‘Grameen Bank rev­o­lu­tionises bank­ing world­wide’

The Pak Banker - - Company& -

KUALA LUMPUR: De­spite de­fy­ing all the rules of con­ven­tional bank­ing, Grameen Bank has sin­gle­hand­edly lifted the Bangladesh poor from poverty. More amaz­ingly, it has even re­formed so­cial devel­op­ment and econ­omy not only in the coun­try but across the world.

The man that came up with the idea is now be­fit­tingly a No­bel Lau­re­ate. Pro­fes­sor Dr Muham­mad Yunus, founder and Man­ag­ing Di­rec­tor of Grameen Bank, started the bank while his coun­try was go­ing through famine in the 1970s. And his in­spi­ra­tion came one morn­ing in 1976, while he was walk­ing past a vil­lage to the uni­ver­sity in which he served as an eco­nom­ics pro­fes­sor. "I en­coun­tered a poor woman who ex­plained to me that she earned only two cents a day from mak­ing these beau­ti­ful bam­boo chairs, all be­cause she had to bor­row from a loan shark. The loan shark had de­manded that she sell her prod­ucts to him at a price so low that she made a profit of only two cents a day".

Muham­mad said at that moment, he needed to pay the loan shark only USD1 to set her free from debt and help her out from that cy­cle of poverty. And so he did.

The hap­pi­ness and re­lief in the poor woman in­spired him to look for other peo­ple in the vil­lage who owed the money­len­der. He found 42 peo­ple who needed a to­tal of only USD27 to pay off the loan shark, as well as to buy raw ma­te­ri­als for their busi­nesses. With that amount of money they man­aged to be­come debt free and at the same time sell their prod­ucts to the high­est bid­der, thus im­prov­ing their eco­nomic sta­tus.

In do­ing so, he found that he had helped the first woman make a profit of USD1.25 a day, in­stead of only two cents. Thus be­gan a jour­ney for Muham­mad to set up Grameen Bank which breaks the cy­cle of "low in­come, low sav­ing and low in­vest­ment".

Muham­mad shared the in­spir­ingly fa­mous his­tory of the bank dur­ing a lun­cheon in Malaysia re­cently, while de­liv­er­ing a key­note ad­dress ti­tled "So­cial Busi­ness and Poverty Re­duc­tion". The spe­cial lun­cheon was or­gan­ised by Khaz­anah Malaysia and the Malaysian Di­rec­tors Academy (Minda). Bank For The Poor: Grameen means "ru­ral" or "vil­lage" in Bangla. Its tagline is "Bank for the Poor". It pro­vides mi­cro credit to the ru­ral poor in Bangladesh, so that they may start or fi­nance their busi­ness and keep their in­come grow­ing. Muham­mad says the bank lends tiny loans of USD200 per month to about 8.3 mil­lion bor­row­ers all over Bangladesh and are paid back in weekly in­stal­ments. Amaz­ingly, al­though the bank lends out to those liv­ing be­low the poverty line, it man­ages to re­coup nearly 98 per­cent of its loans. The eco­nom­ics pro­fes­sor says one ba­sic fun­da­men­tal of the banks since in­cep­tion is that banks should go to the peo­ple and not the other way.

"We meet all these 8.3 mil­lion bor­row­ers at their doorsteps. They don't have to go any­where. We meet them ev­ery week and do bank­ing at their doorstep. -PB News

RAWALPINDI: Mrs Elke Hoff, Mem­ber of De­fence Com­mit­tee and Sub Com­mit­tee of Ger­man Par­lia­ment on Dis­ar­ma­ment, Arms Con­trol and Non Pro­lif­er­a­tion called on Chief of Army Staff Gen­eral Ash­faq Parvez Kayani at Gen­eral Head­quar­ters. -App

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