In order to bring the landless and assetless poor out of the shackles of poverty, muhammad yunus, the noble

laureate developed an innovative and unique banking system in bangladeshi villages by establishing gramene bank. A band innovated on micro financing by lending small ammounts of money to the poorest of the poor who were turned away by the commercial banks because they did not have any collateral securities to offer. Gramene bank devised a system to lend small amounts to the poor. This was based on the faith that the poor have their self respect. And their condition of utter destitution would make them more enterprising. The system required each borrower to belong to a five member group wher e in the peer pressure of their fellow borrowers in the group ensure that everyone behaved in a responsible manner and no one defaulted on the repayment. The beneficieries used the loan amount to start a micro entreprise in crafts, agriculture and services. By focusing the lending to women who constitute over 95% of the borrowers, gramene bank has been able to maintain a recovery record of over 98% proving that the poor are trustworthy and bankable. By 2007, the bank ws able to reach more than 7.3 million borrowers in bangladesh, 97% of whom were women, by providing services in nearly 80,000 villages.