socio-economic situation of the borrowers is improving. A borrower is

considered to have moved out of poverty if her family fulfills the following criteria (called the 10

indicators):

1. The family lives in a house worth at least Tk. 25,000 (approx. JPY 33000, RM 1300) or a house

with a tin roof, and each member of the family is able to sleep on bed instead of on the floor.

2. Family members drink pure water of tube-wells, boiled water or water purified by using alum,

arsenic-free, purifying tablets or pitcher filters.

3. All children in the family over six years of age are all going to school or finished primary

school.

4. Minimum weekly loan installment of the borrower is Tk. 200 (approx. JPY 270, RM 10) or

more.

5. Family uses sanitary latrine.

6. Family members have adequate clothing for everyday use, warm clothing for winter, such as

shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.

7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so

that they are able to fall back on these sources of income when they need additional money.

8. The borrower maintains an average annual balance of Tk. 5,000 (approx. JPY 6700, RM 250) in

her savings accounts.

9. Family experiences no difficulty in having three square meals a day throughout the year, i. e. no

member of the family goes hungry any time of the year.

10. Family can take care of the health. If any member of the family falls ill, family can afford to take

all necessary steps to seek adequate healthcare.

Source: Grameen Bank at a Glance

Grameen is not a mere bank. It is an amazingly big corporate group. Besides the bank, there are

Grameen Phone, the leading telecommunications service provider in Bangladesh with more than 20

million subscribers, Grameen Cybernet Ltd. a profitable internet service provider, Grameen

Commucations, a nonprofit Internet service provider, Grameen Education (Grameen Shikkha) that

promotes mass education in rural areas, Grameen Energy (Grameen Shakti), a company dedicated to

developing forms of renewable energy such as solar energy, Grameen Knitwear Ltd. which exports

quality fabrics and garments to the world, Grameen Solutions, a company that offers business and

management consulting, Grameen Fund which provides finance to ventures, Grameen Telecom

which provides telephone to the rural areas and many more going in the list. Grameen Bank is not a

charity organization, it dreams about a welfare-free world. It is a for-profit private sector in this

capitalist world. But unlike other profit maximizers, it runs its business with social consciousness –

to maximize its profit for its shareholders; whom are the poor, to bring education and technology to

the rural areas, and to provide access to capital to the poor. It is a role model for any socially

conscious person to run their business in a way that will help achieve social objectives.

My visit to Grameen Bank in Bangladesh was to see the real poverty issues and to meet with the

successful borrowers yet entrepreneurs who have proven that poverty can be alleviated if the poor

are given the fair opportunity along with the rich. Besides, I would like to have the exposure of the

Grameen concept of social-consciousness-driven private sector, which I dream to establish one in the

future.

A Day at the Grameen Bank Headquarters

I arrived at Dhaka’s Zia International Airport with my colleague, Hayashi Kanako on Sunday, 9th

August 2009. My visit starts on the next day with Mr. Md. Bapor Ali, an officer at the International

Department of Grameen Bank as our coordinator. The headquarters is an impressive building,

located at Mirpur district of Dhaka. After the briefing of Grameen Bank by the General Manager, Ms.

Nurjahan Begum, we visited the archive which exhibits awards, medals, and certificates from all

over the world that Grameen Bank and Prof. Yunus received. This convinced me that the efforts of

the bank have been recognized world wide. Along with Kanako and I were three visitors from Korea

– Hye Yong Son, Ga Ram and Yun Jin, and Johannes, an internship participant from Germany.

I was told in the morning that it was impossible to meet Prof. Yunus because he is departing to

the United States to receive the Presidential Medal of Freedom awarded by President Barack Obama.

However, we were lucky enough because the professor agreed to have a short photography session

with us before his departure in the evening. We did not talk much in such limited time, but it was an

unforgettable moment to get the opportunity to meet an inspiring man like him.

Field Visit to Sonargaon

On 11th and 12th August 2009, Kanako and I, with Mr. Bapor and Abdullah al-Fuad, our

interpreter, took a taxi heading to Sonargaon, a sub-district of Narayanganj located in the

southeastern part of greater Dhaka. It is around 30 to 40 kilometers from Mirpur, but the journey

took around three hours because of the congested

roads along the way. The Central Manager, Mr.

Musaddiq Hossein and the messenger, Mujibur

Rahman were waiting for us when we arrived at

Shadipur Branch of Grameen Bank.

It was difficult for a first time visitor to

recognize the building as a bank, because there were

no ATM machines, no counters, no computers, and

no air-conditioning – which are typical features of a bank. On the first floor, there were only single

desks for each staffs, a table for meeting, ceiling fans and bundles of documents. While on the

second floor, there were rooms for bachelor staffs and visitors, and a dining table. The building was

simple, but what impressed me was the dedication of the staffs. In the morning, none of them stayed

in the building, except the cook lady who provided meals for them. The staffs were responsible to

attend central meetings and collect the loan repayments and deposits from borrowers. They also had

to visit borrowers at home to keep track of them. In the afternoon, they worked on the disbursements

of new loans from the fund collected in the morning. Borrowers came to the branch to receive money.

The staffs worked until 10.00 pm on the day I came. The office was quiet because everybody

concentrated to their accounts and ledgers. I was really inspired by their dedication to work for the

poor.

A central meeting is where four to five groups of

borrowers meet each other once a week to discuss about their

progress and to make loan repayments. One branch office is

responsible to 60 to 90 centers. We were managed to attend

two central meeting during our visit. In the central post, the

borrowers were seated in rows, organized according to group.

In the first meeting, I was seated in front, facing the borrowers and was asked to communicate with

them asking any question. I asked several questions, but still I was not comfortable being like a VIP

in front of them. In the second meeting I attended, I requested to sit at the end of the line with them.

This time, I felt better. We talked and joked to each other. The women were polite and shy. However,

when we started talking and knowing each other, they became friendly and talkative. Mr. Bapor said

that the situation has improved from ten or twenty years ago where women in Bangladesh villages

were too afraid to talk to strangers and men other than their close relatives while others would hide

their faces behind veils while doing so.

My request to meet successful entrepreneurs of Grameen was fulfilled when I was given the

opportunity to visit Ms. Musammat Amela Khatun’s, Ms. Moni Rani’s, and Ms. Monoara Begum’s

homes and factories. Ms. Amela has two sons and two daughters. 22 years ago, her family was very

poor, but with the loan from Grameen Bank, they afforded to buy dairy cows and sell 4.5 liters milk

the cows produce everyday. With her savings and additional loan from the bank, Ms. Amela now

owns two minibuses for transporting village children to school. We had a nice chat with Ms. Amela

and her eldest son that evening. They also offered us tea and delicious castella which I cannot forget

the taste until now.

Muslims and Hindus live in peace and harmony

in the village. Except tika on Hindu women’s

foreheads and small temples in their houses, it is

difficult to distinguish a Hindu from a Muslim. Most

of them wear saris and speak the same language. Ms.

Moni Rani and her family are Hindus. She borrowed

from Grameen and runs her ornament business. Her

husband made beautiful ornaments from shells which

they bought from Sri Lanka. They sell their products

to Dhaka and India and made profits from them. Now I believe that the poor can become very

creative and productive provided that opportunity is given by the society. No training program is

needed. In fact, Grameen Bank offers little, if any,

training program. The bank believes that all human

beings have an innate skill. What the poor need is just

access to credit that allows them to immediately put

into practice the skills they have already known.

Another success story is Ms. Monoara Begum’s

jamdani weaving factory. Jamdani is a fabric of fine

cotton muslin of Bengali origin, with colored stripes

and patterns. Her factory is small with less than 10

workers, but the jamdanis she produces are gorgeous and highly reputed. A piece of jamdani she

produces can cost up to 10000 taka (more than 10000 yen). Due to the high quality and price, her

products are not sellable in Bangladesh because only rich women afford to buy them. They are

exported to India through middleman. I asked them if

they wanted to expand their business to new markets

like Malaysia, and they said they wanted to do even

more than that, including building a bigger factory and

manufacturing more jamdanis. However, the only

problem they have is they do not have access to the

larger markets and they cannot afford to build a bigger

factory. Hiring more workers will never be a problem

to them. Their high ambition has opened my eyes to

the power of human capital in Bangladesh. The small country with a big population, where the

people are diligent and hardworking, can bring prosperity to world if the future is planned

deliberately.

I also visited some other houses where I was invited spontaneously like Ms. Kanchan Rani Das’

and her friends’ houses. On every visit, we were offered cakes, biscuits, traditional foods, and

crackers. I was deeply touched by the warm welcome, though I just met them on that same day.

Besides income-generating loans, Grameen Bank also provides education loans and struggling

members’ loans. A borrower’s child who succeed in reaching institutions of higher education are

given loans covering tuition, living costs, and other school expenses. I met Asma Akter, 19, a

brilliant student who is studying accounting at a local college. She aspires to becoming a certified

accountant one day. I believe with her continuous effort to learn, she deserves to succeed. I also met

a struggling member loan’s borrower. Struggling member loans are for beggars to help them find a

dignified livelihood. The loans are interest-free, can be for a very long term to make repayment

installments very small. The struggling member I met used her loan as capital to ply cracker chips,

sweets, chocolates, and eggs from door to door across the village. Although she was still poor after

three years getting loans from Grameen Bank, she never had to beg ever since. I asked her if she

ever wanted to own her own shop. “Of course, if the bank gives me more money”, she said half

kidding. I was shocked to hear that she has never leaved the village, even to Dhaka City in her entire

life. “I am afraid to go to Dhaka”, she said. She could not read Bengali nor alphabet. We ended the

meeting by buying some sweets and chips from her on Fuad’s treat.

Thank you to Abdullah al-Fuad for his

interpretation, as without him, I would always be in the

dark in the village because of the language barrier.

Through him, I could even make jokes with the

villagers. Fuad is a university graduate who is

currently working with Institute of Cultural Affairs, an

NGO based in Dhaka. It was good to know that he is at

the same age with me, as this made my field visit very

comfortable, just like a personal visit with a close friend. I also made friend with Mujibur Rahman,

the messenger of the branch office who provided us breakfast, lunch, and dinner. Along with Fuad,

the three of us went to the mosque together that night to recite Quran and perform our prayers.

Also, my gratitude to Mr. Musyfiqur Rahman, the Branch Manager, Mr. Musaddiq Hossein,

the Central Manager, and all staffs of Shadipur Sonargaon Branch of Grameen Bank for their kind

assistance during my stay in Shadipur. It was because of them that my trip to the village was

amazingly memorable.

My Bangladesh Visit in General

This is my first visit to a South Asian country. I have got the idea to visit Grameen Bank in

Bangladesh from an inspiring friend of mine, Lee Chyi who told me that she contacted Grameen

herself to do a summer internship. She made it in summer 2007. When I told Mr. Ratan K. Nag, the

Deputy General Manager of International Department about her, he said that he still could remember

her.

Bangladesh has half the area of Malaysia or Japan, but it has over 160 million people, almost 6

times more populated than Malaysia. Everyone I met shared the common view that the country is

overpopulated. I experienced power outage everyday during my stay. It is said that the electrical

power failure is because of the big population, where the power supply of the country is not enough

to feed the big energy demand throughout the country. Thus, every hotel and factory has to have its

own electric generator to supply electricity during shortage. Mirpur, the place I stayed where

Grameen Bank headquarters is located, is a city of darkness at night. No street lamp was employed.

The only sources of light were the hawkers’ kerosene lamps and shops’ florescent lamps.

Dhaka city was congested with buses, cars, auto rickshaws, bicycle rickshaws, motorcycles,

bicycles, pedestrians, hawkers, and even cows. It might take an hour to crawl several inches by taxi.

It was hard to predict your arrival time when you travel across the city. Honking was constant on

every street, either to fend off an encroaching driver or bicycle rickshaw, or to warn pedestrians

walking out in the traffic lanes that you are about to run them over if they do not move aside.

Nobody seemed to care to stop their vehicles during red lights. The city was awash with dust,

pollution and noise. Roads and buildings are badly

constructed. I was amazed that they can go about their

daily lives in such condition.

Street children and beggars were a tough call for me.

During my auto rickshaw ride from the airport to the

city with Kanako, there was a man with burnt neck

with his wife and poor starving children begging for

money. I felt sorry for them, but I did not give them a

cent. Also, in front of the hotel I stayed, there were a group of street children with their mothers.

From the first day I arrived, they would run towards me every time I went in and out of the hotel

front door. I ignored them at first. I had a prejudice against them, that they might be exploited in the

money begging syndicate like in the movie Slumdog Millionaire. However, Anne Roudaut, an

internship student at Grameen from France had taught me another point of view. One night, after we

finished having a dinner, another student from Germany discussed with her that giving something to

the children will never solve the poverty. She then replied spontaneously, “at least they eat”. My god,

then only I realized that they are only little children, they need food, they need shelter, they need

education, and they need love, just like any other kids in wealthier countries. Although I would never

hand out any amount of money which I believe it will never improve their living, I cared to spend

more time with them. One of them named Rubel was amazingly smart and articulate at the age

around 7, but what a waste that he could not even attend school. I felt a deep sympathy for him. Can

we really put poverty into museums?

Bangladesh people were truly amazing. I have never seen so many people condensed together in

a very tiny area. Sometimes large crowds would form around me just to watch me for several

minutes. They were just genuinely interested in foreigners. They were curious and they asked so

many questions. Every conversation would start with “your country please?” Youngsters along the

street who saw my camera would say “hello, picture please!” which made me took their portrait

photos. They would be excited and just go away when I showed them their picture through the

screen. The people were extraordinarily hospitable and friendly. Everywhere I went, there was

always someone to talk to. People in a barber shop I visited offered me their seat while they would

rather stand up. In a restaurant, I did not have to pay for tea just because I sat beside someone who

was utterly enthralled to have a conversation with me. Really, it was an excellent opportunity for an

authentic cultural experience that I might never get in Japan or Malaysia.

Acknowledgements

Thank you especially to Mr. Bapor Ali who has made my visit happened, Ms. Nurjahan Begum

for her approval of my visit, Mr. Ratan K. Nag for his wise and friendly advice, staffs of

International Department, Abdullah al-Fuad for his interpretation, Mr. Musyfiqur Rahman, Mr.

Musaddiq Hossein, Mujibur Rahman, members of Grameen in Shadipur that I met, Hayashi Kanako

for her company, Alois Hotter, Anne Roudaut, Johannes Vogel, Hae Yong, Ga Ram and Yun Jin, Mr.

Sayyidur for his ride, and to my family because of their prayers of my safety during this trip.

I would also like to express my gratitude to Professor Muhammad Yunus for his effort to fight

against poverty since 1970’s. It is my hope to see that his vision to build a poverty-free world will

turn into reality in the near future.

Note: I am currently working as a Marine Mechanical Designer at MacGREGOR Group. I can be reached at

azlee_ashraf@yahoo.com