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Muhammad Yunus & His Microcredit
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Muhammad Yunus & His Microcredit Presentation Transcript

  • 1. Muhammad Yunus & His Microcredit Wesley Shu National Central University IM Department
  • 2. His Life
    • 1940 born in Bangladesh
    • In 2006, Yunus and Grameen bank were jointly awarded the Nobel Peace Prize
    • Ph.D. in Economics, Vanderbilt University
    • 1972 returned to Bangladesh
    • 1974 Famine in Bangladesh
    • His first loan consisted of US$27 from his own pocket to 42 women, one of them made bamboo furniture sold for 2 ¢ each to the lender.
  • 3. Grameen Bank
    • Established in 1976, means Village
    • has issued more than US$ 5.1 billion to 5.3 million borrowers
    • Repayment rate: 95%
    • Interest rate: 16%
    • 50% borrowers out of poverty
    • Of the total equity of the bank, the borrowers own 94%, and the remaining 6% is owned by the Government of Bangladesh.
  • 4. Critical Success Factors
    • Loan to women (96%) - often benefit the whole family than loans to men do
    • Loan to groups ( solidarity groups ) - apply together for loans and its members act as co-guarantors of repayment
    • 16 decisions
    • Way of operation
  • 5. Operations of Grameen Bank
    • A group of five
    • At first, only two are eligible for 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.
    • the whole group is denied further credit if one person defaults.
    • Group pressure is the collateral.