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.
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.
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