Grameen Bank

Before coming to class we were asked to watch a video of a person I was well aware of. It was a speech by Mohammed Yunus of Grameen Bank, Bangladesh.

          The Grameen Bank is a community development bank started in Bangladesh. They give small loans (known as micro credit or "Grameen credit") to poor people without asking for collateral. The system of this bank is based on the idea that the poor have skills but have no chance to use their skills without some money; that is their skills are under-utilized. Most of the bank’s loans go to women and the bank believes in giving equal opportunity to everyone.

The Grameen Bank was started 1976 when Professor Muhammad

Yunus, a Fulbright scholar and Professor at University of Chittagong, researched how to provide banking for the rural poor. In October 1983, the Grameen Bank Project was made into an independent bank by the government. The group and its first member, Muhammad Yunus, were awarded the Nobel Peace Prize in 2006. Grameen Bank is owned by the people who borrow the money, mostly women. The borrowers own 94% of the bank, and the other 6% is owned by the Government of Bangladesh.

Please find the video embedded below. Watch it!! Worth every single second!

                The difference styles of management, delivery of product, difference between a traditional banking system and the Grameen micro-credit system were discussed. Find the Differences below:

		TRADITIONAL BANKING	GRAMEEN BANK
1.	Purpose	Maximising Profit (Profit Motive)	Reducing Poverty
2.	Collateral	Needed. Without which no loans will be given.	No collateral needed
3.	Ownership	Businessmen – Rich People	By the Poor
4.	Loan Amount	Large Amounts	Very Small Amounts
5.	Type of Lending	To individuals	To small groups of people –Solidarity lending
6.	Type of Interest	Usually Interest is compounded	Simple Interest
7.	People Money given to	In most developing countries there seem to be a bias towards men.	Women are the primary focus. In fact women make up 97% of Grameen Bank Customers
8.	Location	Primarily located in urban areas	Primarily located in rural areas

By observing them we can also realize the difference in their Organisational Culture. Organization Culture is the behaviour of humans who are part of an organisation and the meanings that the people attach to their actions. Culture includes the organisation values, visions, norms, working language, systems, symbols, beliefs and habits.

                       The culture at Grameen Bank is to find ways to eradicate poverty. Unlike private banks, they don’t concentrate on profits but on how many people have they taken out of poverty.

             Organisational Culture is what motivates employees to perform well. It is the Organisation Culture that affects the way people and groups interact with each other, with clients, and with stakeholders. It is the Organisational Culture that gives the organisation Branding.

Grameen Bank not only talks about efficiency (self sustaining model) but also about effectiveness (giving help to those who need it the most). Grameen Bank is the perfect example of Excellence.