social entrepreneurship and microfinance
TRANSCRIPT
Social Entrepreneurship OverviewMircofinance and Outcomes of the Grameen Bank
Ozan KaraPhD Mechanical Engineering 20132035
Economics
EntrepreneurshipSocial Entrepreneurship
Boundaries
Social Business Models Microfinance
The mind-set in order to
maximize profit and ventures
growth maximization and economic prosperity
Lower unemployment
Rates Increase tendency to
adopt innovationAccelerated
Structural Changes in the Economy
InspirationCreative SolutionsDirect ActionCourage
Primacy of the social benefit
SOCIAL ENTREPRENEURSHIP Financially Independent
Self- SufficientSustainable
Stable but Unjust
Equilibrium
Opportunity in this unjust equilibrium
Advance a new stable
equilibrium
BOUNDARIES: Social Entrepreneur Operates Social & Commercial Organanizations
• Revenues and profits generated are used only to further improve the
delivery of social values
• The founders & investors can benefit from personal
monetary gain
SOCIAL BUSINESSModels
• create economic wealth
• spurred on by money
• Fullfill Social Requirements• driven by altruism
Academic
Studies
Credit: Ozan Kara
Credit: Ozan Kara
7,000 microfinance institutions, serving some 16 million poor people in developing countries (World Bank estimates)
500 million households benefit from these small loans Credit: Ozan Kara
QuickSmall Scale Reliable Stable Way
— Street vendors— Trades people— Services providers— Small farmers— Fishermen— Herders
• Offers stable financial returns over the economic cycle
• Low loan portfolio default rates • Potentially low correlations
to mainstream capital markets.
FROM VILLAGE TO GLOBAL SUCCESS
The first micro-loan: USD 27 to a group of 42 people96.6% of whom are female
70% of the families have crossed the poverty line2006 Nobel Peace Prize: «efforts to create economic and social development from below»
Grameen Bank - Introduction
• To promote financial independence among the poor
• Eliminate the exploitation of poor by money landers
• Create opportunities for self-employement
• High payback rates—over 98 percentLow income
Injection of credit
investment
More income, More savings,
More investments,
Low income
Low saving
Low investment
Grameen Bank – 16 Decisions
1.Four main principles – discipline, unity, courage and hard work2.Prosperity to the family3.Repair/construct own shelter4.Plant vegetables5.Plant many seedlings during planting season6.Responsible parenthood7.Self-support – child education8. Clean environment
9. Pit latrines10. Potable drinking water11. No to dowry and child marriage12. No to violence and abuse13. Collective business undertakings14. Helping one another15. Restore discipline16. Collective social activities
Grameen Bank – Credit Operation Model
• “Solidarity Lending” (over 43 countries)• each borrower must belong to a five-member group
• not required to give any guarantee for a loan to its member
• repayment responsibility solely rests on the individual borrower
• Access to credit: group lending system & weekly-installment payment
• Individual's initiative to break through the cycle of poverty
• No legal instrument between Grameen Bank and its borrowers
Grameen Bank – Credit Operation Model
Grameen Bank - Operation
• Exclusive focus on the poorest of the poor• Priority for credit increasingly given to women
• Delivery system in sync with the socio-economic needs of the poor
• Small homogeneous groups• Primary groups of 5 members which are federated into centres
• Centres functionally linked to the Grameen Bank
• Group Based System • Poorest
Grameen Bank - Operation
• Small loan amounts without collateral• Repayment: Weekly installments spread over a year
• Loan eligibility depends on past credit history
• Close supervision of credit
• Flexible returns • Transparancy• Supervision
Grameen Bank - Operation
• Simultaneous undertaking of social development agenda• Raise social and political consciousness of the newly organized groups
• Monitor social and physical infrastructure projects
• Consciousness • Encourage for Infrastructure
Grameen Bank – Credit Types
• Expansion of loan portfolio to meet the needs of the poor• Credit for building latrines• Credit for installing tube-wells• Credit for seasonal cultivation• Credit for joint enterprises of the group and the centre
• Finance projects undertaken by family of borrower
Grameen Bank – Credit Delivery System
• Loans paid off at death
• Loan insurance is extended to husbands with additional deposits
• Outstanding amount of loan paid-off if husband dies
Grameen Bank – Indicators• Additional income: Vegetabke garden, fruit bearing trees
• Clothing: Daily use, Warm for winter, blankets sweaters etc.
• Sleeping bed instead of on the floor w/ tin roof house
• Drinking pure water • Sanitary latrine• Adequate healthcare• Basic education to children - over 6 years of age
• Minimum weekly loan installment ≥ 200 Tk.
• Annual savings of Tk. 5,000
Grameen Bank – Other Programs
Village Phone Program
women entrepreneurs can start a business providing wireless payphone service in rural areas of Bangladesh
International Finance Coorp.World Bank Group
Struggling Members Program - Beggars
• Rules of banking are not applied • The loans are completely interest-
free, • The repayment period can be
arbitrarily long • The borrower is covered under life
insurance free of cost
Beggar taking a small loan of around US $1.50 can pay only 3.4 US cents per week. 0.023 of the loan
Grameen Group
• Grameen Trust• Grameen Fund• Grameen Communications• Grameen Shakti (Grameen Energy) • Grameen Telecom • Grameen Shikkha (Grameen Education) • Grameen Motsho (Grameen Fisheries)• Grameen Baybosa Bikash (Grameen Business Development)
• Grameen Phone,Grameen Software Limited• Grameen CyberNet Limited• Grameen Knitwear Limited
Where is the Grameen Space?
SGAC IAFIAAIISLISUNASAESAAIAAISS
…
LUNAR MISSION ONE
MARS ONE
Always Imagine for the World!
All videos:
https://www.youtube.com/watch?v=jk5LI_WcosQhttps://www.youtube.com/watch?v=9vZXIVg_uqYhttps://www.youtube.com/watch?v=VcYwtEToZfQ
Hawking Zero G Flighthttps://www.youtube.com/watch?v=0VJqrlH9cdI
