Liberation Via Grameen Bank

Today's class was given by Dr. Anul and he talked in lengthy on one of my favourite subjects i.e. Micro Finance. He kept stressing that micro credit is not micro finance, but sub-set to micro finance. And in his class I heard for the first time about BRAC (previously known as Bangladesh Rural Advancement Committee), an NGO established by Mr. Fazle Hasan Abed in 1972. If this fact is correct, this means BRAC was providing micro credit to poor much earlier that Grameen Bank!

To learn more, I googled the Net on this topic. Basically, most of the literature that I found, clearly mentioned how Dr. Muhammad Yunus was inspired during the terrible Bangladesh famine in 1974. He made loans of $27 to a group of 42 families, whereby at the end of the day, all were fully repaid.

The Grameen Bank (literally, "Bank of the Villages", in Bangla) is the outgrowth of Muhammad Yunus' ideas. The bank began as a research project by Yunus and the Rural Economics Project at Bangladesh's University of Chittagong to test his method for providing credit and banking services to the rural poor. In 1976, the village of Jobra and other villages surrounding the University of Chittagong became the first areas eligible for service from Grameen Bank. In 1983, it was transformed into an independent bank by the legislature of Bangladesh. As of mid-2006, Grameen Bank branches number over 2,100. Its success has inspired similar projects around the world. (Wikipedia)

Other points worth mentioning include the fact that majority of the beneficiaries are women and the repayment rate is around 98%. This raises a numbe of good questions, are women good paymaster than men? Or is it all this while the formal financiers have been sexist by denying a lot of women (at least in the case of Bangladesh) from financial services, especially credit? Are poors really bankable? Or like what Sudhirendar Sharma pointed out that micro credit is just a macro trap - landed poor communities in a perpetual debt-trap?

Let me do more reading on this and if you guys interested to find out more about this, just email me personally.

Grameen Bank might have operational issues like other banks (in the light of latest development, even big boys like Citigroup are financially affected by the US sub prime crisis), but what I find it fascinating is the Sixteen Decisions - a set of values incorporated by the Bank and there are as follows:

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 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.

So, if you find something similar by Maybank or Public Bank, quickly alert me, please. Thanks.