report on grameen bank in bangladesh
DESCRIPTION
Grameen Bank Project was born in the village of Jobra, Bangladesh, in 1976. In 1983 it was transformed into a formal bank under a special law passed for its creation. It is owned by the poor borrowers of the bank who are mostly women. It works exclusively for them. Borrowers of Grameen Bank at present own 94 per cent of the total equity of the bank. Remaining 6 percent is owned by the government.TRANSCRIPT
Grameen Bank in Bangladesh
LETTER OF TRANSMITTAL
Date…..
‘Mr. ………..
Lecturer,
Department of Management Studies,
Subject: Solicitation for Acceptance of the Term Paper.
Dear Sir,
We are very much pleased to submit the Term paper on ‘Industrial
Psychology’MGT-107. All the works presented here is done with utmost
sincerely and honesty. We have tried our level best to make this report holistic
and informative enough.
Working with such an interesting assignment has given us the opportunity to
achieve Knowledge and experience on Grameen Bank in Bangladesh
. We are always available for any further quarries regarding this Term paper.
Yours truly,
………………………………
ACKNOWLEDGEMENTACKNOWLEDGEMENT
We acknowledge our heartiest due to our honorable course instructor
‘Mr. ……………….. Lecturer, Department of Management Studies, University of
Dhaka for giving us the opportunity to carry out this term paper. His valuable
advice and guideline helped us a lot in preparing this term paper successfully.
Otherwise the task of preparing this term paper would have been harder in our
part. Our academic career has profited greatly by doing this assignment...
At first we would like to remember the almighty Allah for blessing us with the
strength, ability and patience to do this task.
During the period of preparing the term paper on ‘Grameen bank in Bangladesh’
we had gained altruistic assistance from number of persons. If I do not mention
their name, this letter of acknowledgement would not be complete .We are
thankful to them.
On the list first comes Ahtesham Uddin Ahmed, Principle officer of International
Department of Grameen bank... He tried with his level best to solve the problems
regarding the doing report.
Then number of senior brother & sister really worked hard there and spent their
valuable time to provide us plenty of information .I am thankful to them for
showing their highest degree of temperament.
In fact, it is very hard to articulate how much cordially we were received and what
a cordial care and favor. We were so drenched with their affability and hospitality
that can't express in words and we felt cent percent abode/homely in every
minute we spent there.
Executive SummaryExecutive Summary
Grameen Bank (GB) has reversed conventional banking practice by removing
the need for collateral and created a banking system based on mutual trust,
accountability, participation and creativity. GB provides credit to the poorest of
the poor in rural Bangladesh,
This Project was born in the village of Jobra, Bangladesh, in 1976. In 1983 it was
transformed into a formal bank under a special law passed for its creation.
And the founder of the bank Professor Dr. Muhammad Yunus has been
rewarded with the ‘Nobel Peace Prize’ in 2006 for this great contribution. He do
so because his approach to banking reinforces the new liberal view that
individual behavior is the source of poverty and the new liberal agenda of
restricting state aid to the most vulnerable when and where the need for
government assistance is most acute.
The main activity of Grameen bank is to provide the microcredit loan to the
poor members. It gives some facilities in giving loan (Such as No Collateral,
No Legal Instrument, No Group-Guarantee or Joint Liability is needed, Low
Interest Rates, , Pension Fund for Borrowers etc).
In other side it also provides many facilities for them in giving (Housing for
the Poor, Scholarship for the students, Micro savings for the Members, Micro
insurance Facilities) etc.
Today Grameen Bank gives loans to nearly 7.0 million poor peoples, 98% of
whom are women, in 73000 villagers in Bangladesh.
Table of Content
Chapter One Page
Introduction. …………………………………1
Objectives of the Study…………………….. 2
Field of the study………………………………2
Sources of data collection…………………….3
Research Methodology………………………4
Limitations of the Study…………………….5
Chapter- Two
Overview of Grameen bank in Bangladesh…..6
History of Grameen Bank…………………….6
Why Grameen Bank…………………………..7
Programs and characteristics of GB…………7
Method of Action…………………………….. 21
Credit Delivery system………………………..22
Breaking the Various through Microcredit…. 26
Contribution in GDP………………………….. 28
Performance Indicators & Ratio Analysis….. 28
Monthly Updates………………………………28
The 16 decisions……………………………... 29
Grievances Research and Analysis…………34
Conclusions or Recommendations………….36
Chapter- Three Appended Part……………………………38Bibliography……………………………………38Appendix………………………………………. 41
Grameen Bank (GB) has reversed conventional banking practice by
removing the need for collateral and created a banking system based on mutual
trust, accountability, participation and creativity. GB provides credit to the poorest
of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost
effective weapon to fight poverty and it serves as a catalyst in the over all
development of socio-economic conditions of the poor who have been kept
outside the banking orbit on the ground that they are poor and hence not
bankable. Professor Muhammad Yunus, the founder of "Grameen Bank" and its
Managing Director, reasoned that if financial resources can be made available to
the poor people on terms and conditions that are appropriate and reasonable,
"these millions of small people with their millions of small pursuits can add up to
create the biggest development wonder."
The primary purpose of the term paper is to partially fulfill the requirements
for Industrial psychology course and develop the knowledge and learn
the formal procedures of successful term paper. However, in preparing our
term paper, we have looked for the following objectives:
(a) Conducted a comprehensive literature search relating to the area of
investigation.
(b) Synthesized and analyzed the evidence from the literature search and
identified an appropriate approach to the problem specified.
(C) Demonstrated practical and professional skills in the development of business
solution.
(d) Documented the system to professional standards.
(e) Perform an in-depth critical review of the work undertaken.
(f) Made an effective contribution within the Industrial environment.
(g) Communicated effectively with colleagues.
To measure the positions both in Bangladesh and internationally; we have
chosen a case study on Grameen Bank as a topic of our study.
The subject matter of this report is based on primary and secondary sources of
data and information:
A. Primary Sources:
Direct interview & Conversation.
Expert opinion
Official records
Practical work experience.
Different files and documents study.
Group Discussion
B. Secondary Sources:
Relevant papers and publications
Different Loan strategies.
Projects appraisal report
Organizational Charts.
Through Internet browsing.
The main source of data collection isThe main source of data collection is the head office of Grameen Bank at Mirpurthe head office of Grameen Bank at Mirpur
-2, Dhaka-1216;. -2, Dhaka-1216;.
Firstly Mr. Mahzabeen Khan, the senior executive officer of Grameen BankFirstly Mr. Mahzabeen Khan, the senior executive officer of Grameen Bank
conducted a briefing about the latest condition of microcredit and the position ofconducted a briefing about the latest condition of microcredit and the position of
rural women in this country.rural women in this country.
TTo collect information about this term paper International Public Relation center,o collect information about this term paper International Public Relation center,
Development of Research methodology, Grameen Information center help a lotDevelopment of Research methodology, Grameen Information center help a lot
to obtain the information needed.to obtain the information needed.
A library to the first building of Grameen bank is situated here and opens forA library to the first building of Grameen bank is situated here and opens for
everyone. Any published data books, Lagers, Journals written by differenteveryone. Any published data books, Lagers, Journals written by different
authors in regarding ‘Grameen Bank and Micro credit’ related with the topic isauthors in regarding ‘Grameen Bank and Micro credit’ related with the topic is
available here. available here.
A Questioner is arranged between some members of Grameen Bank, fined someA Questioner is arranged between some members of Grameen Bank, fined some
subject from it, studied them and try to find out answers for the purpose of sortingsubject from it, studied them and try to find out answers for the purpose of sorting
out the best way to solve them.out the best way to solve them.
In analyzing the available data to prepare this term paper, there are great
workings done by Authors. But since the knowledge in this field is somewhat
limited to the authors, the term paper may have some shortcomings regarding
the findings.
Data Insufficiency: It was very difficult to collect data from such a big
organization. Because of some divisional and confidential problem, it
could not be possible to get enough information.
Lack of Records: Sufficient books, publications, facts and figures are
not available. These constraints narrowed the scope of accurate
analysis. If these limitations were not been there, the report would
have been more useful and attractive.
Short time Allocation: The allocated time was very short for the
study.
Connectivity with Study: The study may not give exact result as it is
a study of our learning process.
Restriction of Collection of Information: Again for formalities
constraints allowance was restricted. That’s why information
shortage occurred.
1. Starting Activities.2. Organized Activities.3. First Banking History
1. STARTING ACTIVITIES:
The origin of the activities of Grameen Bank can be traced to the 1976 when
Mohammed Yunus set up an experiment in ‘JOBRA’ village beside of the
Chittagong University campus in chittagong. Then the project was not named the
‘Microcredit’. It was named ‘Dheki Rin Prokolpa’ and started with the contribution
of 856 taka only.
2. ORGANIZED ACTIVITIES
With the sponsorship of the central bank of the country and support of the
nationalized commercial banks, the project was extended to Tangail district in
1979.
3. FIRST BANKING ACTIVITIES THROUGH MICROCREDIT SECTOR:
In October 2, 1983, the Grameen Bank was transformed into an independent
bank by government-unscheduled legislation. The rural poor whom it serves own
Today Grameen Bank. Borrowers of the Bank own 90% of its shares, while the
remaining 10% is owned by the government.(See Appendix-1)
Extend banking facilities to poor men and women;
Eliminate the exploitation of the poor by money lenders;
Create opportunities for self-employment for the vast multitude of
Unemployed people in rural Bangladesh;
Bring the disadvantaged, mostly the women from the poorest households,
within the fold of an organizational format which they can understand and
manage by themselves; and
Reverse the age-old vicious circle of "low income, low saving & low
investment", into virtuous circle of "low income, injection of credit,
investment, more income, more savings, more investment, more income".
Owned by the Poor
Grameen Bank Project was born in the village of Jobra, Bangladesh, in
1976. In 1983 it was transformed into a formal bank under a special law passed
for its creation. It is owned by the poor borrowers of the bank who are mostly
women. It works exclusively for them. Borrowers of Grameen Bank at present
own 94 per cent of the total equity of the bank. Remaining 6 percent is owned by
the government.
No Collateral, No Legal Instrument, No Group-Guarantee or Joint
Liability
Grameen Bank does not require any collateral against its micro-loans.
Since the bank does not wish to take any borrower to the court of law in case of
non-repayment, it does not require the borrowers to sign any legal instrument.
Although each borrower must belong to a five-member group, the group
is not required to give any guarantee for a loan to its member. Repayment
responsibility solely rests on the individual borrower, while the group and the
centre oversee that everyone behaves in a responsible way and none gets into
repayment problem. There is no form of joint liability, i.e. group members are not
responsible to pay on behalf of a defaulting member.
97 percent Women
Total number of borrowers is 6.95 million, 97 per cent of them are women.
Branches
Grameen Bank has 2,343 branches. It works in 75,359 villages. Total staff
is 21,363.
Over Tk 310 billion Disbursed
Total amount of loan disbursed by Grameen Bank, since inception, is Tk 310.20
billion (US$ 6.01 billion). Out of this, Tk 277.00 billion (US$ 5.34 billion) has been
repaid. Current amount of outstanding loans stands at TK 33.20 billion (US$
478.02 million). During the past 12 months (from February’06 to January’07)
Grameen Bank disbursed Tk. 50.26 billion (US $ 730.09 million). Monthly
average loan disbursement over the past 12 month was Tk 4.19 billion (US $
60.84 million).(See Appendix-2)
Projected disbursement for 2007 is Tk 65.00 billion (US $ 930 million), i.e.
monthly disbursement of Tk 5.42 billion (US $ 77.50 million). End of the year
outstanding loan is projected to be at Tk. 40.00 billion (US $ 572 million)
Recovery Rate 98 percent
Loan recovery rate is 98.48 per cent.
100 percent Loans Financed From Bank’s Deposits
Grameen Bank finances 100 per cent of its outstanding loan from its
deposits. Over 61 per cent of its deposits come from bank’s own borrowers.
Deposits amount to 136 per cent of the outstanding loans. If we combine both
deposits and own resources it becomes 154 per cent of loans outstanding
No Donor Money, No Loans
In 1995, GB decided not to receive any more donor funds. Since then, it has not
requested any fresh funds from donors. Last installment of donor fund, which
was in the pipeline, was received in 1998. GB does not see any need to take any
donor money or even take loans from local or external sources in future. GB's
growing amount of deposits will be more than enough to run and expand its
credit programme and repay its existing loans.
Earns Profit
Ever since Grameen Bank came into being, it has made profit every year except
in 1983, 1991, and 1992. It has published its audited balance-sheet every year,
audited by two internationally reputed audit firms of the country. All these reports
are available on CD, and some on our web-site: www.grameen.com.
Revenue and Expenditure
Total revenue generated by Grameen Bank in 2005 was Tk 7.39 billion (US $
112.40 million). Total expenditure was Tk 6.39 billion (US $ 97.19 million).
Interest payment on deposits of Tk 2.29 billion (US $ 34.74 million) was the
largest component of expenditure (36 per cent). Expenditure on salary,
allowances, pension benefits amounted to Tk 1.67 billion (US $ 25.37 million),
which was the second largest component of the total expenditure (26 per cent).
Grameen Bank made a profit of Tk 1000 million (US $ 15.21 million) in 2005.
Entire profit is transferred to a Rehabilitation Fund created to cope with disaster
situations. This is done in fulfillment of a condition imposed by the government
for exempting Grameen Bank from paying corporate income tax
Low Interest Rates
Government of Bangladesh has fixed interest rate for government-run
micro credit programmers at 11 per cent at flat rate. It amounts to about 22 per
cent at declining basis. Grameen Bank's interest rate is lower than government
rate.
There are four interest rates for loans from Grameen Bank : 20%
(declining basis) for income generating loans, 8% for housing loans, 5% for
student loans, and 0% (interest-free) loans for Struggling Members (beggars). All
interests are simple interest, calculated on declining balance method. This
means, if a borrower takes an income-generating loan of say, Tk 1,000, and pays
back the entire amount within a year in weekly installments, she'll pay a total
amount of Tk 1,100, i.e. Tk 1,000 as principal, plus Tk 100 as interest for the
year, equivalent to 10% flat rate.
Deposit Rates
Grameen Bank offers very attractive rates for deposits. Minimum interest offered
is 8.5 per cent. Maximum rate is 12 per cent.
Beggars as Members
Begging is the last resort for survival for a poor person, unless he/she
turns into crime or other forms of illegal activities. Among the beggars there are
disabled, blind, and retarded people, as well as old people with ill health.
Grameen Bank has taken up a special program, called Struggling Members
Program, to reach out to the beggars. About 91,000 beggars have already joined
the program. Total amount disbursed stands at Tk. 81.98 million. Of that amount
of Tk. 51.47 million has already been paid off.
Basic features of the program are:
Existing rules of Grameen Bank do not apply to beggar members;
they make up their own rules.
All loans are interest-free. Loans can be for very long term, to
make repayment installments very small. For example, for a loan
to buy a quilt or a mosquito-net, or an umbrella, many borrowers
are paying Tk 2.00 (3.4 cents US) per week.
Beggar members are covered under life insurance and loan
insurance programs without paying any cost
Groups and centers are encouraged to become patrons of the
beggar members.
Each member receives an identity badge with Grameen Bank
logo. She can display this as she goes about her daily life, to let
everybody know that she is a Grameen Bank member and this
national institution stands behind her.
Members are not required to give up begging, but are encouraged
to take up an additional income-generating activity like selling
popular consumer items door to door, or at the place of begging.
Objective of the program is to provide financial services to the
beggars to help them find a dignified livelihood send their children to school and
graduate into becoming regular Grameen Bank members. We wish to make sure
that no one in the Grameen Bank villages has to beg for survival.
Housing for the Poor
Grameen Bank introduced housing loan in 1984. It became a very
attractive programme for the borrowers. This program was awarded Aga Khan
International Award for Architecture in 1989. Maximum amount given for housing
loan is Tk 15,000 (US $ 216) to be repaid over a period of 5 years in weekly
instalments. Interest rate is 8 per cent. 6,42,355 houses have been constructed
with the housing loans averaging Tk 13,202 (US $ 190). A total amount of Tk
8.48 billion (US $ 203.57 million) has been disbursed for housing loans. During
the past 12 months (from February’06 to January’07) 14,253 houses have been
built with housing loans amounting to Tk 137.45 million (US $ 2.00 million).
Micro-enterprise Loans
Many borrowers are moving ahead in businesses faster than others for many
favourable reasons, such as, proximity to the market, presence of experienced
male members in the family, etc. Grameen Bank provides larger loans, called
micro-enterprise loans, for these fast moving members. There is no restriction on
the loan size. So far 1,035,751 members took micro-enterprise loans. A total of
Tk 22.30 billion (US $ 348.83 million) has been disbursed under this category of
loans. Average loan size is Tk 21,534 (US $ 310), maximum loan taken so far is
Tk 1.2 million (US $ 19,897). This was used in purchasing a truck which is
operated by the husband of the borrower. Power-tiller, irrigation pump, transport
vehicle, and river-craft for transportation and fishing are popular items for micro-
enterprise loans.
Scholarships
Scholarships are given, every year, to the high performing children of
Grameen borrowers, with priority on girl children, to encourage them to stay
ahead to their classes. Up to January 2007, scholarships amounting to US$
450,000 have been awarded to 35,494 children. During 2007, US$ 775,000 will
be awarded to about 30,000 children, at various levels of school and college
education.
Education Loans
Students who succeed in reaching the tertiary level of education are given
higher education loans, covering tuition, maintenance, and other school
expenses. By January’07, 14,984 students received higher education loans, of
them 13,999 students are studying at various universities; 170 are studying in
medical schools, 321 are studying to become engineers, 494 are studying in
other professional institutions.
Grameen Network (See Appendix-3)
1) Grameen Phone Ltd.
2) Grameen Telecom
3) Grameen Communications
4) Grameen Cybernet Ltd.
5) Grameen Software Ltd.
6) Grameen IT Park
7) Grameen Information Highways Ltd.
8) Grameen Star Education Ltd.
9) Grameen Bitek Ltd.
10) Grameen Uddog (Enterprise)
11) Grameen Shamogree (Products)
12) Grameen Knitwear Ltd.
13) Gonoshasthaya Grameen Textile Mills Ltd.
14) Grameen Shikkha (Education)
15) Grameen Capital Management Ltd.
16) Grameen Byabosa Bikash (Business Promotion )
17) Grameen Trust
Grameen Bank-Created Companies
The following companies in the Grameen network were created by Grameen
Bank, as separate legal entities, to spin off some projects within Grameen Bank
funded by donors. Donor funds transferred to Grameen Fund were given as a
loan from Grameen Bank. These companies have the following loan liability to
Grameen Bank :
Grameen Fund : Tk 373.2 million (US $ 6.38 million)
Grameen Krishi Foundation : Tk 19 million (US $ .33 million)
Grameen Motsho (Fisheries) Foundation : Tk 15 million (US $ .26 million)
Grameen Bank provided guarantees in favour of the following organizations
while they were receiving loans from the government and the financial
organizations. These guarantees are still in effect.
Grameen Shakti : Tk 9 million (US $ 0.12 million)
Grameen Motsho (Fisheries) Foundation : Tk 8 million (US $ 0.11 million)
Grameen Kalyan
Grameen Kalyan (well-being) is a spin off company created by Grameen
Bank. Grameen Bank created an internal fund called Social Advancement Fund
(SAF) by imputing interest on all the grant money it received from various donors.
SAF has been converted into a separate company to carry out its mandate to
undertake social advance activities among the Grameen borrowers, such as,
education, health, technology, etc.
Loans Paid Off At Death
In case of death of a borrower, all outstanding loans are paid off under
Loan Insurance Program. Under this program, an insurance fund is created by
the interest generated in a savings account created by deposits of the borrowers
made for loan insurance purpose, at the time of receiving loans. Each time an
amount equal to 3 per cent of the loan amount is deposited in this account. This
amount is transferred from the Special Savings account. If the current balance in
the insurance savings account is equal or more than the 3 per cent of the loan
amount, the borrower does not need to add any more money in this account. If it
is less than 3 per cent of the loan amount, she has to deposit enough money to
make it equal.
Coverage of the loan insurance program has also been extended to the
husbands with additional deposits in the loan insurance deposit account. A
borrower can get the outstanding amount of loan paid off by insurance if her
husband dies. She can continue to borrow as if she has paid off the loan.
Total deposits in the loan insurance savings account stood at Tk
3,820.55 million (US$ 55.00 million) as on January 31, 2007. Up to that date
55,462 insured borrowers and insured husbands died and a total outstanding
loans and interest of Tk 382.79 million (US $ 6.11 million) left behind was paid off
by the bank under the program. The families of the deceased borrowers are not
be required to pay off their debt burden any more, because the insured
borrowers or their insured husbands do not leave behind any debt burden to take
care of.
Life Insurance
Each year families of deceased borrowers of Grameen Bank receive a total of
Tk 8 to 10 million (US $ 0.14 million to 0.17 million) in life insurance benefits.
Each family receives Tk 1,500. A total of 90,086 borrowers died so far in
Grameen Bank. Their families collectively received a total amount of Tk 170.90
million (US$ 3.72 million). Borrowers are not required to pay any premium for this
life insurance. Borrowers come under this insurance coverage by being a
shareholder of the bank.
Deposits
By the end of January, 2007 total deposit in Grameen Bank stood at Tk. 45.11
billion (US$ 649.48 million). Member deposit constituted 61 per cent of the total
deposits. Balance of member deposits has increased at a monthly average rate
of 2.87 per cent during the last 12 months.
Pension Fund for Borrowers
As borrowers grow older they worry about what will happen to them
when they cannot work and earn any more. Grameen Bank addressed that issue
by introducing the program of creating a Pension Fund for old age. It immediately
became a very popular program.
Under this program a borrower is required to save a small amount, such
as Tk 50 (US $ 0.86), each month over a period of 10 years. The depositor gets
almost twice the amount of money she saved, at the end of the period. The
borrowers find it very attractive. By the end of January, 2007 the balance under
this account comes to a total of Tk 13.34 billion (US $ 192.04 million). Tk 4.27
billion (US $ 62.04 million) was added during the past 12 months (February-
January, 2007). We expect the balance in this account to grow by Tk 6.26 billion
(US $ 89.54 million) in 2007 making the balance to reach Tk 19.60 billion (US $
280.36 million).
Loan Loss Reserve
Grameen Bank has a very rigorous policy on bad debt provisioning. If a
loan does not get paid back on time it is converted into a special type of loan
called "Flexible Loan", and 50 per cent provisioning is done at the first annual
closing. Hundred per cent provisioning is done when flexible loan completes the
second year. At its third year, the outstanding amount is completely written off
even if the loan repayment still continues.
Balance in the loan loss reserve stood at Tk 2.71billion (US $ 41.12 million) at
the end of 2005 after writing off an amount of Tk 2.00 billion (US $ 30.40 million)
during 2005. Out of the total amount written off in the past an amount of Tk 0.85
billion (US $ 12.96 million) has been recovered during 2005.
Retirement Benefits Paid Out
Grameen Bank has an attractive retirement policy. Any staff can retire
after completing ten years or more of service. At the time of retirement he
receives a retirement benefit in cash. It is usually paid out within a month after
retirement. Since this benefit was introduced 6,226 staff members retired and
received a total amount of Tk 3.43 billion (US $ 61.65 million) in cash. This
amounts to Tk 0.55 million (US $ 9,902) per retiring staff. During the past 12
months 601 staff went on retirement collecting a retirement benefit of Tk 556.00
million (US $ 8.08 million). Average retirement benefit per staff was Tk 0.93
million (US $ 13,444).
Telephone-Ladies
To-date Grameen Bank has provided loans to 282,662 borrowers to
buy mobile phones and offer telecommunication services in nearly half of the
villages of Bangladesh where this service never existed before. Telephone-ladies
run a very profitable business with these phones.
Telephone-ladies play an important role in the telecommunication
sector of the country, and also in generating revenue for Grameen Phone, the
largest telephone company in the country. Telephone ladies use 16.5 percent of
the total air-time of the company, while their number is only 4 per cent of the total
number of telephone subscribers of the company
Getting Elected in Local Bodies
Grameen system makes the borrowers familiar with election process.
They routinely go through electing group chairmen and secretaries, centre-chiefs
and deputy centre-chiefs every year. They elect board members for running
Grameen Bank every three years. This experience has prepared them to run for
public offices. They are contesting and getting elected in the local governments.
In 2003 local government (Union Porishad) election 7,442 Grameen members
contested in the reserved seats for women, 3,059 members got elected. They
constitute 24 per cent of the total members elected in the seats reserved for
women members in the Union Porishad local government. During 1997 local
government election 1,753 members got elected to these reserved seats.
Computerized MIS and Accounting System
Accounting and information management of nearly all the branches
(2,120, out of 2,343) has been computerized. This has freed the branch staff to
devote more time to the borrowers rather than spend it in paper-work. Branch
staffs are provided with pre-printed repayment figures for each weekly meeting. If
every borrower pays according to the repayment schedule, the staff has nothing
to write on the document except for putting the signature. Only the deviations are
recorded. Paper work that remains to be done at the village level is to enter
figures in the borrowers' passbooks.
Thirty six zones, out of 39, are connected with the head office, and with
each other, through intra-net. This has made data transfer and communications
very easy.
Policy for Opening New Branches
New branches are required to fund themselves entirely with the deposits they
mobilize. No fund from head office or any other office is lent to them. A new
branch is expected to break-even within the first year of its operation.
Crossing the Poverty-Line
According to a recent internal survey, 64 per cent of Grameen borrowers'
families of Grameen borrowers have crossed the poverty line. The remaining
families are moving steadily towards the poverty line from below.
'Stars' for Achievements
Grameen Bank provides color-coded stars to branches and staff for 100
percent achievement of a specific task. A branch (or a staff) having five-stars
indicate the highest level of performance. At the end of June 2006 branches
showed the following result.
1246 branches, out of the total of 2,185 branches, received stars
(green) for maintaining 100 per cent repayment record.
1431 branches received stars (blue) for earning profit. (Grameen Bank
as a whole earns profit because the total profit of the profit-earning branches
exceeds the total loss of the loss-incurring branches.)
1179 branches earned stars (violet) by meeting all their financing out of
their earned income and deposits. These branches not only carry out their
business with their own funds, but also contribute their surpluses to meet the
fund requirement of deficit branches.
308 branches have applied for stars (brown) for ensuring education for
100% of the children of Grameen families. After the completion of the verification
processes their stars will be confirmed. 54 branches have applied for stars (red)
indicating branches those have succeeded in taking all its borrowers' families
(usually 3,000 families per branch) over the poverty line.
The star will be confirmed only after the verification procedure is
completed. Each month branches are coming closer to achieving new stars.
Grameen staff looks forward to transforming all the branches of Grameen Bank
into five star branches.
Grameen Bank provides color-coded stars to branches and staff for 100
percent achievement of a specific task. A branch (or a staff) having five-stars
indicate the highest level of performance. At the end of June 2006 branches
showed the following result.
1246 branches, out of the total of 2,185 branches, received stars (green) for
maintaining 100 per cent repayment record.
1431 branches received stars (blue) for earning profit. (Grameen Bank
as a whole earns profit because the total profit of the profit-earning branches
exceeds the total loss of the loss-incurring branches.)
1179 branches earned stars (violet) by meeting all their financing out of
their earned income and deposits. These branches not only carry out their
business with their own funds, but also contribute their surpluses to meet the
fund requirement of deficit branches.
308 branches have applied for stars (brown) for ensuring education for
100% of the children of Grameen families. After the completion of the verification
processes their stars will be confirmed. 54 branches have applied for stars (red)
indicating branches those have succeeded in taking all its borrowers' families
(usually 3,000 families per branch) over the poverty line.
The star will be confirmed only after the verification procedure is
completed. Each month branches are coming closer to achieving new stars.
Grameen staff looks forward to transforming all the branches of Grameen Bank
into five star branches.
The Grameen Bank's Method of action can be illustrated by the following
principles:
1. Start with the problem rather than the solution: a credit system must be
based on a survey of the social background rather than on a pre-
established banking technique.
2. Adopt a progressive attitude: development is a long-term process which
depends on the aspirations and commitment of the economic operators.
3. Make sure that the credit system serves the poor, and not vice-versa:
credit officers visit the villages, enabling them to get to know the
borrowers.
4. Establish priorities for action vis-à-vis to the target population: serve the
most poverty-stricken people needing investment resources, who have no
access to credit.
5. At the beginning, restrict credit to income-generating production
operations, freely selected by the borrower. Make it possible for the
borrower to be able to repay the loan.
6. Lean on solidarity groups: small informal groups consisting of co-opted
members coming from the same background and trusting each other.
7. Associate savings with credit without it being necessarily a prerequisite.
8. Combine close monitoring of borrowers with procedures which are simple
and standardized as possible.
9. Do everything possible to ensure the system's financial balance.
10. Invest in human resources: training leaders will provide them with real
development ethics based on rigor, creativity, understanding and respect
for the rural environment.
Grameen Bank credit delivery system has the following features:
1. There is an exclusive focus on the poorest of the poor.
Exclusivity is ensured by:
i. establishing clearly the eligibility criteria for selection of targeted
clientele and adopting practical measures to screen out those who
do not meet them
ii. in delivering credit, priority has been increasingly assigned to
women
iii. The delivery system is geared to meet the diverse socio-economic
development needs of the poor.
2. Borrowers are organized into small homogeneous groups.
Such characteristics facilitate group solidarity as well as participatory
interaction. Organizing the primary groups of five members and federating
them into centres has been the foundation of Grameen Bank's system.
The emphasis from the very outset is to organizationally strengthen the
Grameen clientele, so that they can acquire the capacity for planning and
implementing micro level development decisions. The Centers are
functionally linked to the Grameen Bank, whose field workers have to
attend Centre meetings every week. (See appendix-4)
3. Special loan conditional ties which are particularly suitable for the
poor.
These include:
i. very small loans given without any collateral
ii. loans repayable in weekly installments spread over a year
iii. eligibility for a subsequent loan depends upon repayment of first
loan
iv. individual, self chosen, quick income generating activities which
employ the skills that borrowers already posses
v. close supervision of credit by the group as well as the bank staff
vi. stress on credit discipline and collective borrower responsibility or
peer pressure
vii. special safeguards through compulsory and voluntary savings to
minimize the risks that the poor confront
viii. Transparency in all bank transactions most of which take place at
centre meetings.
4. Simultaneous undertaking of a social development agenda
addressing basic needs of the clientele.
This is reflected in the "sixteen decisions" adopted by Grameen
borrowers. This helps to:
i. raise the social and political consciousness of the newly organized
groups
ii. focus increasingly on women from the poorest households, whose
urge for survival has a far greater bearing on the development of
the family
iii. Encourage their monitoring of social and physical infrastructure
projects - housing, sanitation, drinking water, education, family
planning, etc.
5. Design and development of organization and management systems
capable of delivering programme resources to targeted clientele.
The system has evolved gradually through a structured learning process,
that involves trials, errors and continuous adjustments. A major
requirement to operationalize the system is the special training needed for
development of a highly motivated staff, so that the decision making and
operational authority is gradually decentralized and administrative
functions are delegated at the zonal levels downwards.
6. Expansion of loan portfolio to meet diverse development needs of
the poor.
As the general credit programme gathers momentum and the borrowers
become familiar with credit discipline, other loan programmes are
introduced to meet growing social and economic development needs of
the clientele. Besides housing, such programmes include:
i. credit for building sanitary latrines
ii. credit for installation of tube wells that supply drinking water and
irrigation for kitchen gardens
iii. credit for seasonal cultivation to buy agricultural inputs
iv. loan for leasing equipment / machinery, ie., cell phones purchased
by Grameen Bank members
v. Finance projects undertaken by the entire family of a seasoned
borrower.
The underlying premise of Grameen is that, in order to emerge from
poverty and remove themselves from the clutches of usurers and middlemen,
landless peasants need access to credit, without which they cannot be expected
to launch their own enterprises, however small these may be. In defiance of the
traditional rural banking postulate whereby "no collateral (in this case, land)
means no credit", the Grameen Bank experiment set out to prove - successfully -
that lending to the poor is not an impossible proposition; on the contrary, it gives
landless peasants the opportunity to purchase their own tools, equipment, or
other necessary means of production and embark on income-generating
ventures which will allow them escape from the vicious cycle of "low income, low
savings, low investment, low income". In other words, the banker's confidence
rests upon the will and capacity of the borrowers to succeed in their
undertakings.
The mode of operation of Grameen Bank is as follows. A bank branch
is set up with a branch manager and a number of center managers and covers
an area of about 15 to 22 villages. The manager and the workers start by visiting
villages to familiarize themselves with the local milieu in which they will be
operating and identify the prospective clientele, as well as explain the purpose,
the functions, and the mode of operation of the bank to the local population.
Groups of five prospective borrowers are formed; in the first stage, only two of
them are eligible for, and receive, a loan. The group is observed for a month to
see if the members are conforming to the rules of the bank. Only if the first two
borrowers begin to repay the principal plus interest over a period of six weeks, do
the other members of the group become eligible themselves for a loan.
Because of these restrictions, there is substantial group pressure to keep
individual records clear. In this sense, the collective responsibility of the group
serves as the collateral on the loan.
Loans are small, but sufficient to finance the micro-enterprises
undertaken by borrowers: rice-husking, machine repairing, purchase of
rickshaws, buying of milk cows, goats, cloth, pottery etc. The interest rate on all
loans is 16 percent. The repayment rate on loans is currently - 95 per cent - due
to group pressure and self-interest, as well as the motivation of borrowers.
Although mobilization of savings is also being pursued alongside the
lending activities of the Grameen Bank, most of the latter's loan able funds are
increasingly obtained on commercial terms from the central bank, other financial
institutions, the money market, and from bilateral and multilateral aid
organizations.
The Grameen Bank is based on the voluntary formation of small groups of five
people to provide mutual, morally binding group guarantees in lieu of the
collateral required by conventional banks. At first only two members of a group
are allowed to apply for a loan. Depending on their performance in repayment the
next two borrowers can then apply and, subsequently, the fifth member as well.
The assumption is that if individual borrowers are given access to credit,
they will be able to identify and engage in viable income-generating activities -
simple processing such as paddy husking, lime-making, manufacturing such as
pottery, weaving, and garment sewing, storage and marketing and transport
services. Women were initially given equal access to the schemes, and proved
not only reliable borrowers but astute entrepreneurs. As a result, they have
raised their status, lessened their dependency on their husbands and improved
their homes and the nutritional standards of their children. Today over 90 percent
of borrowers are women.
Intensive discipline, supervision, and servicing characterize the
operations of the Grameen Bank, which are carried out by "Bicycle bankers" in
branch units with considerable delegated authority. The rigorous selection of
borrowers and their projects by these bank workers, the powerful peer pressure
exerted on these individuals by the groups, and the repayment scheme based on
50 weekly installments, contribute to operational viability to the rural banking
system designed for the poor. Savings have also been encouraged. Under the
scheme, there is provision for 5 percent of loans to be credited to a group find
and Tk 5 is credited every week to the fund.
The success of this approach shows that a number of objections to
lending to the poor can be overcome if careful supervision and management are
provided. For example, it had earlier been thought that the poor would not be
able to find remunerative occupations. In fact, Grameen borrowers have
successfully done so. It was thought that the poor would not be able to repay; in
fact, repayment rates reached 97 percent. It was thought that poor rural women
in particular were not bankable; in fact, they accounted for 94 percent of
borrowers in early 1992. It was also thought that the poor cannot save; in fact,
group savings have proven as successful as group lending. It was thought that
rural power structures would make sure that such a bank failed; but the Grameen
Bank has been able to expand rapidly. Indeed, from fewer than 15,000 borrowers
in 1980, the membership had grown to nearly 100,000 by mid-1984. By the end
of 1998, the number of branches in operation was 1128, with 2.34 million
members (2.24 million of them women) in 38,957 villages. There are 66,581
centres of groups, of which 33,126 are women. Group savings have reached
7,853 million taka (approximately USD 162 million), out of which 7,300 million
taka (approximately USD 152 million) are saved by women.
It is estimated that the average household income of Grameen Bank members is
about 50 percent higher than the target group in the control village, and 25
percent higher than the target group non-members in Grameen Bank villages.
The landless have benefited most, followed by marginal landowners. This has
resulted in a sharp reduction in the number of Grameen Bank members living
below the poverty line, 20 percent compared to 56 percent for comparable non-
Grameen Bank members. There has also been a shift from agricultural wage
labor (considered to be socially inferior) to self-employment in petty trading. Such
a shift in occupational patterns has an indirect positive effect on the employment
and wages of other agricultural waged laborers. What started as an innovative
local initiative, "a small bubble of hope", has thus grown to the point where it has
made an impact on poverty alleviation at the national level ".
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 tubewells. 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 daughters 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.
A questioner for the attitude Survey is conducted for the executives of Grameen Bank to
measure attitudes of with the permission of the authority. (See Apendix-1)
Where we find their Job satisfaction levels, their performance levels, Organizational
Performance, working environment, salary condition, ranking process, insurance
facilities, working hour,
Employee Job satisfaction levels
Level of workers Satisfaction Level & Percentages
High Level Officials High (75%)
Mid Level Officials Average (55%)
First Level Officials Lower than average (42%)
Employee Performance Levels
Level of Officials Skills Use of Skills
High Level Officials Conceptual, Technical &
Human
Conceptual 70%,
Human 20%
Technical 10%
Mid Level Officials Conceptual, Technical &
Human
Conceptual 30%,
Human 20%
Technical 50%
First Level Officials Conceptual, Technical &
Human
Conceptual 10%,
Human 20%
Technical 70%
Working environment
Level of Officials Satisfaction levels
High Level Officials Strongly satisfied
Mid Level Officials Satisfied
First Level Officials No Comments (average)
Working Hour
Level of Officials Duration of time
High Level Officials No boundary of Working Time
Mid Level Officials Sometimes cross the assigned Time
First Level Officials Assigned Time
Insurance Facilities
Level of Officials Availability
High Level Officials Yes
Mid Level Officials Yes
First Level Officials Yes
At last we can say that the Grameen Bank (GB) has reversed conventional
banking practice by removing the need for collateral and created a banking
system based on mutual trust, accountability, participation and creativity. GB
provides credit to the poorest of the poor in rural Bangladesh, without any
collateral. At GB, credit is a cost effective weapon to fight poverty and it serves
as a catalyst in the over all development of socio-economic conditions of the poor
who have been kept outside the banking orbit on the ground that they are poor
and hence not bankable.
As in 2007, it has more than 7 million borrowers, 98 percent of whom are women.
With more than 2283 branches, GB provides services in 73,609 villages,
covering more than 88 percent of the total villages in Bangladesh.
o The credit deliver system should be improved.
o In Some cases authority is so strict. As a result sometimes debtors
are afraid of taking loan.
o The government should help Grameen Bank to grow faster but at
the same time, the government itself should continue to carry out its poverty
alleviation programs especially through BRDB and other organs
o The complementary role of Grameen Bank and government can
take care of the problem,
o Grammen Bank should remove all its wrong perception from
people and institutions.
REPORTS:
A report on Microcredit and Women's Empowerment, written by
Abdul Bayes.
BOOKS:
Dr. Mohammad Yunus,1995, Microcredit and my life, Bangla Edition,
Ahmed Mahfujul Haque,
Dr. Mohammad Yunus,May 2006,Introducing Grameen Bank, Bangla
Edition, Packages CorporationLtd,4/cShaloShahar -4209.
Dr. Mohammad Yunus,1999, Pother Badha sorie Nin Manushke Agute
Din, Bangla Edition, Ahmed Mahfujul Haque,
Dr. Mohammad Yunus, Muhammad and Jolis, Alan. Banker to
the Poor (Bangla Version-1st Edition) : The autobiography of
Muhammad Yunus, founder of the Grameen Bank. Public
Affairs:Bangladesh, 1999.
Annual and Monthly Report:
1. Grameen Bank: Monthly Report –2007. Grameen Bank: Dhaka, 2007.
2. Grameen Bank: Annual Report –2006. Grameen Bank: Dhaka, 2006.
]
Internet Search:
Grameen Bank
Retrieved 18 March 2007, from
http://www.grameen-info.org/
MuhammadYunus.org
Retrieved 18 March 2007, from
http://www.muhammadyunus.org/
Foreign Correspondent - Interview with Prof. Muhammad Yunu s
Retrieved 18 March 2007, from
http://www.abc.net.au/foreign/stories/s400630.htm
Follow-up report on the Microcredit summit
Retrieved 18 March 2007, from
http://www.leftbusinessobserver.com/Micro_summit.html
Microcredit, Macro Problems
Retrieved 18 March 2007, fromhttp://www.thenation.com/doc/20061030/bello
Microcredit, microresults
Retrieved 18 March 2007, from
http://www.leftbusinessobserver.com/Micro.html
The MicroBanking Bulletin ,
Retrieved 18 March 2007, from
http://www.mixmbb.org/en/index.html
Journal of Microfinance ,
Retrieved 18 March 2007, from
http://www.lib.byu.edu/spc/microfinance/
Grameen Foundation ,
Retrieved 18 March 2007, from
http://www.grameenfoundation.org/
Microcredit and Women's Poverty ,
Retrieved 18 March 2007, from
http://www.dollarsandsense.org/archives/2006/1106feinerbarker.html
Appendix-1Appendix-1QQ uestionnaire for Attitude Surveyuestionnaire for Attitude Survey
This questionnaire has been prepared by the students of Management
Studies, 12th batch, BBA as per requirement of the course: ‘Industrial
Psychology’ (107). It has been primarily prepared in order to conduct a
survey in Head office of Grameen Bank at Mirpur -2, Dhaka-1216;. Head office of Grameen Bank at Mirpur -2, Dhaka-1216;.
Your kind cooperation will be highly appreciated.
NAME:
Instruction: Please answer the Following statements using the following rating scale5=Strongly agree 4=Agree
3=Undecided 2=Disagree1=Strongly Disagree
1. This Organization is pretty good place to work.
Rating……………………………………………………..
2. Organization’s working environmental condition is very good.
Rating……………………………………………………..
3. I can get ahead in this organization if I make the effort.
Rating……………………………………………………..
4. I am satisfied with my salary of this level.
Rating……………………………………………………..
5. I am satisfied with my ranking also.
Rating……………………………………………………..
6. Salary rate of mine is competitive with the other organization in this level or ranking.
Rating……………………………………………………..
7. This organization gives me bonus in satisfied level.
Rating……………………………………………………..
8. Not only bonus but also this organization gives me many other facilities.
Rating……………………………………………………..
9. I get insurance facilities from my organization.
Rating……………………………………………………..10. My job makes the better use of my ability.
Rating……………………………………………………..
11. I appreciate my actual working hour.
Rating……………………………………………………..
12My working pressure is in line with the current salary.
Rating……………………………………………………..
13. My expected working is 8hrs /day with the maintenance of law in Bangladesh.
Rating……………………………………………………..
14. I have trust and confidence in my boss.
Rating……………………………………………………..
15. I feel free to tell my boss what I think.
Rating……………………………………………………..
13. I know what boss expect from me.
Rating……………………………………………………..
16. I find the best security to work in.
Rating……………………………………………………..
Appendix-2Appendix-2
GRAMEEN BANK
HEAD OFFICEMIRPUR-2, DHAKA-1216
Statement No: 1Issue Number: 326, Date: March 15, 2007
Grameen Bank Monthly Update in Taka : February, 2007
Sl. No. Particulars Million Taka
1.0 Cumulative Amount Disbursed Since Inception 314,482.75
2.0 Cumulative Amount Repaid Since Inception 280,897.10
3.0 Amount Disbursed this Month 4,277.08
4.0 Amount Repaid this Month 3,894.59
5.0 Outstanding Loan
5.1 Basic Loan 30,893.85
5.2 Flexible Loan (a) 1,829.19
5.3 Housing Loan 278.30
5.4 Other Loans 584.32
5.5 Total : 33,585.65
6.0 Rate of Recovery (b) 98.49
7.0 Total Outstanding of Borrowers Missing 5 to 9 Consecutive Instalments (c)
7.1 Basic Loan 157.93
7.2 Flexible Loan 206.25
7.3 Total : 364.17
8.0 Overdue Loan (d)
8.1 Basic Loan (e) 174.41
8.2 Flexible Loan 433.25
8.3 Housing Loan 46.75
8.4 Other Loans 0.84
8.5 Total : 655.25
9.0
Microenterprise Loan (Cumulative)
9.1 No. of Microenterprise Loans 1,061,984
9.2 Amount Disbursed 22,899.85
9.3 Amount Repaid 17,764.99
10.0 Balance of Deposits
10.1 Members' Deposit 27,675.46
10.2 Non-Members' Deposit 17,989.35
10.3 Total : 45,664.81
11.0 Deposits to Outstanding
11.1 Deposits as Percentage of Outstanding Loans 136
11.2 Deposits and Own Resources as Percentage of Outstanding Loans
154
11.3 No. of Branches with more in Deposits than in Outstanding Loans
1,369
12.0 Beggar Members
12.1 No. of Beggar Members 81,863
12.2 Amount Disbursed (Cumulative) 85.32
12.3 Amount Repaid (Cumulative) 53.64
12.4 Amount of Savings (Balance) 6.70
13.0 Cumulative Number of Village Phones 289,204
14.0 Cumulative Number of Houses Built with Housing Loans
643,756
15.0 Life Insurance Fund (Cumulative)
15.1 No. of Deaths Among all Borrowers 90,857
15.2 Amount paid out from Life Insurance Fund 171.84
16.0 Loan Insurance
16.1 Balance in Loan Insurance Savings 3,811.22
16.2 No. of Deaths Among Insured Borrowers (Cumulative)
57,528
16.3 Amount of Outstanding Principal and Interest of the Deceased Borrowers paid out from Insurance Fund (Cumulative)
388.81
17.0 Higher Education Loan (Cumulative)
17.1 No. of Female Students 3,025
17.2 No. of Male Students 12,373
17.3 Total : 15,398
17.4 Amount Disbursed (Female) 79.20
17.5 Amount Disbursed (Male) 334.37
17.6 Total : 413.57
18.0 Scholarship (Cumulative)
18.1 Scholarship Recipient (Female) 20,842
18.2 Scholarship Recipient (Male) 14,854
18.3 Total : 35,696
18.4 Scholarship Amount (Female) 15.78
18.5 Scholarship Amount (Male) 11.94
18.6 Total : 27.72
19.0 Number of Members
19.1 Female 6,768,363
19.2 Male 237,563
19.3 Total : 7,005,926
20.0 Number of Groups 1,107,515
21.0 Number of Centres 123,732
22.0 Number of Villages 75,950
23.0 Number of Branches 2,381
24.0 Number of Branches with Computerized Accounting and MIS
2,158
Appendix-2Appendix-2
2002 2003 2004 2005
Institutional characteristic:
1 Total assets (In million Taka.) 22,659 27,272 33,653 44,624
Total assets (In million USD) 391 467 558 678
2 Number of offices 1,332 1,357 1,525 1,944
Number of employees 11,699 11,846 13,038 16,142
Outreach indicators:
3 Number of branches 1,178 1,195 1,358 1,735
4 Number of members (In millions)
2.48 3.12 4.06 5.58
5 Number of active borrowers (In millions)
2.08 2.87 3.70 5.05
6 Number of active borrowers per branch (year-end)
1,766 2,402 2,722 2,912
7 Number of loan officers 7,448 7,495 7,925 9,166
8 Percent of women members 95.20% 95.44% 95.66% 96.27%
9 Average loan balance per borrower(Taka)
6,134 5,622 5,444 5,563
Average loan balance per borrower(USD)
106 96 90 85
Loan portfolio
10 Loans (Principal Amount ) disbursed (In million Taka)
15,869 21,467 25,873 39,183
Loans (Principal Amount ) disbursed (In million USD)
274 369 435 612
11 Number of loans disbursed
(In millions)
2.13 3.19 3.81 5.09
12 Total loan outstanding (gross) (In million Taka)
12,759 16,138 20,127 28,109
Total loan outstanding (gross) (In million USD)
220 276 334 427
13 Current (Performing) loans (In million Taka)
12,533 15,679 19,535 27,388
Current (Performing) loans (In million USD)
216 268 324 416
14 Overdue loans (In milion Taka)
116 371 368 479
Overdue loans (In milion USD)
2.00 6.35 6.11 7.28
15 Portfolio growth rate 1.99% 26.48% 24.72% 39.66%
Sustainability/Profitability
ratios:
16 Return on equity (ROE) 2.93% 10.63% 8.98% 21.22%
17 Operating self sufficiency (OSS)
102.00% 111.10% 109.88% 115.65%
18 Financial self sufficiency (FSS)
99.60% 107.88% 105.70% 110.40%
Asset / Liability
management ratios:
19 Yield on gross portfolio
(nominal)17.98% 18.51% 18.89% 19.24%
20 Cost of funds ratio 5.19% 6.18% 7.15% 7.38%
Portfolio Quality:
21 Portfolio at risk ratio (PAR) 1.77% 2.84% 2.94% 2.57%
Efficiency and productivity ratios:
22 Productivity per loan officer 291 399 487 579
23 Operating expense ratio 11.19% 10.52% 9.22% 9.87%
24 Personnel expense / Loan portfolio
8.70% 8.12% 6.88% 6.92%
25 Cost per borrower (In Taka) 714 614 509 544
Cost per borrower (In USD) 12 11 8 8.27
26 Portfolio per loan officer (in million Taka)
1.78 2.25 2.65 3.22
Portfolio per loan officer (in million USD)
0.031 0.038 0.044 0.049
Financing structure:
27 Capital adequacy ratio 9.70% 19.30% 16.51% 13.41%
Item 1994 1995 1996
Value added in grameen Bank 1890.7 2181.9 2750.8
Value added in linked sectors due to supply of inputs to Grameen Bank
75.9 88.9 97.2
Value added in linked sectors attributed to Grameen Bank loans
7341.8 7222.1 6257.1
Capital supplying sectors 1348.9 1362.7 1152.8
Input supplying sectors 5992.9 5859.4 5104.3
Wage payment from loans 547.8 553.9 468.9
Return on loan financed activities at 40%
5556.8 5464 4751.2
Total contribution of Grameen Bank of GDP
15413 15510.8 14325.2
Total GDP 1030365 1170261 1301600
Percentage contribution of Grameen Bank to GDP
1.50% 1.33% 1.10%
Source: Contribution of Grameen Bank to Gross Domestic Product of Bangladesh: Preliminary Estimates, By Mohiuddin Alamgir, December 1998
Appendix
Appendix 1: Total amount of loan disbursed by Grameen Bank.
Appendix 2: The working procedure of Grameen Bank.
Article Submitted by : Asad Saimon
Power by : http://assignmentpoint.com/