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BYU Center for Economic Self-Reliance
International Distribution for Small Fortunes provided by APT Worldwide

Organization Profile & Updates

Quick Facts
Type of Organization: Regulated Bank
Founder: Muhammad Yunus
Year of First Loan: 1976
Current Borrowers: 3.7 million
Total Borrowers (1976-2005): 5 million
% of Women Borrowers: 96%
% Served as Poorest of the Poor: 100%
Total Funds Loaned (1976-2005): $5.01 billion
Loan Portfolio (2003): $369,320,000
Recovery Rate: 99.02%
Average Loan Size: $334
Annual Operating Budget: $1,671,892,639
Number of Employees: 14,536

Grameen Bank

Mirpur-1, Dhaka-1216

(88 02) 9005257-69

The Grameen Bank provides small loans to women and the poorest of the poor to provide capital for their microbusinesses. In addition, loans are available for other activities such as purchasing homes, improving homes and property, leasing, and higher education. The Grameen Bank serves the country of Bangladesh in 18 zones, as displayed in the following map.

The Grameen Family
Over two dozen nonprofit and for-profit businesses make up the Grameen Family. Collectively, they exist to alleviate poverty in Bangladesh. The Village Phone project is an example of a high profile activity taken on by parts of the Grameen Family and has been written up in a number of newspapers and magazines. In this case Grameen Phone, a for-profit organization in the Grameen Family, is 35% owned by the Grameen Telecom, a nonprofit organization in the family. The Grameen Bank, a for-profit organization in the family, provides a loan to a "village phone lady" who sells minutes on her Grameen Phone cell phone to neighbors-acting like the village pay phone since land line phones are rarely available. This turnkey microbusiness is very successful due to the reduced costs for people to use the phone to contact family members or investigate spot prices of produce/product that they raise and sell.

Other Grameen Family organizations include some of the following:

  • Grameen Telecom- Dedicated to extending benefits of information revolution to rural people of Bangledesh, Grameen Telecom provides cell phones and telecommunication services to 100 million rural inhabitants.
  • Grameen Fund- Provides risk capital for ventures that promise good return on equity investments, as well as direct and indirect benefits to rural poor
  • Grameen Technology- A not-for-profit information technology company that provides complete systems solutions for even the most novice users. Dedicated to developing IT products for the rural poor, they also provide systems for ASHI in Philippines and CFTS in India.
  • Grameen Shakti- Since 70% of the Bangladesh population is deprived of conventional energy, Grameen Shakti was created in 1996 to develop energy-renewable products such as solar-energy systems and wind energy.
  • Grameen Shikkha- A special program created in 1996 to educate Grameen members and their children.
  • Grameen Knitwear Limited- A knitwear factory that exports 100% of it products to Europe.
  • Grameen Cybernet Ltd- Created in 1996, Grameen Cybernet Ltd. is now Bangladesh's leader in Internet services.
  • Grameen Trust- Features dialogue, workshops, and training for any interested organizations or individuals.

The Grameen Story
In the mid-1970s Professor Muhammad Yunus returned to Bangladesh to teach at Chittagong University after receiving a PhD in economics in the United States. He returned to a newly independent country devastated by war that was trying to deal with a multitude of economic problems. It was not long before Professor Yunus realized that the economic theories and practices he learned were useless in dealing with the abject poverty he saw every day as he commuted to and from his college office. He and some students started an action research project and interviewed 42 impoverished women and found that they were all hardworking people who were paying outrageous fees to suppliers because they could not pay in cash. The suppliers made money, but each of the women had very little money left after paying their suppliers back, or selling their products through them. Adding up the various capital requirements for all 42 of the women, Yunus found out that US$27 was all that was required for these women to be able to purchase their usual supplies directly and bypass the creditors. He gave each of the woman the small amount of money needed, and within weeks was paid back-and each of the women had enough profit to continue to directly purchase their supplies-instantly making more profit than they ever had before.

This was the start of the first Grameen Bank (Bangla for Village Bank) focused on the following objectives:

  • 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
  • Reverse the age-old vicious circle of "low income, low saving & low investment," into a virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income."

The action research demonstrated its strength in Jobra (a village adjacent to Chittagong University) and some of the neighboring villages during 1976-1979. With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation. Today Grameen Bank is owned by the rural poor whom it serves. Borrowers of the Bank own 90% of its shares, while the remaining 10% is owned by the government