“BANKER TO THE POOR”[Micro-Lending and the Battle Against World Poverty]

An Autobiography of ‘Muhammad Yunus’

Policy of Presentation

Father of Micro-Lending

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

1940, Chittagong, India, (Now

Bangladesh)

Third of fourteen Children ( Five of them

died in infancy)

BA & MA (Economics) at Dhaka University

Ph. D ( Economics) from Vanderbilt

University ( USA)

In 1972, Head-of-Department (Eco) of

Chittagong University

In 1983, Founder & MD of Grameen Bank

In 2006, Nobel Peace Prize

About Author

(Professional Life / Balance Sheet)

Idiot Box

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

Muhammad’s Role Model

‘Poverty is a Result of Mismanagement of Resources

“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”

Muhammad’s Objective

Social Revolution

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 with

dignity.

Recognition

Nobel Peace Prize in 2006 with joint of Grameen Bank

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

Conti……

A Bona fide Visionary

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 Economic Network

Purpose of Book

“To tell the story of Grameen bank to every one and to motivate people to join those who believe in the possibility of creating poverty free world and have decided to work for it.”

MF and SB: two approaches successfully tested 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 – Paris appeal for Responsible Finance.

The Poor in Bangladesh before Yunus

Credit is a Powerful Weapon

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 SystemNo Access to Loans or CreditNo Collateral

What is Grameen

It’s not people who aren’t credit worthy. It’s bank that aren’t people worthy

Grameen is a Self-help organization, is not a bank. Grameen is all about personal and economic development, and where is development there is change. People improves their lives, their lives change, and suddenly the situation is fluid. The change which occurs is not a victory over another person, but over the confidence of abject poverty. And , Improving one’s living standard is intrinsic to the process of change.

-Muhammad Yunus

Vision and Mission of Grameen Bank

Unknowingly, He Believe in KISS Formula

MissionTo inculcate the sprit of savings access loans and utilize the Money a sustainable basis

VisionA strong microfinance institute ready to take on the challenges of every day life for all members mainly improvement of their well being

Introduction to Micro-Lending: History

Sufia Begum Khatun, 26 Dollars

How 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).

Working Principal of Grameen Bank

Bicycle

“Conventional banks ask their clients to come to their office. It’s a terrifying place for the poor and illiterate. … The entire Grameen Bank system runs on the principle that people should not come to the bank, the bank should go to the people. … If any staff member is seen in the office, it should be taken as a violation of the rules of the Grameen Bank. … It is essential that [those setting up a new village Branch] have no office and no place to stay. The reason is to make us as different as possible from government officials.”

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. “

Grameen Bank Lending Model

No Legal Instruments & No Collateral

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

The Repayment Mechanism

No Judiciary in seeking repayment of loans

One year loansEqual weekly installmentsRepayment starts one week after the

loanInterest rate of 20%Repayments amount to 2% per week

for fifty weeksInterest payment amounts to 2 taka per

week for a 1000 taka loanContribute to the Group Fund = 5% of

Loan AmountMember = Savers + Borrowers

Why Lend to Women rather than to Men

94 % borrowers of Grameen Bank

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

Grameen Bank Workers

Age: Not more than 27 years / Qualification: PG with B grade.

Women MenRecruited Locally Recruited

Nationally

At a time when they finished their

studies

No such type of Condition Involved

Either are waiting to be married

Does not matter about marital

status

Preference to those, whose

husband is Jobless

No such type of condition involved

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

Conti…

We shall plan to keep our Families small. We shall minimize our expenditures. We shall look after our health We shall Educate our children and ensure that they can earn to pay for their education We shall always keep our children and the Environment clean. We shall build and use pit-latrines We shall Drink water from tubewells. If it is not available, we shall boil water or use alum We shall not take any Dowry at our sons' weddings, neither shall we give any dowry at our daughters wedding. We shall not practice child marriage

Conti…

We shall not inflict any Injustice on anyone, neither shall we allow anyone to do so. We shall collectively undertake Bigger Investments for higher incomes. We shall always be ready to Help Each Other. If anyone is in difficulty, we shall all help him or her. If we come to know of any breach of Discipline in any centre, we shall all go there and help restore discipline. We shall take part in all Social Activities collectively.

Grameen Bank Success Story

250 Institutes Around the World Operate on Grameen Bank Concept

In 1976Only a small single hutStudents work as volunteersNumber of borrowers = 42 women

According to the book, it has now1,181 branches & 11,777 employeesTotal Loans given $174.78 billion 2.4 Million Families in Rural Bangladesh have

been served98% repaid95% borrowers are women

A Comparison with Conventional Banks

Govt. Banks Means Charity Organization for Rich

Conventional Banks Grameen BankPeople should come to

the bankThe Bank should go to the

people

Staff members work in-side the bank

Staff members work out-side the bank

Success of bank measured by the repayment rate

Success measured by the less miserable and difficult

lives of our borrowers

No visits at borrowers home

Weekly and monthly visit at borrowers home

Here, Credit means Interest

Grameen means Credit means Trust

Even single penny loan has legal cover

All millions of dollars loans have no legal cover

10 % repayment rate 98 % repayment rate

Against the Mind-SetShariah 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

because they have some evil design

CHITTAGOANG

DHAKA

TANGAIL

Map of Grameen Bank’s Zones

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 ministerMr. 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 was born

First working day of Grameen bank was October 2, 1983.

Hierarchical Structure of Grameen Bank

Zones

Areas

Branches

Centers

GroupsZonal Manager & Zonal Office Has to be

done Actual Operations

Ownership Structure of Grameen Bank

Muhith told to Yunus this only one way to get Bank

Yunus Wante

d

Muhith

Reserved

President

Approved

In 1985

Borrowers

60 % 40 % 40 % 75 %

Government 40 % 60 % 60 % 25 %

Learning’s of Group

Change the Attitude of People, They will Change the Country

The strength of women is far greater than our imagination

Fortune @ bottom of pyramid Small is BigWork life BalanceWorst 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.

Smile Girls Smile

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 expected”

From Business Perspective“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 making profit”

The Grameen Family of Companies

In Bangladesh, Grameen is Like as TATA

For Profit Grameen Bank……………………………………………1983Gonoshasthyaya Grameen

Textile………………………..1995Grameen Cyber net……………………………………….1996Grameen Phone …………………………………………..1996

Not for ProfitGrameen bank also has 13 non profit organizations,

which were been opened from 1989 to 1998

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

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”(This information from the side of MALE social well

being community)

Stake Holders in this Presentation

Thank You all my Classmates for Paying Attention

Muhammad YunusAlan Jolis

Anant Kumar ChaudharyHemant Singh Katiyar

Manish SinghShailesh Kumar Agrawal

And, Poorer of Bangladesh and Grameen Bank Staff

Sufia Begum Khatun & Jobra Village

I strongly believe that we can create a poverty-free world, if we want to.... In that kind of world, [the] only place you can see poverty is in the museum. When school children will be on a tour of the poverty museum, they will be horrified to see the misery and indignity of human beings. They will blame their forefathers for tolerating this inhuman condition to continue in a massive way....

—Muhammad Yunus