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.