Aura of Business

Every other day we hear about the government’s initiatives for upliftment of the rural poor. How much these proposals materialize is a different issue. But hardly do we see individuals coming up with something on their own with the sole intent of helping the rural poor and empowering them financially and socially. It is this excellence in microfinance that has made Muhammad Yunus and the Grameen Bank so popular and relevant in today’s times.

The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, Head of the Rural Economics Program at the University  of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. 

OBJECTIVES 

The Grameen Bank Project (Grameen means "rural" or "village" in Bangla language) 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 unemployed people 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 by themselves

· 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"

METHODS EMPLOYED TO ACHIEVED EXCELLENCE

The Grameen Bank's Method of action can be illustrated by the following principles:

Start with the problem rather than the solution: a credit system must be based on a survey of the  social background rather than on a pre-established banking technique.

Adopt a progressive attitude: development is a long-term process which depends on the aspirations and committment of the economic operators.

Make sure that the credit system serves the poor, and not vice-versa: credit officers visit the villages, enabling them to get to know the borrowers.

Establish priorities for action vis-a-vis to the the target population: serve the most poverty-stricken people needing investment resources, who have no access to credit.

At the beginning, restrict credit to income-generating production operations, freely selected by the borrower. Make it possible for the borrower to be able to repay the loan.

Lean on solidarity groups: small informal groups consisting of co-opted members coming from the same background and trusting each other.

Associate savings with credit without it being necessarily a prerequisite. 

Combine close monitoring of borrowers with procedures which are simple and standardised as possible.

Do everything possible to ensure the system's financial balance. 

Invest in human resources: training leaders will provide them with real development ethics based on rigour, creativity, understanding and respect for the rural environment.

All these efforts of Muhammad Yunus through the Grameen Bank have helped in upliftment of lacs of people in Bangladesh. With the success of the Grameen Bank, the concept of microfinance has been adopted by many other countries. So much has been the success of the Grameen Bank that it is being supported by economic institutions the world over like the IMF, World Bank, etc.

Excellence in the thoughts and efforts put in by Muhammad Yunus has been the key in bringing about significant changes in the lives of lacs of people. Excellence can be achieved only when due thought has been given towards the steps necessary for attaining efficiency and effectiveness.

Effectiveness of Transformation

Every organization faces challenges. Often the case is that, at any point of time, one department of the organization may perform extremely well while some other department may not. The real challenge is to carry the organization forward through these hurdles through support and cooperation. This is very well demonstrated by the Valley Crossing Exercise.

 

The Valley Crossing Exercise

 

 

As the photo depicts, there are 3 people who are carrying a bamboo with them. The bamboo represents the organization and the 3 people represent the different departments. The 3 people have to cross a valley safely and reach the other side. The width of the valley is such that at any instant, it will completely have a person hanging on the bamboo and the hanging person will have to be supported by the other two persons.

 

During the exercise, anyone of the three persons can be at the following three risk levels:

Risk free (safe) – Completely on ground

Half Risk – One half on ground and the other half hanging

Full Risk – Completely hanging

LEARNING FROM VALLEY CROSSING EXERCISE:

TRUST :  The single most important factor for their success was the trust factor. Trust was necessary for them because when somebody was in full risky state all of his hope were on the other two and if any of the two failed then he could have fallen into the valley. But he kept on the faith and made it to the other side of the valley . Similarly even in commercial level we need to trust others. We need to trust other people and have faith in their talent and capability.

 

 SHARING OF RESPONSIBILITY :  At all the positions while crossing everyone shared equal responsibility.At no time was any person more responsible for a success/failure than the other one and this defines why they had success in the end. They showed great responsibility while carrying each other. Similarly in our business world we need to share and take responsibility . Unless we take it ourselves nothing would be beneficial for us. Once we start taking it and execute it properly we will see results showing good in our favor as well.

  

FOCUS :  Focus was one thing that they did not lose. Until they had reached their goal they did not even shifted their focus for a single bit. This defines a true quality of an entrepreneur. One should never lose focus till one has reached where he had aspired for.

 

COORDINATION : Nothing would have been possible unless there was coordination at place. If they had lost a single bit of coordination  at any point then the whole idea would have failed. Similarly in our business world we need to coordinate things properly. If not done well the whole thing could go haywire resulting in utter failure of the concept in spite of hard work.This coordination should be there all throughout the hierarchy of the organization .