Part - I

With the retail boom hitting all time high, borrowing has surely undergone a paradigm shift. To get loans without collateral is a Herculean task. And this surely leaves a vast majority of Indians to go back to the clutches of the moneylenders and get exploited. It is here that the role of micro finance needs to be emphasized.

Micro finance is an ambitious program, which extends loans to the poorest of the poor to finance their employment projects without any collateral. This helps generate employment, social and political consciousness and also empowerment of women.

Grameen Bank is one such initiative. 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 credit-worthy. As on July 2004, it has 3.7 million borrowers, 96 percent of which are women. With 1267 branches, GB provides services in 46,000 villages, covering more than 68 percent of the total villages in Bangladesh.

History

Grameen bank is a brainchild of Professor Muhammad Yunus, Head of the Rural Economics Program at the University of Chittagong. His aim was to provide banking and credit facilities to the poorest of the poor. Thus, was born the Grameen Bank Project (Grameen means "rural" or "village" in Bangla language) with the following objectives: -

Next

* Contributed by -
Swetha Narayanaswamy,
First Year M.B.A.,
ICFAI Business School, Mumbai.