dr.muhammod yunus

8/2/2019 Dr.Muhammod Yunus

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Table of Contents:

Sl No. Descriptions Page No.

1.0 Executive Summary 1

2.0 Definition of Entrepreneurship 2

Introduction toEntrepreneurship

BUMGT5921

Presented By:

ASSINGMENT # 01BY:

MOHAIMIN UL JOBAIR

BIMbinary university college

Date of Submission: 2 april, 2012

Subject:

Bibliography of an Entrepreneur

Dr. prof. Muhammod YunusFounder of GRAMEEN BANK

dhaka, bangladesh.

Bibliography of anEntrepreneur


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2.1 Types of Entrepreneurs 2

2.2 Social Entrepreneur 2-3

2.3 Seven Principles of Social Business 3

2.4 Serial entrepreneur 3

2.5 Lifestyle Entrepreneur 4

3.0 A successful Entrepreneur & Critical Analyze 5-6

3.1 Achievement of Dr. Muhammod Yunus 7

3.2 Scholarships / Fellowships 7

3.3 Professional Experiences 7

3.4 Membership of Committees and Commissions (National) 7-8

4.0 A Short History of Grameen Bank 9-10

5.0 Micro Credit Delivery System at Grammen Bank 10

5.1 Owned by the Poor 11

5.2 No Collateral, No Legal Instrument, No Group-Guarantee or Joint Liability 11

5.3 97 per cent Women 115.4 Branches 11

5.5 Over Tk 684 billion Disbursed 11-12

5.6 Recovery Rate Over 97 per cent 12

5.7 100 per cent Loans Financed From Banks Deposits 12

5.8 Borrower-Deposits Keep Growing 125.9 No Donor Money, No Loans 13

5.10 Earns Profit 13

6.0 Create Wealth in the Real World 14

6.1 Revenue and Expenditure 146.2 30% Dividend for 2010 146.3 Low Interest Rates 14-156.4 Deposit Rates 156.5 Beggars As Members 156.6 Basic features of the programme are 15-166.7 Housing for the Poor 166.8 Micro-enterprise Loans 176.9 Scholarships 17

6.10 Education Loans 177.0 Growth of Grameen Bank & Foundation 18-19

8.0 Rapid Growth of Gameen Bank 20

9.0 From Grameen I to Grameen II 21

10 The main elements of Grameen II are 21-22-23

11 Features of Grameen Bank II 23

12 Analysis of the Criticism of the Grameen Bank 24-25

13 An Entrepreneur became threat of Local Goverment 26-27

14 Implementation & evaluate strategies 28-29


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15 The future of the Grameen Bank 30

16 Conclusion 31

17 References 32

Executive Summary

Professor Dr. Muhammad Yunus is a Bangladeshi banker and economist. He is thedeveloper and founder of the concept of microcredit, the extension of small loans toentrepreneurs too poor to qualify for traditional bank loans. Yunus is also the founder ofGrameen Bank. In 2006, they were jointly awarded the Nobel Peace Prize, "for theirefforts to create economic and social development from below.

The Grameen Bank (in Bengali, Grameen means rural) which Dr. Yunus has built overthe last 22 years is today the largest rural bank in Bangladesh. It has over 2 million

borrowers and works in 35000 villages in a country of 68000 villages. 94% of itsborrowers are women. The bank is based on simple, sensible rules, meticulousorganization, imagination and peer pressure among borrowers. The break thatGrameen Bank offers is a collateral-free loan, sometimes equivalent to just a few U.S.dollars and rarely more than $100. In rural areas, it makes things happen. 98% of itsloans are honored. Thus he has turned into reality a philosophy that the poorest of thepoor are the most deserving in the land and that given the opportunity they can liftthemselves out of the mire of poverty. His ideas combine capitalism with socialresponsibility.

Micro-credit concept is now being practiced in 58 countries. In the US, it is a success

even with the Shifting poor of Chicago's toughest districts. The United States alone hasover 500 Grameen spin-offs. Bill Clinton said in his election campaign that Yunusdeserved a Nobel Peace Prize and cited the Experiment of Dr. Yunus as a model forrebuilding the inner cities of America. Pilot projects are starting in Britain. The methodsare adapted to suit local conditions, but the principle of empowering individuals withtheir own capital is the same.

Definition of Entrepreneurship

Entrepreneurship is more than simply starting a business. The definition ofentrepreneurship is a process through which individuals identify opportunities, allocateresources, and create value. This creation of value is often through the identification ofunmet needs or through the identification of opportunities for change.


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Entrepreneurs see problems as opportunities, then take action to identify thesolutions to those problems and the customers who will pay to have those problemssolved.Entrepreneurial success is simply a function of the ability of an entrepreneur to seethese opportunities in the marketplace, initiate change (or take advantage of change)

and creates value through solutions.

Types of entrepreneurs

The literature has distinguished among a number of different types of entrepreneurs, forinstance:

Social EntrepreneurSerial EntrepreneurLifestyle Entrepreneur

Social Entrepreneur

A social entrepreneur is motivated by a desire to help, improve and transform social,environmental, educational and economic conditions. Key traits and characteristics ofhighly effective social entrepreneurs include ambition and a lack of acceptance of thestatus quo or accepting the world "as it is". The social entrepreneur is driven by anemotional desire to address some of the big social and economic conditions in theworld, for example, poverty and educational deprivation, rather than by the desire forprofit. Social entrepreneurs seek to develop innovative solutions to global problems thatcan be copied by others to enact change.

Social entrepreneurs act within a market aiming to create social value through theimprovement of goods and services offered to the community. Their main aim is to helpoffer a better service improving the community as a whole and are predominately run asnonprofit schemes. Zahra et al. (2009: 519) said that social entrepreneurs makesignificant and diverse contributions to their communities and societies, adoptingbusiness models to offer creative solutions to complex and persistent social

problems.

Seven Principles of Social Business:

1. Business objective will be to overcome poverty, or one or more problems (suchas education, health, technology access, and environment) which threatenpeople and society; not profit maximization

2. Financial and economic sustainability3. Investors get back their investment amount only. No dividend is given beyond

investment money


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4. When investment amount is paid back, company profit stays with the companyfor expansion and improvement

5. Environmentally conscious6. Workforce gets market wage with better working conditions7. ...do it with joy

Serial Entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and starts newbusinesses. In the media, the serial entrepreneur is represented as possessing a higherpropensity for risk, innovation and achievement. Serial entrepreneurs are more likely toexperience repeated entrepreneurial success. They are more likely to take risks andrecover from business failure.

Lifestyle Entrepreneur

A lifestyle entrepreneur places passion before profit when launching a business in orderto combine personal interests and talent with the ability to earn a living. Manyentrepreneurs may be primarily motivated by the intention to make their businessprofitable in order to sell to shareholders. In contrast, a lifestyle entrepreneurintentionally chooses a business model intended to develop and grow their business inorder to make a long-term, sustainable and viable living working in a field where theyhave a particular interest, passion, talent, knowledge or high degree of expertise. Alifestyle entrepreneur may decide to become self-employed in order to achieve greaterpersonal freedom, more family time and more time working on projects or businessgoals that inspire them.

A successful Entrepreneur & Critical Analyze:

Biography of Dr. Prof. Muhammad Yunus The Founder of Grameen Bank one mostsuccessful entrepreneur of Bangladesh and well known for his micro lending process &implementation in the real world.


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Professor Muhammad Yunus established the Grameen Bank in Bangladesh in 1983,fueled by the belief that credit is a fundamental human right. His objective was to helppoor people escape from poverty by providing loans on terms suitable to them and byteaching them a few sound financial principles so they could help themselves.

From Dr. Yunus' personal loan of small amounts of money to destitute basket weavers

in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of aburgeoning world movement toward eradicating poverty through micro lending. Replicasof the Grameen Bank model operate in more than 100 countries worldwide.

Born in 1940 in the seaport city of Chittagong, Professor Yunus studied at DhakaUniversity in Bangladesh, and then received a Fulbright scholarship to study economicsat Vanderbilt University. He received his Ph.D. in economics from Vanderbilt in 1969and the following year became an assistant professor of economics at MiddleTennessee State University. Returning to Bangladesh, Yunus headed the economicsdepartment at Chittagong University.

From 1993 to 1995, Professor Yunus was a member of the International Advisory Groupfor the Fourth World Conference on Women, a post to which he was appointed by theUN secretary general. He has served on the Global Commission of Women's Health,the Advisory Council for Sustainable Economic Development and the UN Expert Groupon Women and Finance.

Professor Yunus is the recipient of numerous international awards for his ideas andendeavors, including the Mohamed Shabdeen Award for Science (1993), Sri Lanka;


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Humanitarian Award (1993), CARE, USA; World Food Prize (1994), World Food PrizeFoundation, USA; independence Day Award (1987), Bangladesh's highest award; KingHussein Humanitarian Leadership Award (2000), King Hussien Foundation, Jordan;Volvo Environment Prize (2003), Volvo Environment Prize Foundation, Sweden; Nikkei

Asia Prize for Regional Growth (2004), Nihon Keizai Shimbun, Japan; Franklin D.

Roosevelt Freedom Award (2006), Roosevelt Institute of The Netherlands; and theSeoul Peace Prize (2006), Seoul Peace Prize Cultural Foundation, Seoul, Korea. He isa member of the board of the United Nations Foundation.

Achievement of Dr. Muhammod Yunus:

The most respected achievement that Dr.Professor Muhammad Yunus, was awardedthe Nobel Prize for Peace in 2006.

Scholarships / fellowships:

1. Awarded Fulbright Fellowship to study in the U.S.A. for 1965-66.2. Awarded Vanderbilt University research and teaching fellowships during 1966-69.

3. Awarded Eisenhour Exchange Fellowship for 1984.4. Senior Fellow, The Institute of Mediterranean Studies,Universita della Svizzera

Italiana, Lugano, Switzerland (2000 - Present).

Professional Experiences:

1962-65 : Lecturer of Economics, Chittagong College, Bangladesh1969-72 : Assistant Professor of Economics, MTSU, Tennessee, USA

1972(July-Sept) : Deputy Chief, General Economics Division, Planning Commission,Government of Bangladesh.

1972 - 75 :Associate Professor of Economics and Head of the Department ofEconomics, Chittagong University, Bangladesh

1975 - 1989 :Professor of Economics, Chittagong University and Director, RuralEconomics Program, Chittagong, Bangladesh

1976 - 1983 : Project Director, Grameen Bank Project, Bangladesh1983 - 2011 : Managing Director, Grameen Bank, Bangladesh1996(April-June)

:Cabinet Minister (Advisor) in the Caretaker Government ofBangladesh.

Membership of Committees and Commissions (National):

1981 :Member, National Committee on Population Policy set up by the Presidentof Bangladesh.

1982 :Member, Land Reform Committee, set up by Chief Martial Law

Administrator, headed by the Minister of Agriculture.1987-88 : Member, Education Commission, Government of Bangladesh.


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1989-90 : Appointed as the Chairman of the Socio-economic Committee of theNational Disaster Prevention Council set up by the President ofBangladesh.

1989 :Member of the Task Force for reviewing the operation of the NationalizedCommercial Banks, Bangladesh.

1991 : Appointed as the Convener of the Task Force on Self-Reliance set up bythe Planning Advisor.

2001 :Member of the National ICT Task Force Committee, Ministry of Planning,Bangladesh.

A Short History of Grameen Bank:

Grameen Bank (GB) has reversed conventional banking practice by removing the needfor collateral and created a banking system based on mutual trust, accountability,participation and creativity. The origin of Grameen Bank can be traced back to 1976

when Professor Muhammad Yunus, Head of the Rural Economics Program at theUniversity of Chittagong, launched an action research project to examine the possibilityof designing a credit delivery system to provide banking services targeted at the ruralpoor. The Grameen Bank Project Grameen means "rural" or "village" in Banglalanguage came into operation with 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 unemployedpeople 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 bythemselves;

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

As of October, 2011, it has 8.349 million borrowers, 97 percent of whom are women.With 2,565 branches, GB provides services in 81,379 villages, covering more than 97percent of the total villages in Bangladesh.

Grameen Bank's positive impact on its poor and formerly poor borrowers has been

documented in many independent studies carried out by external agencies including theWorld Bank, the International Food Research Policy Institute (IFPRI) and theBangladesh Institute of Development Studies (BIDS).The action research demonstrated its strength in Jobra (a village adjacent to ChittagongUniversity) and some of the neighboring villages during 1976-1979. With thesponsorship of the central bank of the country and support of the nationalizedcommercial banks, the project was extended to Tangail district (a district north ofDhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project


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was extended to several other districts in the country. In October 1983, the GrameenBank 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 Bankown 90% of its shares, while the remaining 10% is owned by the government.

Micro Credit Delivery System at Grameen Bank:

Grameen Bank Credit Delivery means taking credit to the very poor in their villages bymeans of the essential elements of the Grameen credit delivery system.Grameen Bank credit delivery system has the following features:

There is an exclusive focus on the poorest of the poor.

Borrowers are organized into small homogeneous groups.

Special loan conditionalitys which are particularly suitable for the poor.

Simultaneous undertaking of a social development agenda addressing basicneeds of the clientele.

Design and development of organization and management systems capable ofdelivering program resources to targeted clientele.

Expansion of loan portfolio to meet diverse development needs of the poor.

October 13, 2006 was the happiest day for Bangladesh. It was a great moment for thewhole nation. Announcement came on that day that Grameen Bank and I received theNobel Peace Prize, 2006. It was a sudden explosion of pride and joy for everyBangladeshi. All Bangladeshi's felt as if each of them received the Nobel Peace Prize.We were happy that the world has given recognition through this prize, that poverty is athreat to peace. Grameen Bank, and the concept and methodology of micro-credit that ithas elaborated through its 30 years of work, have contributed to enhancing the chances

of peace by reducing poverty. Bangladesh is happy that it could contribute to the worlda concept and an institution which can help bring peace to the world.

Owned by the PoorIt is owned by the poor borrowers of the bank who are mostly women. It worksexclusively for them. Borrowers of Grameen Bank at present own 95 percent of the totalequity of the bank. Remaining 5 per cent is owned by the government.

No Collateral, No Legal Instrument, No Group-Guarantee or Joint Liability

Grameen Bank does not require any collateral against its micro-loans. Since the bank

does not wish to take any borrower to the court of law in case of non-repayment, it doesnot require the borrowers to sign any legal instrument. Although each borrower mustbelong to a five-member group, the group is not required to give any guarantee for aloan to its member. Repayment responsibility solely rests on the individual borrower,while the group and the center oversee that everyone behaves in a responsible way andnone gets into repayment problem. There is no form of joint liability, i.e. group membersare not responsible to pay on behalf of a defaulting member.


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97 per cent Women

Total number of borrowers is 8.35 million, 96 per cent of them are women.Branches

Grameen Bank has 2,565 branches. It works in 81,379 villages. Total staff is 22,124

Over Tk. 684 billion disbursed

Total amount of loan disbursed by Grameen Bank, since inception, is Tk. 684.13 billion(US $ 11.35 billion). Out of this, Tk. 610.81 billion (US $ 10.11 billion) has been repaid.Current amount of outstanding loans stands at TK 73.32 billion (US $ 968.31 million).During the past 12 months (from November10 to October'11) Grameen Bank disbursedTk. 107.30 billion (US $ 1480.53 million). Monthly average loan disbursement over thepast 12 month was Tk. 8.94 billion (US $ 123.38 million). Projected disbursement foryear 2011 is Tk. 110.00 billion (US$ 1557.63 million), i.e. monthly disbursement of Tk.

9.17 billion (US $ 129.80 million). End of the year outstanding loan is projected to be atTk. 78.00 billion (US $ 1105 million).

Recovery Rate Over 97 per cent

Loan recovery rate is 96.67 per cent.

100 per cent Loans Financed From Banks Deposits

Grameen Bank finances 100 per cent of its outstanding loan from its deposits. Over 56per cent of its deposits come from banks own borrowers. Deposits amount to 145 percent of the outstanding loans. If we combine both deposits and own resources itbecomes 160 per cent of loans outstanding.

Borrower-Deposits Keep Growing

Besides building financial strength of the poor women by encouraging them to build upsignificant amount of personal savings, borrower deposit is also a very importantelement in Grameen Bank. Forty-two per cent of the branches have borrower depositsequal to 75 per cent or more of outstanding loans of the branches.

One-fifth of the branches have more borrower-deposits than the amount of loansoutstanding. In some branches borrower-deposits are as high as 50 per cent above theoutstanding loans. In eight zones, out of forty, borrower deposits are equal or more thanthe outstanding loans in zones.

No Donor Money, No Loans

In 1995, Bank decided not to receive any more donor funds. Since then, it has notrequested any fresh funds from donors. Last installment of donor fund, which was in the


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pipeline, was received in 1998. GB does not see any need to take any donor money oreven take loans from local or external sources in future. GB's growing amount ofdeposits will be more than enough to run and expand its credit program and repay itsexisting loans.

Earns Profit

Ever since Grameen Bank came into being, it has made profit every year except in1983, 1991, and 1992. It has published its audited balance-sheet every year, audited bytwo internationally reputed audit firms of the country.

Create wealth in the real world:

Revenue and Expenditure

Total revenue generated by Grameen Bank in 2010 was Tk. 17.74 billion (US $

252.05 million). Total expenditure was Tk. 16.98 billion (US $ 241.29 million).

Interest payment on deposits of Tk. 9.23 billion (US $ 131.09 million) was thelargest component of expenditure (54 per cent).

Expenditure on salary, allowances, and pension benefits amounted to TK. 4.64billion (US $ 65.92 million), which was the second largest component of the totalexpenditure (27 per cent).

Grameen Bank made a profit of Tk. 757.24 million (US $ 10.76 million) in 2010.

30% Dividend for 2010

Grameen Bank has declared 30% cash dividend for the year 2010. This is thehighest cash dividend declared by any bank in Bangladesh in 2010.Highestrecord of dividend declared by Grameen Bank was in 2006.

It was 100%.The bank has also created a Dividend Equalization Fund to ensuredistribution of dividends without much fluctuation in successive years .Receivingof dividends each year greatly inspires our shareholders, 97% of whom are ourborrowers.

Low Interest Rates

Government of Bangladesh has fixed interest rate for government-run microcredit

programs at 11 per cent at flat rate. It amounts to about 22 per cent at declining basis.Grameen Bank's interest rate is lower than government rate.

There are four interest rates for loans from Grameen Bank: 20% for income generatingloans, 8% for housing loans, 5% for student loans, and 0% (interest-free) loans forStruggling Members (beggars). All interests are simple interest, calculated on decliningbalance method. This means, if a borrower takes an income-generating loan of say, Tk.1,000, and pays back the entire amount within a year in weekly installments, she'll pay a


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total amount of Tk. 1,100, i.e. Tk. 1,000 as principal, plus Tk. 100 as interest for theyear, equivalent to 10% flat rate.

Deposit Rates

Grameen Bank offers very attractive rates for deposits. Minimum interest offered is 8.5per cent. Maximum rate is 12 per cent.

Beggars as Members

Begging is the last resort for survival for a poor person, unless he/she turns into crimeor other forms of illegal activities. Among the beggars there are disabled, blind, andretarded people, as well as old people with ill health. Grameen Bank has taken up aspecial program in 2002, called Struggling Members Program exclusively for thebeggars. Over 111,296 beggars have joined the program. Total amount disbursedstands today at Tk. 162.60 million. Of this amount of Tk. 130.89 million (80% of the

amount disbursed) has already been paid off.

19,678 beggars have left begging and are making a living as door-to-door salespersons. Among them 10,185 beggars have joined Grameen Bank groups as main-stream borrowers.

Beggars members have voluntarily opened their personal savings accounts.Cumulative deposit in these savings accounts amounts to BDT 22.41 million; presentbalance stands at BDT 8.08 million.

Basic features of the program are:

1. Existing rules of Grameen Bank do not apply to beggar members; they make uptheir own rules.

2. All loans are interest-free. Loans can be for very long term, to make repaymentinstallments very small. For example, for a loan to buy a quilt or a mosquito-net,or an umbrella, many borrowers are paying Tk. 2.00 (3.4 cents US) per week.

3. Beggar members are covered under life insurance and loan insurance programswithout paying any cost.

4. Groups and centers are encouraged to become patrons of the beggar members.5. Each member receives an identity badge with Grameen Bank logo. She can

display this as she goes about her daily life, to let everybody know that she is aGrameen Bank member and this national institution stands behind her.

6. Members are not required to give up begging, but are encouraged to take up anadditional income-generating activity like selling popular consumer items door todoor, or at the place of begging.

Objective of the program is to provide financial services to the beggars to help them finda dignified livelihood send their children to school and graduate into becoming regular


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Grameen Bank members. We wish to make sure that no one in the Grameen Bankvillages has to beg for survival.

Housing for the Poor

This program was awarded Aga Khan International Award for Architecture in 1989.Maximum amount given for housing loan is Tk. 25,000 (US $ 354) to be repaid over aperiod of 5 years in weekly installments. Interest rate is 8 per cent. 690,737 houseshave been constructed with the housing loans averaging Tk. 13,059 (US $ 181.50). Atotal amount of Tk. 9.02 billion (US $ 211.21 million) has been disbursed for housingloans. During the past 12 months (from Nov.'10 to October11) 4,482 houses have beenbuilt with housing loans amounting to Tk. 52.43 million (US $ 0.69 million).

Micro-enterprise Loans

Many borrowers are moving ahead in businesses faster than others for many favorable

reasons, such as, proximity to the market, presence of experienced male members inthe family, etc. Grameen Bank provides larger loans, called micro-enterprise loans, forthese fast moving members. There is no restriction on the loan size. So far 3,590923members took micro-enterprise loans. A total of Tk. 105.96 billion (US$ 1540.58 million)has been disbursed under this category of loans. Average loan size is Tk. 29,507 (US $389.69), maximum loan taken so far is Tk. 1.6 million (US $ 23,209). This was used inpurchasing a truck which is operated by the husband of the borrower. Power-tiller,irrigation pump, transport vehicle, and river-craft for transportation and fishing arepopular items for micro-enterprise loans.

Scholarships

Scholarships are given, every year, to the high performing children of Grameenborrowers, with priority on girl children, to encourage them to stay ahead to theirclasses. Up to October'11, scholarships amounting to Tk. 205.03 million (US$ 3.00million) have been awarded to 1, 33031 children. During 2011, US$ 592,849 will beawarded to about 24,611 children, at various levels of school and college education.

Education Loans

Students who succeed in reaching the tertiary level of education are given highereducation loans, covering tuition, maintenance, and other school expenses. ByOctober11, 49,588 students received higher education loans, of them 46,885 studentsare studying at various universities; 577 are studying in medical schools, 894 arestudying to become engineers, 1232 are studying in other professional institutions.

Growth of Grameen Bank & Foundation:

Grameen Bank does not own any share of the following companies in the Grameennetwork. Nor has it given any loan or received any loan from any of these companies.


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They are all independent companies, registered under Companies Act of Bangladesh,with obligation to pay all taxes and duties, just like any other company in the country.

1. Grameen Phone Ltd. (Telenor Bangladesh)2. Grameen Telecom

3. Grameen Communications4. Grameen Cybernet Ltd. ( Frist ISP of Bangladesh)5. Grameen Solutions Ltd.6. Grameen Information Highways Ltd.7. Grameen Bitek Ltd.8. Grameen Krishi Foundation9. Grameen Motsho (Fisheries) Foundation10. Grameen Uddog (Enterprise)11. Grameen Shamogree (Products)12. Grameen Knitwear Ltd.13. Grameen Shikkha (Education)

14. Grameen Capital Management Ltd.15. Grameen Byabosa Bikash (Business Promotion )16. Grameen Trust17. Grameen Health Care Trust18. Grameen Health Care Service Ltd.19. Grameen Danone Food Ltd.20. Grameen Veolia Water Ltd.21. Grameen Shakti.22. Grameen IT Park Ltd.23. Grameen Star Education Ltd.24. Grameen Employment Services Ltd.25. Grameen Fabrics and Fashion Ltd.26. Grameen Distribution Ltd.27. Grameen Shamogree Purbanchal Ltd.28. Grameen Shamogree Uttaranchal Ltd.29. BASF Grameen Ltd.

As per Grameen Bank reputation build up they create new companies to serve better, todo put responsibility towards to society, to create more employment, to give chancesurvive & show the talent though workforce. By these ways Grameen Bank does theirsocial responsibility & makes wealth in real world. Establish themselves one of top listedcompanies in Bangladesh.

Rapid growth of Gameen Bank:

The successes of the Grameen Bank of Bangladesh have led to rapid growth in fundingfor microfinance. For the time frame 1983-97, subsidy per person-year of membershipin Grameen was about $20, and subsidy per dollar-year borrowed was about $0.22. Bymeasure of consumer surplus for Grameen users, the evidence in the literature


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suggests that surplus probably exceeds subsidy. Grameenif not necessarily othermicro lenderswas probably a worthwhile social investment.

By the following graph we are able see the rapid growth of Grameen Bank since theproject starts. From 1976 to 2000 there growing level are increasing every year.

From Grameen I to Grameen II

The problems faced by Grameen Bank in the late 1990s led to its senior staff piloting anumber of experiments with new products and new ways of managing service provision.By early 2001 these had been consolidated and Professor Yunus announced the launchof Grameen II the replacement of the Banks earlier products by a new range ondifferent terms. The components of Grameen II were designed so that (i) they shouldmeet client demand, and (ii) they should be profitable for the Bank. Between March2001 and August 2002 all Grameens 1,200 branches were shifted from Grameen I toGrameen II products and systems. Accounts of this process and the practice andoutcomes of Grameen II are provided by Rutherford et al. (2006) and Dowla et al.

(2006)The main elements of Grameen II are:

1. A major focus on savings from members and the public. This includes voluntarysavings, term deposits and the Grameen Pension Scheme (GPS) a long-termsavings program.

2. The provision of flexible basic loans to members (rather than the standardizedGrameen I 12-month loans). These are for variable amounts, can be repaid over


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three to 36 months, have negotiable repayment schedules and interest rates aredetermined by loan type (size, length, grace period, etc.).

3. The abandonment of joint liability (and the idea of social collateral).4. A poverty-focused struggling members program, that provides small, subsidized

loans to beggars and encourages them to join Grameen Bank centers.

Grameen Bank Tower, Mirpur 2, Dhaka, Bangladesh.

The results have been staggering. The Bank has not only been able to stabilize itselfbut has, in effect, re-launched itself and its trajectory. While it took Grameen 25 years toreach a client base of 2.5 million, it took only three years, from 2001, to recruit the next2.5 million clients (Rutherford et al., 2006). Over the period 2002 to 2005 the Banktripled the deposits it held (US$478 million) and doubled its portfolio of outstandingloans. The Banks loans portfolio became smaller than its savings portfolio. It built up alarge fund for bad loan provision and profits rose from 60 million Taka in 2002 to 442million Taka (US$7 million) in 2005. This growth meant that physical expansion becameessential and the Bank opened 500 new branches, so that it had more than 1,700branches, by late 2005.

While the Bank still proclaims its mission of poverty reduction, my personal observationslead me to believe that its clientele is less economically deprived than was the case inthe 1980s and 1990s. This is partly because clients have done well (perhaps throughGrameen membership), and partly because of the product redesign and the drive forexpansion and profitability. Many of its clients would be classed as non-poor ormoderately poor by Bangladeshs official poverty line. A much smaller proportion isextremely poor (the targets for Grameen I over 1975 to 2000). The struggling members


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program is targeted at the extreme poor, but by December 2005 it had only 56,000clients, against more than 25 million extremely poor people in the country. Average loansize for these members was only $6 and their average savings were $1. While manypoor and extremely poor people may benefit indirectly from Grameen II (throughemployment, increased demand for products, greater availability of local level charity)

the struggling members program appears to be either failing or tokenistic.

Features of Grameen Bank II

Grameen Fund

Grameen Kalyan

Loans Paid Off At Death

Life Insurance

Deposits

Pension Fund for Borrowers

Loan Loss Reserve

Retirement Benefits Paid Out Telephone for Ladies

Getting Elected in Local Bodies

Computerized MIS and Accounting System

Policy For Opening New Branches

Crossing the Poverty-Line

'Stars' for Achievements

Analysis of the Criticism of the Grameen Bank:

Initially, its important to point out that the economy perspective, which should beapplied in a comparative way. Additionally, the ethnography would have to follow thewomen over a three to five year or even seven year period to get a full perspective onthe effect that micro lending. Finally, it may be that the Grameen Bank has anorganizational culture or structures that need to be changed, so the article may notrepresent a systemic critique of micro lending as a means for positive social change.

At Fixes, our focus is typically on implementing new or underutilized ideas to help thosein needs. But sometimes its just as important to protect institutions that are alreadyworking well. Which is today about the Grameen Bank, the Bangladeshi organizationthat won the 2006 Nobel Peace Prize, along with its founder Dr. Prof. MuhammadYunus, for its work extending microloans to some of the worlds poorest, and has beencrucial in global efforts to lift millions of people out of poverty.

Both the bank and Yunus, have come under attack by the government of Bangladeshand its prime minister, Sheikh Hasina Wazed. It has taken 35 years of painstaking effortto build Grameen into a world-class institution that serves millions of poor people. Thatprogress could be lost if the countrys leaders fail to appreciate what makes theGrameen Bank works.


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Anyone who cares about international development, microfinance or socialentrepreneurship should pay attention. The Grameen Bank is not just the largest microlender in the world, with 8.4 million borrowers (most of them women villagers) whoreceived more than $1 billion in loans last year; it is the flagship enterprise in an industry

that, in 2009, served 128 million of the worlds poorest families. It is also a leadingexample and inspiration for millions of citizen-led organizations that have beenestablished in recent decades to address social problems that governments have failedto solve.

Yunus, the founder of the bank, is an entrepreneurial figure cut from the same cloth asSteve Jobs, the founder of Apple. He has devoted himself since the 1970s todemonstrating, institutionalizing and spreading microfinance. Recently, the governmentissued orders that Yunus is to be removed from his post as managing director of thebank. Yunus has taken the case to Bangladeshs Supreme Court.

Legally, the government owns 25 percent of Grameen and has the right to appoint aquarter of its board members, including its chairperson. In practical terms, however, thegovernment has little justification to intercede in the banks operations. Today, of theGrameen Banks paid-up share capital, only 3.5 percent comes from the Bangladeshigovernment. It is the banks borrowers who are its majority owners. They control 75percent of the board seats and they have supplied 96.5 percent of the paid up sharecapital. And its the savings of villagers about $1.5 billion that now finances thebanks activities and growth.

Nevertheless, the government is proceeding to remove Yunus against the objections ofits majority owners and will probably succeed. The stated reason is hollow: Yunus, whois 70, is over the mandatory retirement age in government banks.

An Entrepreneur became threat for local Government:

Whats the real reason behind the governments attacks on Yunus? The most likelyexplanation is that Yunus is being punished for criticizing the government and making abid to start a political party in 2007.

This is a threat to be taken seriously not because the bank will collapse withoutYunus. The Grameen Bank is a strong, well-managed institution with 25,000employees. It could probably withstand his departure. Indeed, given Yunuss age, itscritical to pave the way for a successor. But if he is replaced in a manner thatdiminishes confidence, the bank could face problems.When an organization has a founder who is intimately associated with it the leadershiptransition needs to be handled with great care. This is particularly important because theGrameen Bank depends on unusually high levels of motivation among its staff and highlevels of trust among its borrowers. A forced removal of Yunus that is seen asillegitimate, politically-motivated, or vindictive could alienate thousands of employeesand trigger a run on savings or loan defaults.


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Even the perception that it has come under the influence of the governing party, theAwami League the present Government, could cause damage. Bangladesh has a longhistory of banks and cooperatives being used as political instruments. The state-ownedbanks have regularly extended loans to elite borrowers (who default at high rates) as a

form of patronage. Unlike Grameen Bank, which is financially self-sufficient, the statebanks are perpetually in need of cash infusions from the government.

Heres an example of what could happen: The Prime Minister has made it clear that shebelieves the interest rates are too high. Her concerns for the poor may be well-intentioned. But historically, subsidized loans have been seen as goodies and havegone to the most powerful, not to those they were intended for: the poor. Grameensrates are, in fact, considered low among micro lenders, whose administrative costs arefar higher than that of traditional banks. However, if a politically-minded managingdirector decided to cut the interest rate, it could jeopardize the banks solvency.

Similarly, if the government installed a bureaucratic manager who failed to appreciatethe banks entrepreneurial culture, it could suck the life out of the bank. Managing abank that actually works with poor women in villages means, above all, recruitingpeople who care about the poor and training them in creative ways. Before GrameenBank workers get hired, for example, they spend close to a year demonstrating theirinterest in serving the poor. They have to do things like write detailed case studiesabout the lives of village women to show that they genuinely care about, andunderstand, their clients. Managing this workforce is nothing like managing a run-of-the-mill bank.

In an institution like this, the management needs to be perceived as honest, responsiveand open. If corruption, politicization or bureaucratic torpor began to infect it, thedisease would be irreversible.

The government has tried to maintain the appearance that its attacks are merely aboutfollowing the law. That is hard to believe. Over the past few months, officials havesought to damage Yunuss reputation, claiming without evidence that he has enrichedhimself at the expense of the poor, intentionally harmed borrowers, and engaged infraud. The prime minister has called micro lenders loan sharks sucking the blood of thepoor. Her son circulated a letter which contained a litany of unfounded accusationsagainst Yunus the most outrageous being that the government created the GrameenBank, not Yunus.

Its not as if Bangladesh is lacking real problems that require government attention.There can be no sense in destabilizing the leading institution in an industry that providesfinancing to more than half of the households in the country. In fact, the field of micro-finance needs solid, innovative leadership today more than ever. There remainquestions about its effectiveness in alleviating poverty. Its crucial for lenders to makehonest appraisals of their impact and experiment with other services to determine how itcan be made to work better.


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Implementation & evaluate strategies

In Bangladesh, there is also a potentially serious problem of villagers taking loans frommultiple lenders and getting overly indebted. For these and other reasons, it is unwisefor the government to try to tarnish or marginalize Yunus, whose experience, global

recognition and inventiveness are valuable assets for the whole field.On March 15, the Bangladeshi Supreme Court postponed ruling on Yunuss case fortwo weeks. Hopefully, common sense will win the day and a solution will be reached sothat this vital institution and the millions of villagers who depend upon it for theirlivelihoods are not jeopardized. Given that Yunus understands Grameens culturebetter than anyone, he should have a key say in any leadership change.

Picture: Muhammad Yunus, center, outside the high court building in Dhaka,Bangladesh, on March 6 where he contested the governments decision to remove himfrom his post in Grameen Bank.

As weve noted in several previous Fixes columns, the involvement of governments inanti-poverty programs is often essential. Wise governments should view microfinanceprograms not as adversaries, but as partners in furthering public goals organizationsthat need to be regulated, but not controlled. Not all do. So its important for leaders of

micro-finance organizations to take steps to safeguard their independence well beforepolitical attacks come. Foreign governments and multi-lateral institutions have investedhundreds of millions of dollars in the Grameen Bank and other large microfinanceorganizations in Bangladesh, and elsewhere, with the goal of alleviating poverty. Theyalso need to remember that its not enough to finance development organizations. Theyneed to protect them, too.


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The future of the Grameen Bank

The Grameen Bank looks as though it has a secure future as an MFI in Bangladesh andshould remain a major player in the microfinance market, alongside other big players,such as ASA and BRAC. It also seems set to remain a global icon, although there is

real confusion about the message that the Bank and Professor Yunus project.

Internationally, it is still perceived as a micro lending institution, focused on extremelypoor women, despite the fact that it has adopted a market-based, financial systemsapproach since 2001.

The confusion could be a cause for concern, but my personal analysis is more positive.Within Bangladesh, Grameen now plays an important role as a substantial MFI thatmeets client needs and helps to promote competition within the financial markets. Itsviability is essential for this internal role, but also very important for its external role. Hadthe Grameen Bank collapsed, then optimism about the feasibility of poverty reduction

and international development would have been dented. While the internationalmessage associated with the Bank microenterprise credit for extremely poor womenlifts them out of poverty is now inaccurate, the broader thrust of this message ofhard working poor people using their personal agency to overcome the problems theyface is highly appropriate for the publics and politicians of rich countries. It helps thecitizens of the rich world to understand that poor people are active agents in theprocesses of development and not passive recipients of food aid and humanitarianrelief, as the media (in the USA, Europe, Japan and the Middle East) usually stereotypethem. The Grameen Bank today is a very different organization from what it was 20years ago, but it still serves as an inspiration for those trying to help poor and low-income people in their own efforts to improve their lives.

Conclusion

Microcredit is not the cure for everything, but it is a force that can bring about economic,personal, social, and political change. Poverty builds giant walls around people.Grameen does not intend to give people a few nice days within these walls. Grameenwants to give the people the strength to tear down the walls and ultimately establishan existence above the poverty level. Muhammad Yunus is a man who works forchange, an optimist who is genuinely convinced of change for the good. If society wouldstrongly promote self-reliance, poverty would not stand a chance. We must simply makeuse of human potential. Every person is endowed by nature to support herself orhimself. Promoting this potential is the task not only of government but of business.Greed is not the only driver of free enterprise; Social benefit can replace greed as apowerful motor. The business world does not have to be a battlefield of bloodthirstycapitalists. Good people can feel called upon to steer the world sustainably in the rightdirection.


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References:

Gameen Bank & Grameen Foundation web site - www.grameen-info.org Yunus Centre - http://www.muhammadyunus.org

Moral Heroes Muhammad Yunus , Bangladesh, 20th Century, Asia, Economic, Male

-http://moralheroes.org/muhammad-yunus Market Mix at Economical Sector - http://www.mixmarket.org/mfi/grameen-bank Hulme,.D and Arun, T.G. (forthcoming 2009) Microfinance: A Reader, London,

Routledge. Fuglesang, A. and Chandler, D. (1986). Participation as Process: What Can We

Learn from the Grameen Bank, Bangladesh. Oslo, Norway: Norwegian Ministryof Development Corporation.

Rutherford, S. with Maniruzzaman, Sinha, S.K. and Acnabin & Co. (2006),GRAMEEN II - The First Five Years: 2001-2006, Grameen II Briefing Notes forMicroSave. Online resource available at: http://www.microsave.org

Dowla, A. and Barua, D. (2006). The Poor Always Pay Back The Grameen II

Story. West Hartford, CT: Kumarian Press. Yunus, M. (1999). Banker to the Poor: Micro lending and the Battle against

Poverty. New York: Public Affairs. The Daily New York Times (Online Version)

http://www.nytimes.com/imagepages/2011/03/22/opinion/22fixesEimg.html
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dr.muhammod yunus

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