Banker To The Poor


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  • In 1982, He met with Mr. A M A Muhith, in Bangadesh Rural Development AcademyHe was supposed to present the paper outlining the future potion for Grameen Bank project. In following days Muhith became finance minister in new governmentAfter facing a strong opposition from the chief-executives of all gov. owned bank in a central bank meeting, Mr. Muhith took proposal directly to the president. And end of September 1983, president had signed the proclamation and Grameen bank was born.Shocked- after getting the proclamation. Why: Gov. will keep 60 % and borrower only 40 % of ownership.First working day of Grameen bank was 2 Oct 1983. And, In 1985, owneship structure of Grameen bank changed, Now borrowers will keep 75 % and gov. will keep 25 %.
  • To provide better oversight, Grameen was divided into five zones, and each zonal manager wasgiven complete latitude to oversee the operations of his zone. “So, the zonal office is the onewho looks at the actual operations of the bank. Our job is only to recruit and train centermanagers, and send them on; and to make sure that the money is there, properly used andaccounted for.” (See Exhibit 6 for a map of Grameen’s Zones.)
  • To provide better oversight, Grameen was divided into five zones, and each zonal manager wasgiven complete latitude to oversee the operations of his zone. “So, the zonal office is the onewho looks at the actual operations of the bank. Our job is only to recruit and train centermanagers, and send them on; and to make sure that the money is there, properly used andaccounted for.” (See Exhibit 6 for a map of Grameen’s Zones.)
  • Banker To The Poor

    1. 1. “BANKER TO THE POOR”[Micro-Lending and the Battle Against World Poverty] An Autobiography of ‘Muhammad Yunus’
    2. 2. Policy of Presentation About the Author Awards to the Muhammad Yunus Purpose of the Book About Grameen Bank Learning’s of the Group Why Others should Read this Book Critics Father of Micro-Lending
    3. 3. About Author (Professional Life / Balance Sheet)1940, Chittagong, India, (Now Bangladesh)Third of fourteen Children ( Five of them died ininfancy)BA & MA (Economics) at Dhaka UniversityPh. D ( Economics) from Vanderbilt University (USA)In 1972, Head-of-Department (Eco) ofChittagong University Idiot Box
    4. 4. About Author (Personal Life / Profit & Loss Account) 1st Marriage Account (1970)  Amount (Wife): Vera Forostenko  Interest (Kid): Monica ( March 7, 1977)  Repayment : No, Divorced ( Dec. 1977)  Account Place: USA 2nd Marriage Account ( April, 1980)  Amount (Wife): Afrozi  Interest (Kid): Deena Afrozi Yunus ( 24 January 1986)  Repayment : Yes, Now No divorce  Account Place: Bangladesh Teacher & Researcher in Adv. Physics @ University of Manchester
    5. 5. Muhammad’s Role Model“Muhammad was influenced by his mother’s love for helping the poor, and her willingness to share whatever the family had with the less fortunate. This had a lasting effect on him” ‘Poverty is a Result of Mismanagement of Resources
    6. 6. Muhammad’s Objective Muhammad Yunus had following objectives behind set up Grameen bank To provide credit facilities to as many low income and unemployed people As possible, to improve the quality of their livesAnd, to give them the opportunity to live Social Revolution
    7. 7. Recognition He has received more than seventy-seven (77) awards for his contribution to society & mankindAustralia @ 1998: Sydney Peace Prize, by the Sydney Peace Foundation Jordan @ 2000: King Hussein Humanitarian Leadership Award, by King Hussein Foundation UK @ 2003: World Technology Network Award Nobel Peace Prize in 2006 with joint of Grameen Bank
    8. 8. Conti…… Spain @ 2005:Foundation of Justice USA @ 2006: Global Citizen of the Year Award, by Patel Foundation for Global Understanding Germany @ 2007: Vision Award by Global A Bona fide Visionary
    9. 9. Purpose of Book“To tell the story of Grameenbank to every one and tomotivate people to join thosewho believe in the possibility ofcreating poverty free world andhave decided to work for it.”
    10. 10. MF and SB: two approaches successfullytested by Yunus Microfinance and Social Business combine technical and social innovation and use the strengths of the market economy for the benefit of the fight against poverty.  MF and SB follow a business model to ensure their sustainability and development, but their core mission is social.  Beyond the techniques used, the goal of MF and SB is to give back their dignity to poor people  In contact with reality, innovative solutions have been invented that need to be adapted to local conditions.  Address the risk of mission drift –
    11. 11. The Poor in Bangladesh before Yunus Did not have enough life survival things to feed his/her familyPoor in Bangladesh involved in Small Business—i.e., EntrepreneursOutside of the Formal Banking SystemNo Access to Loans or CreditNo Collateral Credit is a Powerful Weapon
    12. 12. What is Grameen Grameen is a Self-help organization,is not a bank. Grameen is all aboutpersonal and economic development, andwhere is development there is change.People improves their lives, their liveschange, and suddenly the situation is fluid.The change which occurs is not a victoryover another person, but over theconfidence of abject poverty. And ,Improving one’s living standard is intrinsicto the process of change. It’s not people who aren’t credit worthy. It’s bank that aren’t people worthy
    13. 13. Vision and Mission of Grameen Bank Mission To inculcate the sprit of savings access loans and utilize the Money a sustainable basis Vision A strong microfinance institute ready to take on the challenges of every day life for all members mainly improvement of their well Unknowingly, He Believe in KISS Formula
    14. 14. Introduction to Micro-Lending: HistoryHow did all start? On the field in Jobara village (near to Chittagong) with his college students, Prof. Yunus saw that even poor people and women need loans. They can have activities and can repay. Therefore, he set up financial institutions with a social mission. Listen to the needs and constraints of the excluded & offer them adapted financial tools to empower themselves (solidarity groups). Sufia Begum Khatun, 26 Dollars
    15. 15. Working Principal of Grameen Bank ―Conventional banks ask their clients tocome to their office. It’s a terrifying place forthe poor and illiterate. … The entire GrameenBank system runs on the principle thatpeople should not come to the bank, thebank should go to the people. … If any staffmember is seen in the office, it should be takenas a violation of the rules of the GrameenBank. … It is essential that [those setting up anew village Branch] have no office and no Bicycleplace to stay. The reason is to make us as
    16. 16. How to Finance to Rural Poor In 1978, He attended a seminar, which was organized by Central bank US experts view: Lending to the poor setting up interest rate at a higher level. Yunus View: If you lend to farmers, they would borrow regardless of what interest you charge. “I would pay formers a negative interest rate. I would lend them 100 taka, and if a former returned 90 to me, then I would forgive for repayment of the 10 taka. The real problem with lending to formers is getting the principal back, not interest rate. “
    17. 17. Grameen Bank Lending Model Group: 5 Members ( Self-formed and group approved all loans request) Center : 4 to 8 Groups Center Meeting : Weekly Center Manger : Grameen Bank Employee Center Chief : A member ( Female) Loan request & Saving Deposit : At centre Loan Distribution : At Bank Branch If one member default, then no more loan to group Group members collectively responsible for loan Training program also available No Legal Instruments & No Collateral
    18. 18. The Repayment MechanismOne year loansEqual weekly installmentsRepayment starts one week after the loanInterest rate of 20%Repayments amount to 2% per week for fifty weeksInterest payment amounts to 2 taka per week for a 1000 taka loanContribute to the Group Fund = 5% of Loan Amount No Judiciary in seeking repayment of loans
    19. 19. Why Lend to Women rather than to Men Bangladesh is gender-baised. Credit given to women brought faster changes in house hold than men. Given the smallest opportunity, women putted extra effort to get out from poverty. Destitute women adapted quicker and better to self-help process than men. Women have more self-exploration and self- discover attitude than men 94 % borrowers of Grameen Bank
    20. 20. Grameen Bank Workers Women Men Recruited Locally Recruited Nationally At a time when they No such type offinished their studies Condition Involved Either are waiting to Does not matter be married about marital status Preference to those, No such type of whose husband is condition involved Jobless Age: Not more than 27 years / Qualification: PG with B grade.
    21. 21. 16 Decisions We shall follow and advance the four principles of Grameen Bank- Discipline, Unity, Courage and Hard work – in all walks of out lives Prosperity we shall bring to our families We shall not live in Rundown houses. We shall repair our houses and work towards constructing new houses at the earliest We shall grow Vegetables all the year round. We shall eat plenty of them and sell the surplus During the Plantation seasons, we shall plant as many seedlings as possible
    22. 22. Conti… We shall plan to keep our Families small. Weshall minimize our expenditures. We shall lookafter our health We shall Educate our children and ensure thatthey can earn to pay for their education We shall always keep our children and theEnvironment clean. We shall build and use pit-latrines We shall Drink water from tubewells. If it is notavailable, we shall boil water or use alum We shall not take any Dowry at our sonsweddings, neither shall we give any dowry at our
    23. 23. Conti… We shall not inflict any Injustice on anyone,neither shall we allow anyone to do so. We shall collectively undertake BiggerInvestments for higher incomes. We shall always be ready to Help Each Other.If anyone is in difficulty, we shall all help him orher. If we come to know of any breach of Disciplinein any centre, we shall all go there and helprestore discipline. We shall take part in all Social Activities
    24. 24. Grameen Bank Success Story In 1976 Only a small single hut Students work as volunteers Number of borrowers = 42 women According to the book, it has now 1,181 branches & 11,777 employees Total Loans given $174.78 billion  2.4 Million Families in Rural Bangladesh have been served 98% repaid 95% borrowers are women 250 Institutes Around the World Operate on Grameen Bank Concept
    25. 25. A Comparison with Conventional Banks Conventional Banks Grameen BankPeople should come to the The Bank should go to the bank peopleStaff members work in-side Staff members work out-side the bank the bankSuccess of bank measured Success measured by the less by the repayment rate miserable and difficult lives of our borrowersNo visits at borrowers home Weekly and monthly visit at borrowers homeHere, Credit means Interest Grameen means Credit means TrustEven single penny loan has All millions of dollars loans have Govt. Banks Means Charity Organization for Rich legal cover no legal cover
    26. 26. Against the Mind-SetShariah Law: According to this law, ban on the charging the interest rate on lending. And, this law can not apply to Grameen bank, where a borrower is also the owner of the bankRumors that spread against the Grameen Bank Project Will convert you to Christianity Will steal your House and Property Will run away with your money  Is a part of international smuggling ring Wants to destroy Islam by taking women out of Purdah Managers always run behind women
    27. 27. Map of Grameen Bank’s Zones TANGAI L DHAK A CHITTAGOA NG
    28. 28. Birth of Grameen Separate Corporate EntityIn 1982, He met with Mr. Muhith in BRDA during future option for Grameen Bank Project In new Govt. Mr. Muhith became finance ministerMr. Muhith took proposal directly to the president after facing strong opposition from the all chief-ecxecutives of Govt. owned bank in a central bank meetingAnd end of September 1983, president had signed the proclamation and Grameen bank
    29. 29. Hierarchical Structure of Grameen Bank Zones Areas Branches Centers Groups Zonal Manager & Zonal Office Has to be done Actual Operations
    30. 30. Ownership Structure of Grameen Bank Yunus Muhith Preside In 1985 Wante Reserv nt d ed Approv edBorrow 60 % 40 % 40 % 75 % ersGovern Muhith told to Yunus this only one way to get Bank 40 % 60 % 60 % 25 %
    31. 31. Learning’s of Group  The strength of women is far greater than our imaginationSmile Girls Smile Fortune @ bottom of pyramid  Small is Big Work life Balance Worst situation could be turn in to better situation  Utilitarianism :An action is right if it tends to produce, the greatest amount of good for the greatest number of people. They will Change the Country Change the Attitude of People,
    32. 32. Why Others should be Read this Book From Social Perspective Muhammad Yunus has faith "If you have given tools to the people, and they use with their natural abilities and their curiosity, they will develop things in ways that will surprise you very much beyond what you might have From Business Perspective expected‖ ―Today, The brand Grameen has 4 profit companies and 13 organization. It is all result of strong social image of brand Grameen. Unlike many other companies, brand Grameen totally concern about human well-being rather than
    33. 33. The Grameen Family of Companies For ProfitGrameen Bank……………………………………………1983Gonoshasthyaya Grameen Textile………………………..1995Grameen Cyber net……………………………………….1996Grameen Phone …………………………………………..1996 Not for ProfitGrameen bankBangladesh, 13 non profit organizations, In also has Grameen is Like as TATA
    34. 34. Critique Book Quality  mostly focuses on micro-credit and the Grameen Bank  well-written  quality is derived from the content His points:  Well argued and effective  Uses individual examples  Uses statistics to better grasp the context Contribution to the field  It ―is‖ the field to micro lending  Relations with World leaders ensure field development Negative atitude towards Govt. banks and its employees
    35. 35. A Special Request to Our Friends ―There is one thing [I don’t like about Grameen] . I used to enjoy beating my wife. But the Group came to me and argued with me and shouted at me. Who gave them the right to shout at me? The borrowing group threatened they will get really mean if I beat my wife again‖ ( Husband of borrower to Muhammad Yunus ) “Hence, Keep your Life Partner away from this book, because. Immediate after from reading this book, she will be able to get an idea, how to get more money from you. Eventually, You will lose control over your Life Partner”
    36. 36. Stake Holders in this Presentation Muhammad Yunus Alan Jolis Anant Kumar Chaudhary Hemant Singh Katiyar Manish Singh Shailesh Kumar AgrawalAnd, Poorer of Bangladesh and Grameen Bank Staff Thank You all my Classmates for Paying Attention
    37. 37. I strongly believe that we can create apoverty-free world, if we want to.... In that kindof world, [the] only place you can see povertyis in the museum. When school children will beon a tour of the poverty museum, they will behorrified to see the misery and indignity ofhuman beings. They will blame theirforefathers for tolerating this inhuman conditionto continue in a massive way.... —Muhammad Yunus Sufia Begum Khatun & Jobra Village