Faculty of Mastersof Business Administration

(PAU)
INTERNSHIP REPORT
On
“Financial Performance Analysis of Grameen Bank ”

An Internship Report Presented to the Faculty of Masters of Business Administration (MBA) in

Partial Fulfilment of the Requirements for the Degree of Masters of Business Administration.

Supervised By
Noshin Anjum Chaiti
Lecturer, B.B.A Program School of Business
Primeasia University

Submitted By
Chinmoy Das
ID: 203008067
Department: MBA

Major: Finance

Date of Submission:06/10/2021

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 LETTER OF TRANSMITTAL

06/10/2021
Head of the Department of Primeasia University
Subject: Submission of Internship Report.
Dear Sir,
I respectfully asked to submit my internship report on “Financial Performance Analysis of
Grameen Bank”. This is a necessary requirement for complete my MBA program. I gave
every effort to work sincerely and make this report informative. I started my internship
program from 13 Jun, 2021 to 12 September, 2021 under international program department at
Grameen Bank.
The report I have done have enhanced my practical and general knowledge about Grameen
Bank with micro credit financial activities. And also create my job or corporate level
knowledge that may help me in future. I hope that the report will be able to fulfil your
expectations too.

I have worked sincerely to make this report informative and as precise as possible. I thank
you for the unique opportunity to work on this report.

Sincerely,

Chinmoy Das
ID: 203008067
Department: MBA
Major: Finance
Masters of Business Administration
Primeasia University (PAU)

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 SUPERVISOR CERTIFICATE

This is to certify that this internship report has been submitted to the MBA Faculty, Primeasia
University (PAU), for the award MBA Major in Finance is a fundamental work done by
Chinmoy Das. He bears the ID: 203008067.He has completed internship program at
"Financial Performance Analysis” from 13 Jun, 2021 to 12 September, 2021 at Grameen
Bank Mirpur-2,Head office Dhaka-1216, Bangladesh, successfully.
Chinmoy Das has fulfilled all the requirements according to the rules of the Primeasia
University (PAU). This Internship report is the product of his own investigation under my
supervision.

I wish him every success in life.

..................................
Noshin Anjum Chaiti
Lecturer, B.B.A Program School of Business
Primeasia University

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 STUDENT DECLARATION

Proper education is the harmonious development of body mind and soul. But proper
education means the combination of bookish knowledge and practical knowledge. Bookish
knowledge is theoretical and practical knowledge is real. Theoretical education is incomplete
without practical training and practical knowledge is the root of all betterment, I feel this true.
In order to keep pace with the dynamic and complex business environment now we are
surrounded by and as a holder of MBA degree I need to gather practical knowledge make the
bookish knowledge complete. To meet the requirements of MBA degree Department ofMBA
of Primeasia University (PAU), arrange 90 Days Internship program in every academic
session. That's why I was assigned to Grameen Bank. Mirpur-2,Dhaka-1216, Dhaka head
office to undertake a 90 days Internship program.
For this purpose, I have participated in 90 days internship program from 13 Jun, 2021 to 12
September, 2021 and report from under the supervision of my respected Noshin Anjum
Chaiti, Lecturer, B.B.A Program School of BusinessPrimeasia University (PAU). I had to
complete my Internship program within a short period of 90 days, which is not sufficient to
acquire complete knowledge regarding overall activities of Grameen Bank Mirpur-2, Dhaka-
1216, Bangladesh. I confirm that, the report is only prepared for my academic requirement
not for otherwise purpose. It might be with the interest of opposite party of the corporation. I
also assure that this report is not submitted anywhere of Bangladesh before me. I have tried
my best to prepare this report according to my topic completely but there might have some
mistake for which I humbly apologies.
Sincerely yours,
Chinmoy Das
ID: 203008067

Department: MBA

Major in finance
Masters of Business Administration (MBA) Primeasia University (PAU), Dhaka,
Bangladesh.

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 ACKNOWLEDGEMENT

First of all I would like to express my indebtedness and deep sense of gratitude to my
honourable supervisor Noshin Anjum ChaitiLecturer, B.B.A Program School of Business
Primeasia University(PAU), whose scholastic supervision, kind and sympathetic guidance,
warm advice and encouragement have enable me to materialize this report successfully. I
would like to express my sincere gratitude to Mohammad Mizanur Rahman (Co-ordinator,
Principal Officer) International Program DepartmentGrameen Bank, Head Office Mirpur-2,
Dhaka-1216 and all other faculty members for their cordial attitude and extending helping
hand to me in collection of data and facing any problem. I am greatly indebted to Golam
Morshed Mohammed(Assistant General Manager and FacultyChief)International Program
Department, Grameen Bank, Head Office,Mirpur-2,Dhaka-1216,Bangladesh for giving their
valuable time, guideline, suggestion and comments, which helped me very much during the
internship period in this branch. I shall never forget the help from some book, term papers,
etc. above all I really be indebted to authors of these works. Finally, I thank all the persons
who have directly or indirectly contributed in preparing this report. Every effort has been
made to present the material in easy, clear, lucid, and systematic manner. Though all efforts
have been made to make the report reasonable exhaustive and comprehensive, it is not quite
possible to prepare this report without a signal error. I regret for any error.
Chinmoy Das
ID: 203008067
Department: MBA
Major in finance
Masters of Business Administration (MBA), Primeasia University (PAU),Dhaka,
Bangladesh.

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 Executive Summary

The report is based on Financial Performance Analysis of GRAMEEN BANK. In this report,
findings are based on fundamental analysis where I have analysed liquidity ratio, activity
ratio, leverage or debt ratio, profitability ratio, and so on. In this report, I have examined the
financial performance of GRAMEEN BANK Limited from 2015 to 2019. The essential
functions of a bank are trusted into two segments called deposit and loans. The principal
objective of a bank is to collect the deposit from the surplus portion and supply the
accumulated fund to the deficit portion. Therefore, in the case of deposit collection, I have
found that they have done a magnificent job compare to the existing the entire private and
government bank in Bangladesh. They collected 208,022 million taka as deposit in 2019, and
it has been growing day by day. But unfortunately, collection of the deposit is only one
variable of financial performance. They need to perform other variables as well, and they
need to utilize that deposit amount that they have collected and granted the loan to the
customer so that they can generate income which is the ultimate goal or performance of any
business organization. So, to generate revenue and maximize shareholder wealth, they need
to grant the loan and make a significant amount of money out of it. Moreover, their
performance was well in some areas which I have mentioned previously and have discussed
detailed in this report and some areas their performance was poor, which also said in this
report. Finally, I hope that they will perform well for the upcoming year.

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TABLE OF CONTENTS
SerialNo. Particulars Page No.
01. Letter of Transmittal I
02. Supervisor Certificate II
03. Student Declaration III
04. Acknowledgement IV
05. Executive Summary V
06. Acceptance Letter VI
07. Bank Certificate VII
08. ChapterOne: Introduction
1.1 Introduction 01
1.2OriginoftheStudy 01
1.3Objectives of the Study 01
1.3.1 Board Objective 01
1.3.2Specific Objective 01
1.4Methodology of Data Collection 02
1.5Limitation of the Study 02
09. Chapter Two: The Organisation
Introduction 04
2.1 Historical Background 05
2.2Objectives of Grameen Bank 06
2.3Mission of Grameen Bank 06
2.4Vision of Grameen Bank 07
2.5 Grameen Bank Principles 07
2.6Organization Nature 08
2.7Grameen Bank Achievements 09
2.8Structure of Organization 09
2.9Numbers of Branches 09
2.10 Organogram of GRAMEEN BANK field operation 10
2.11GRAMEEN BANK at a Glance 11
2.12 SWOT Analysis of Grameen Bank 12
2.13 Method of Action 13
2.14Credit Delivery System 13
2.15 10 Indicators 16
2.16 Loan Schemes 16
2.16.1 Loan Insurance Saving 17
10. Chapter Three: Analysis and Findings
3.1 Financial Performance Analysis 19
3.2 Source Of Fund 19
3.3 Grameen Bank Share Capital Distribution 19
3.4Analysis of Liquidity Ratio 20
3.4.1 Liquidity Ratio/ Current Ratio 20
3.5Debt Ratio Analysis: 21
3.6Analysis of Activity Ratio 22
3.6.1 Total Asset Turnover Ratio 22

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 3.7Analysis of Profitability Ratio 23
3.7.1 Net Profit Margin 23
3.7.2 ROA-Return on Asset 24
3.7.3 ROE-Return on Equity 25
3.7.4 Cost Income Ratio 26
3.8 Balance Sheet (2015—2019) 27
3.9 Past Five Years at a Glance (2015—2020) 28
Financial Intermediation Indicators (In billion BDT) 29
Sources of Fund as on 31st December 2019 (In million BDT) 29
Pension Benefits Paid to Retired Employees (In Million BDT) 29
3.10 Disbursement of Loans Under Board Categories of Activity Up 30
to December 2020
3.11 Outstanding Of Loans From (2015—2020) 30
3.12 Cumulative Disbursement Of Loans from 2015---2020 31
3.13 Major Findings 31
11 ChapterFour: Conclusion and Recommendations
4.1 Recommendation 33
4.2 Conclusion 33

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1.1 Introduction
This report focuses on financial performance analysis of GRAMEEN BANK. Most people
live in a village that’s call it is a rural country. Bangladeshi maximum people are landless and
asset less. Bangladeshi economic depends on rural development. GRAMEEN BANK devoted
to high-quality service to customers and thereby contributes to the growth of GDP of the
country throughout stimulating trade and commerce, poverty alleviation, raising the living
standard of limited income group and overall sustainable socio-economic development in the
country. To complete a MBA degree, it is necessary to perform an internship program. In this
program, we can develop our confidence in practical job life. An internship is an essential
part of the of MBA degree; I started to my internship in GRAMEEN BANK, Head office,
international program department, Mirpur-2,Dhaka-1216 for three months’ duration. This
report has been completed by my practical as well as theoretical knowledge about
performance analysis of Grameen Bank.

1.2 Origin of the Study

The practical and professional environment is a necessary part of completing the MBA
program. After completion my all courses of MBA program under PAU, it is compulsory to
complete my MBA program.
I started the internship program of the International Program department, Head
Office,Mirpur-2, Dhaka-1216 Grameen Bank, for three months’ duration to complete the
MBA program. While I was working at Grameen Bank, I have learned different things about
the microfinance sector. This report helped me to develop my skill and experience in
microfinance activities. I accumulated more knowledge and experience during my internship.

1.3 Objectives of the Study

1.3.1 Broad Objective:
 To analysis the financial performance of Grameen Bank.
1.3.2 Specific Objectives:

 To analysis the Liquidity flow and Debt ratios of Grameen Bank in LoanSector.
 To find out the profitability by activity ratios of Grameen Bank from different sector.

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1.4 Methodology of Data Collection
The report information collected by two sources.

PRIMARY SECONDARY
SOURCE SOURCE

Primary Sources:
 Practical knowledge or information
 Activities of Grameen Bank
 Face to face interview with the Mohammad Mizanur Rahman (Co-ordinator,
Principal Officer) International Program Department Grameen Bank, Head Office
Mirpur-2, Dhaka-1216
 Face to face conversation with other employees of Grameen Bank.

Secondary Sources:
 From Grameen Bank Website
 From Previous reports of online
 From Annual reports of Grameen Bank
 Online journals about Grameen Bank

I collected my data from my coordinator and other Grameen Bank staffs that is primary
sources.
I collected some data from secondary data by company websites, previous reports, and online
Journals and as so on.

1.5 Limitation of the Study

 Time limitation for understand the bank.
 The reluctance of the busy persons, important information collection was
becominghard.
 All information was not collected.
 Some data is not collected properly because of their security issue.
 In some cases, respondent employees were not giving proper reply.

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  Some of records are not available.

ChapterTwo:
The Organisation

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Introduction
Grameen Bank (GB) has reversed conventional banking practice by removing the need for
collateral and created a banking system based on mutual trust, accountability, participation
and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any
collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst
in the overall development of socio-economic conditions of the poor who have been kept
outside the banking orbit on the ground that they are poor and hence not bankable. Professor
Muhammad Yunus, the founder of “Grameen Bank” reasoned that if financial resources can
be made available to the poor people on terms and conditions that are appropriate and
reasonable, “these millions of small people with their millions of small pursuits can add up to
create the biggest development wonder.”

As of January, 2021, it has 9.41 million members, 97 percent of whom are women. With
2,568 branches, GB provides services in 81,678 villages, covering more than 93 percent of
the total villages in Bangladesh.

Grameen Bank’s positive impact on its poor and formerly poor borrowers has been
documented in many independent studies carried out by external agencies including the
World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh
Institute of Development Studies (BIDS).

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2.1 Historical Background
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. THE GRAMEEN BANK Project 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 manages by themselves; and Reverse
the age-old vicious circle of “low income, low savings & low investment”, into virtuous
circle of “low income, injection of credit, investment, more income, more savings, more
investment, more income”.The action research demonstrated its strength in JOBRA (a village
adjacent to Chittagong University) and some of the neighbouring villages during 1976-
1979.With the sponsorship of the central bank of the country and support of the nationalized
commercial banks, the project was extended to TANGAIL district (a district north of Dhaka,
the capital city of Bangladesh) in 1979. With the success in TANGAIL, the project was
extended to several other districts in the country. In October 1983, the GRAMEEN BANK
Project was transformed into an independent bank government legislation. Today
GRAMEEN BANK is owned by the rural poor whom it serves. Borrowers of the bank own
75% of its shares, while the remaining 25% is owned by the government.

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2.2 Objectives of Grameen Bank
The main objective of GRAMEEN BANK is by providing Comprehensive Financial
Services,
Empowering the poor to realize their potential and break out of the vicious cycle of poverty.
The objectives, which are spiffed by the GB, are mentioned bellow:
 To empower the rural poor especially the women who are seriously neglected and
ignored.
 To provide financial services exclusively to the poorest section of rural area which is
excluded from the formal credit institutions.
 To rescue the poor people from the informal moneylenders.
 To develop human capital in the rural areas through providing developmental
programs regarding education, health, nutrition, disaster management etc.
 To mobilize savings as a part of future nope for the poor.
 To reduce rural unemployment and dependency rate by offering self-employment
opportunities.

2.3 Mission of Grameen Bank

GRAMEEN Foundation's mission is to enable the poor, especially the poorest, to create a
world without poverty.
 To bring prosperity to our families,
 To repair houses and work towards constructing new houses as soon as possible,
 To grow vegetables all the year round. We shall eat plenty of them and sell the
surplus,
 To plant as many seeding as possible,
 To keep our families small. We shall minimize our expenditures. We shall look after
our health, To educate our children and ensure they can earn enough to pay for their
education,
 To keep our children and the environment clean,
 To build and use pit artiness. 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;

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2.4 Vision of Grameen Bank
GRAMEEN Foundation's vision is to enable the poor, especially the poorest, to create a
world with our poverty.

2.5 Grameen Bank Principles:

There are four Principles of Grameen bank are-
 Discipline
 Unity
 Courage
 Hard Work

2.6 Organization Nature:

Grameen Bank is a micro-credit Bank. It is an independent and separate Bank under
Bangladesh Bank. Although Grameen Bank authority claims it is not a fully bank or NGO. It
is different in characteristics. Actually, it is different from other banks and acts like NGO.

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2.7 Grameen Bank Achievements:
01. Best Corporate Award 2014 from the Institute of Cost and Management Accountants of
Bangladesh (ICMAB)
02. Awarded for pioneering role in Poverty Alleviation and Social Development in
Bangladesh
03. Norway: Nobel Peace Prize: 2006Awarded for efforts to create economic andsocial
development from below.
04. U.S.A.: Awarded Petersburg Prize 2004 by the Development Gateway Foundation,
U.S.A. in 2004.
05. INDIA: Awarded Gandhi Peace Prize: 2000 by Government of India.
06. UNITED KINGDOM: World Habitat Award: 1997 by Building and Social Housing
Foundation.
07. MALAYSIA: Awarded 1994 Tun Abdul Razak Award for the Bank’s unique programme
to lend money to the poorest of the poor and thus transform the lives of thousands of
impoverished people.
08. BANGLADESH:Awarded 1994 Independence Day Award for outstanding contribution
to Rural Development.
09. BELGIUM:Awarded The King Baudouin International Development Prize 1992 for its
recognition of the role of women in the process of development and the novelty of a financial
credit system contributing to the improvement of the social and material condition of women
and their families in rural areas.
10. SWITZERLAND: Awarded Aga Khan Award for Architecture, 1989 by Geneva based
Aga Khan Foundation for designing and operating Grameen Bank Housing Programme for
the poor, which helped poor members of Grameen Bank to construct 60,000 housing units by
1989, each costing on an average $ 300.

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2.8 Structure of Organization:
HEAD OFFICE
 40 ZONES, consisting of 5-10 Area Offices
 263 AREAS, consisting of 8-12 Branch Offices
 2583 BRANCHES, consisting of 50-65 centres
 87,000 CENTERS, consisting of 6-8 groups
 674,117 GROUPS of 5 members
■ The above structure is flexible and the organization is built upwards from the level of the
branch according to the demand for its services (i.e. Zones, Areas and Branches vary in size)
■ Pilot projects and experimentation dictate the organizational structure and its evolution

2.9 Numbers of Branches:

GRAMEEN BANK is a microcredit Bank in Bangladesh. Now GrameenBank has 211
Branches all over the Bangladesh. These branches carry out all its banking activities.

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2.10 Organogram of GRAMEEN BANK field operation:

HEAD OFFICE

1 ZO for 6—8 area

ZONAL OFFICE
offices

1 AO for 10-15
AREA OFFICE
Branches

1 Branch for 60-70

BRANCHES
Centres

1 Centre for 8-10

CENTER
Groups

GROUP

Each Group consists of 5 members

Chairman Secretary Member Member Member

Before going to our fieldtrip, it is essential to know about GRAMEEN BANK mission, vision
and how it is performing its field level activities.

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2.11GRAMEEN BANK at a Glance
Name of the Company GRAMEEN BANK

Founder PROF. MUHAMMAD YUNUS

Chairman DR.AKM SAIFUL MAJID

Board of Director& Sectary TOFAZZEL HOSAIN MIAH

Managing Director JAHANGIR HOSSEN HOWLADER

Date of Inauguration In October, 1983

Number of Branches 2568

Number of Employees 22000 (Approx.)

Number of Members 7.07 million US $

Registered Office Grameen Bank Bhaban, Mirpur-2,

Dhaka-1216
Authorized Capital Tk. 10000000000

Paid up Capital Tk. 734049100

Phone +88 02 9031138 , +88 02 9007596

Fax +880-2-9033559

E-mail giprog@grameen.com

Website www.grameen.com

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2.12 SWOT Analysis of Grameen Bank

Strengths:
 Rural area people negative thought
 Loan recovery system
 Job dissatisfaction
 Clash in rural families
 Opposition from traditional society
 Money supply shortage

Weaknesses:
 Nobel Prize winner
 High payback rates
 Outstanding Market Share.
 Solidarity Lending
 Women empowerment
 Community development

Opportunities:
Untapped & unbanked rural population
Lack of awareness
Exploration in other services.Like health, education etc.
Banking consultancy service for poor.

Threats:
Higher level of violence towards female recipients of Grameen loan
Greater conflict & power imbalance in orthodox families
New entrance into the market.
Local money lenders (charging high rate of interest)

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2.13 Method of Action
The Grameen Bank’s Method of action can be illustrated by the following
principles: [list]

1. 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 bankingtechnique.
2. Adopt a progressive attitude: development is a long-term process which depends on the
aspirations and commitment of the economic operators.
3. 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.
4. Establish priorities for action vis-a-vis to the target population: serve the most poverty-
stricken people needing investment resources, who have no access to credit.
5. 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.
6. Lean on solidarity groups: small informal groups consisting of co-opted members coming
from the same background and trusting each other.
7. Associate savings with credit without it being necessarily a prerequisite.
8. Combine close monitoring of borrowers with procedures which are simple and
standardised as possible.
9. Do everything possible to ensure the system’s financial balance.
10. Invest in human resources: training leaders will provide them with real development
ethics based on rigour, creativity, understanding and respect for the rural environment.

2.14 Credit Delivery System

Grameen Bank Credit Delivery means taking credit to the very poor in their villages by
means of the essential elements of the Grameen credit delivery system.

Grameen Bank credit delivery system has the following features:

1. There is an exclusive focus on the poorest of the poor.

Exclusivity is ensured by:

i. Establishing clearly the eligibility criteria for selection of targeted clientele

and adopting practical measures to screen out those who do not meet them
ii. In delivering credit, priority has been increasingly assigned to women
iii. The delivery system is geared to meet the diverse socio-economic
development needs of the poor

2. Borrowers are organized into small homogeneous groups. Such characteristics

facilitate group solidarity as well as participatory interaction. Organizing the primary
groups of five members and federating them into centres has been the foundation of

P a g e | 21
 Grameen Bank’s system. The emphasis from the very outset is to organisationally
strengthen the Grameen clientele, so that they can acquire the capacity for planning
and implementing micro level development decisions. The Centres are functionally
linked to the Grameen Bank, whose field workers have to attend Centre meetings
every week.
3. Special loan conditionality’s which are particularly suitable for the poor.
These include:

i. Loans given without any collateral

ii. Loans repayable in weekly instalments spread over a year
iii. Eligibility for a subsequent loan depends upon repayment of first loan
iv. Individual, self-chosen, quick income generating activities which employ the
skills that borrowers already posses
v. close supervision of credit by the group as well as the bank staff
vi. Stress on credit discipline and peer support solidarity.
vii. Special safe guards through savings to minimise the risks that the poor
confront
viii. Transparency in all bank transactions most of which take place at centre
meetings.

4. Simultaneous undertaking of a social development agenda addressing basic needs of

the clientele.
This is reflected in the “sixteen decisions” adopted by Grameen borrowers. This helps
to:

i. Raise the social and political consciousness of the newly organized groups
ii. Focus increasingly on women from the poorest households, whose urge for
survival has a far greater bearing on the development of the family
iii. Encourage their monitoring of social and physical infrastructure projects –
housing, sanitation, drinking water, education, family planning, etc.

5. Design and development of organization and management systems capable of

delivering programme resources to targeted clientele.
The system has evolved gradually through a structured learning process that involves
trials, errors and continuous adjustments. A major requirement to operationalize the
system is the special training needed for development of a highly motivated staff, so
that the decision making and operational authority is gradually decentralized and
administrative functions are delegated at the zonal levels downwards.
6. Expansion of loan portfolio to meet diverse development needs of the poor.
As the general credit programme gathers momentum and the borrowers become
familiar with credit discipline, other loan programmes are introduced to meet growing
social and economic development needs of the clientele. Besides housing, such
programmes include:

i. Credit for building sanitary latrines

ii. Credit for installation of tube-wells that supply drinking water and irrigation
for kitchen gardens
iii. Credit for seasonal cultivation to buy agricultural inputs
iv. Loan for leasing equipment / machinery, i.e., cell phones purchased by
Grameen Bank members

P a g e | 22
 v. Finance projects undertaken by the entire family of a seasoned borrower.
The underlying premise of Grameen is that, in order to emerge from poverty and remove
themselves from the clutches of usurers and middlemen, landless peasants need access to
credit, without which they cannot be expected to launch their own enterprises, however small
these may be. In defiance of the traditional rural banking postulate whereby “no collateral (in
this case, land) means no credit”, the Grameen Bank experiment set out to prove –
successfully – that lending to the poor is not an impossible proposition; on the contrary, it
gives landless peasants the opportunity to purchase their own tools, equipment, or other
necessary means of production and embark on income-generating ventures which will allow
them escape from the vicious cycle of “low income, low savings, low investment, low
income”. In other words, the banker’s confidence rests upon the will and capacity of the
borrowers to succeed in their undertakings.

The mode of operation of Grameen Bank is as follows. A bank branch is set up with a branch
manager and a number of canter managers and covers an area of about 15 to 22 villages. The
manager and the workers start by visiting villages to familiarise themselves with the local
milieu in which they will be operating and identify the prospective clientele, as well as
explain the purpose, the functions, and the mode of operation of the bank to the local
population. Groups of five prospective borrowers are formed; in the first stage, only two of
them are eligible for, and receive, a loan. The group is observed for a month to see if the
members are conforming to the rules of the bank. Only if the first two borrowers begin to
repay the principal plus interest over a period of six weeks, do the other members of the
group become eligible themselves for a loan. Because of these restrictions, there is substantial
group pressure to keep individual records clear. In this sense, the collective responsibility of
the group serves as the collateral on the loan.

Loans are small, but sufficient to finance the micro-enterprises undertaken by borrowers:
rice-husking, machine repairing, purchase of rickshaws, buying of milk cows, goats, cloth,
pottery etc. The interest rate on all basic loans is 20 percent equivalent to 10 percent at the
flat rate. The repayment rate on loans is currently – 98.92 per cent – due to group pressure
and self-interest, as well as the motivation of borrowers.

Although mobilization of savings is also being pursued alongside the lending activities of the
Grameen Bank, most of the latter’s loanable funds are increasingly obtained on commercial
terms from the central bank, other financial institutions, the money market, and from bilateral
and multilateral aid organizations.

2.15 10Indicators
Muhammad Yunus

P a g e | 23
Every year GB staff evaluate their work and check whether the socio-economic situation of
GB members is improving. GB evaluates poverty level of the borrowers using ten indicators.

A member is considered to have moved out of poverty if her family fulfils the following
criteria:

1. The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house
with a tin roof, and each member of the family is able to sleep on bed instead of on the floor
(A)

2. Family members drink pure water of tube-wells, boiled water or water purified by using
alum, arsenic-free, purifying tablets or pitcher filters.
3. All children in the family over six years of age are all going to school or finished primary
school.
4. Minimum weekly loan instalment of the borrower is Tk. 200 or more
5. Family uses sanitary latrine.
6. Family members have adequate clothing for everyday use, warm clothing for winter, such
as shawls, sweaters, blankets, etc., and mosquito-nets to protect themselves from mosquitoes.
7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc.,
so that they are able to fall back on these sources of income when they need additional
money.
8. The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts.
9. Family experiences no difficulty in having three square meals a day throughout the year, i.
e. no member of the family goes hungry any time of the year.
10. Family can take care of the health. If any member of the family falls ill, family can afford
to take all necessary steps to seek adequate healthcare.

2.16 Loan Schemes:

There are three types of loan schemes available for Grameen Bank borrowers (1) Basic Loan,
Basic Loan
1.2 Microenterprise Loan.
1.2.1. Leasing Loan
1.2.2. Village Phone Loan
1.2.3. Livestock loan
1.2.4. Festival loan
1.2.5. Bridge loan
1.2.6. ME House loan
1.2.7. New Entrepreneurs Loan
1.2.8. Cultivation Loan
(2) Housing Loan and (3) Education Loan. (4) Struggling Member Loan (5) Centre House
cont. Loan. These loan schemes shall be disbursed in accordance with Grameen Banks loan
guidelines.

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A member shall operate four different saving schemes.
(A)Personal Savings..............................................................3.5%--5%
(B)GPS (Grameen Pension Scheme) 5to 10 Years...............6%
2.16.1 Loan Insurance Savings.
Additional Savings:
(a) Fixed Savings............................................ (FDR- 7.00%-7.50%)
(b) 9 Years Double Savings...........................8.70%
(c) Monthly Profit Scheme.
(d) Family welfare savings............................. (Only for GB member and staff 7.00%)
(e) Two years savings.................................... (Compound 6.50%)
(f) Loan Insurance saving (Only for GB members, their husband and Employee)

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 ChapterThree:
Analysis andFinding

3.1 FINANCIAL PERFORMANCE ANALYSIS

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Financial performance analysis of Grameen Bank mainly measures their assets in business
and they generate revenues. They measure of how their bank can use their assets and generate
profit from assets. Financial analysis also measures Grameen Bank overall financial activities
for a period of time. Grameen Bank also compare with their competitor like as Asa Bank and
others microcredit bank. Financial analysis of Grameen Bank assessment their financial
durability, sustainability and their profitability of the Bank. Financial analysis of Grameen
Bankperformed by professionals its report using ratios that information use from their
financial statements and their other financial reports. Financial performance analysis report
prepared to help top level management for making future strategically decision. That analysis
also assessment or virtualize their overall organization overview. Financial analysis forms the
interpretation of balance sheet and income statement of Grameen Bank. Here the ratio and
trend analysis from balance sheet and income statement.

3.2 Source of Fund

 Share Capital
Public share (Grameen Bank’s Member only).............75%
Government Share .......................................................25%
Provision Reserve & Bad debt recovery

 Borrowing
Public Borrowing (Member/Non-member saving /deposit )
Institutional Borrowing (Loan)
Other Reserves (Revolving Fund & Grants)
Retained Surplus

3.3 Grameen Bank Share Capita Distribution

Description Share% Number Amount
Bangladesh Govt 24.12% 2080000(2.08M) 208000000(208M)
Sonali Bank .35% 30000(.03M) 3000000(.03M)
Bangladesh Krishi .35% 30000 (.03M) 3000000(.03M)
Bank
Govt. Share 24.82% 2140000(2.14M) 214000000(214M)
2.52Million US$
Male Borrowing 2.22% 191247 19124700
Female Borrowing 72.96% 6290324 629032400

Member Share 75.18& 6481571(6.48M) 648157100(648.16M)

7.62 Million US$
Total 100% 8621571(8.62M) 862157100(862.16M)
10.14 Million US$

3.4 Analysis of Liquidity Ratio

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Liquidity ratios attempt to measure a company’s ability to pay off its short-term debt
obligations. This is done by comparing a company’s most liquid assets (or those that can be
easily converted into cash) and its short-term liabilities.
3.4.1 Liquidity Ratio/ Current Ratio
It shows the bank’s ability to cover its current liabilities with its current assets. The higher the
Current ratio, the better the liquidity position of the firm. It is expressed as:
Current Ratio= Total Current Assets/Total Current Liabilities
Year 2015 2016 2017 2018 2019
Current Ratio 1.49 1.37 1.56 1.47 1.44
Source:Annual report of GRAMEEN BANK (2015--2019)

Graphical Presentation

Current Rati o
1.6

1.56
1.55

1.5
1.49
1.47
1.45
1.44

1.4
1.37
1.35

1.3

1.25
2015 2016 2017 2018 2019

Figure: 1: Current Ratio for year (2015 to 2019)

The higher the current ratio, the more liquid the firm is considered to be. The graph show that
current ratio of Grameen Bank fluctuated over of the year

3.5 Debt Ratio Analysis:

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The debt position indicates the amount of other people’s money being used for generates
profit. In general, the more debt Grameen Bank uses in relation to its total assets, the more
the financial leverage.
The debt ratio measures the proportion of total assets financed by the firm’s creditors. The
higher the ratio, the greater the amount of other people’s money being used to generate
profits.
The ratio is calculated by,

Debt Ratio= (Total liabilities/Total assets) x 100

Year 2015 2016 2017 2018 2019

Total Liabilities 168,542 190,318 209,658 217,015 225,330
Total Assets 178,936 200,961 220,360 229,360 239,619
Debt Ratio % 94.19 94.70 94.92 94.62 94.04
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

Debt Ratio
95

94.92
94.8

94.7
94.6 94.62

94.4
94.4

94.2
94.19

94

93.8
2015 2016 2017 2018 2019

Column1

Figure: 2: Debt Ratio for year (2015 to 2019)

Debt ratio measures the financial leverage of a company. The graph shows a fluctuating trend
in GB’s debt ratio. However, the debt ratio decreased from 94.19% in 2015 to 94.04% in
2019

3.6 Analysis of Activity Ratio:

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Activity ratio measures how effectively the bank is using the assets. In other word, it
measures the speed with which various accounts are converted into sales or cash inflows.

3.6.1 Total Asset Turnover Ratio:

The total asset turnover ratio indicates the efficiency of GrameenBank, which the firm able to
use its assets to generate sales. But for bank, I took operating income alternative to sales.
It is calculated by,
Total Asset Turnover= Operating income/Total asset
Year 2015 2016 2017 2018 2019
Total Operating 13,579 14,015 15,330 16,935 19,315
Income
Total Assets 178,936 200,961 220,885 229,360 239,619
Total Assets 7.59 6.97 6.94 7.38 8.06
Turnover
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

Total Assets Turnover

9

8 8.06
0
7.59
0
7.38
0
7 6.94
0
6.67
0
6

0
2015 2016 2017 2018 2019

Figure: 3: Total Asset Turnover Ratio for year (2015 to 2019)

The total asset turnover indicates the efficiency of Grameen Bank, which the firm able to
useall its assets to generate revenue. The graph shows that the total asset turnover of GB in
lastfive years has fluctuated. However, the total asset turnover has increased from 7.59 in
2015 to 8.06 In 2019

3.7 Analysis of Profitability Ratio

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These measures evaluate bank’s earning with respect to a given level of sales, a certain level
of assets, and the owner’s investment and share value.
3.7.1 Net Profit Margin:
The net profit margin measures the percentage of revenue remaining after all expenses,
including taxes have been deducted. The higher the net profit margin the better it is fir the
company.
Net Profit Margin= (Net Profit after Tax/Net Sales or Operating Income) x 100
Year 2015 2016 2017 2018 2019
Net Profit 1,332 436 24 1,392 2,275
After Tax
Operating 13,579 14,015 15,330 16,935 19,315
Income
Net profit 9.81 3.11 .16 8.22 11.78
margin( % )
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

Net Profit Margin

11.78
12

9.81
10
8.22

4 3.11

2
0.16
0
2015 2016 2017 2018 2019

Figure: 4: Net Profit Marginfor year (2015 to 2019)

The graph shows that net profit margin of GB fluctuated over of the year. The net profit
margin ratio has decreased from 9.81% in 2015 to 0.16% in 2017. However, the net profit
margin has increased from 0.16% in 2017 to 8.22% in 2019.

3. 7.2 ROA-Return on Asset:

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Return on assets of Grameen Bank gives an idea of how efficiently the bank is using its assets
to generate profit. Return on asset calculated by dividing the annual earning of the bank by
the total assets.
ROA= Net Profit after tax/Total Asset x 100
Year 2015 2016 2017 2018 2019
Net Profit 1,332 436 24 1,392 2,275
After Tax
Total Assets 178,936 200,961 220,885 229,360 239,619
Return on .74 .22 .01 .61 .95
Asset (%)
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

Return on Assets
1
0.95
0.9

0.8
0.74
0.7

0.6 0.61

0.5

0.4

0.3

0.2 0.22

0.1

0 0.01
2015 2016 2017 2018 2019

Figure: 5: Return on Assets for year (2015 to 2019)

The return on Asset ratio fluctuated over of the years. The return on Asset was highest in
2019which was 0.95%. However, the return on asset has decreased from 0.74% in 2015 to
0.01% in 2017.

3.7.3 ROE-Return on Equity:

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Return on equity ratio measures by corporation’s profitability, how much profit they
generate. And how much money that shareholders invested. It was calculated by
Return on Equity(ROE) = Net Profit after Tax/Shareholders Equity) x 100
Year 2015 2016 2017 2018 2019
Net Profit 1,332 436 24 1,392 2,275
After Tax
Shareholder’ 10,394 10,642 11,227 12,345 14,288
s
Equity
ROE (%) 12.81 4.1 .21 11.28 15.92
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

rReturn on equity
18

16 15.92

14
12.81
12
11.28
10

4 4.1

0 0.21
2015 2016 2017 2018 2019

Figure: 6: Return on Equity for year (2015 to 2019)

The return on Asset ratio has fluctuated over the years. The return on Asset was highest in
2017 which was 15.92%. However, the return on asset has decreased from 12.81% in 2013 to
0.21% in 2015.

3.7.4 Cost Income Ratio:

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The Cost Income Ratio (CIR) or Cost-to-Income Ratio shows the relation between income
and the cost of acquiring that income. The lower the bank’s CIR ratio, the more efficient the
bank is. It was calculated by
Cost Income Ratio= (Total Operating Expenses/Total Operating Income) x 100
Year 2015 2016 2017 2018 2019
Total Operating 8,134 8,808 10,111 13,552 14,421
Expenses
Total Operating 13,579 14,015 15,330 16,935 19,315
Income
Cost Income 59.9 62.85 65.96 80.02 74.66
Ratio (%)
Source:Annual report of GRAMEEN BANK (2015--2019) Taka in Million

Graphical Presentation

Cost Income Ratio

90

80 80.02
74.66
70
65.96
62.85
60 59.9

50

40

30

20

10

0
2015 2016 2017 2018 2019

Figure: 7: Cost Income Ratio for year (2015 to 2019)

The cost income ratio measures the efficiency of the management in controlling expenses.
The Graph shows that the cost income ratio of Grameen Bank fluctuated over of the years.
However, the cost income ratio increased from 59.9% in 2015 to 74.66% in 2019. It indicates
that the bank failed to reduce their cost relative to income.

3.8Balance Sheet (2015--2019)

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 Property 2015 2016 2017 218 2019
and Assets
Cash in hand 1,268,475 109,414 161,573 9,993 144,595
Balance with 106,410,0403 94,102,950,320 77,167,176,622 88,987,061,125 105,616,583,94
other Banks 13 4
Investment 267,000,000 260,500,000 260,500,000 260,500,000 260,500,000
Loans and 101,085,978, 123,829,293,751 152,044,335,26 163,153,800,718 168,669,317,85
Advance 600 4 0
Fixed assets 1,418,947,19 1,410,924,723 1,417,866,726 1,428,332,021 1,461,124,851
(at cost less 9
accumulated
depreciation)
Investment 93,792,650 85,630,085 83,375,361 81,120,636 7,886,5912
Property(at
cost less
accumulated
depreciation)
Other assets 11,608,389,1 9,671,496,21 8,645,638,854 9,643,021,707 10,365,203,498
16
Total: 220,885,443, 229,360,904,506 239,619,054,40 263,553,846,200 286,451,740,65
353 0 0
Capital and
Liabilities
Share
capital;
Authorised 10,000,000,0 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000
00
Paid up 835,814,300 853,815,400 862,157,100 898,092,300 952,151,200

Capita and 10,391,454,4 11,491,761,031 13,426,365,718 16,538,191,518 20,817,714,174

other service 65
Revolving ---- ----- ---- ----- ------
Fund
Deposit and 195,597,636, 205,555,302,237 213,844,011,02 232,557,434,086 251,409,376,46
other funds 346 6 1
Borrowing 1,278,737,94 1,216,699,451 1,370,217820 2,280,440,730 2,879,359,524
from banks 0
and foreign
Institutions
Other 12,781,800,3 10,243,326,387 10,116,302,736 11,279,687,566 10,393,139,291
Liabilities 02
Profit and ---- ------ ----- ----- -----
loss Account
Total 220,885,443, 229,360,904,506 239,619,054,40 263,553,846,200 286,451,740,65
353 0 0
Current ----- ------ ----- ----- ----
Liabilities

3.9 Past Five Years at a Glance (2015—2020)

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 Past Five Years at a Glance (2015--2020)

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 Sl.N Particulars 2015 2016 2017 2018 2019
o.
1.0 Authorized Capital 10000 10000 10000 10000 10000
2.0 Own Fund :
2.1 Paid-up Capital 836 854 862 898 952
2.2 Capital and Other Reserve 10391 11492 13427 16538 20818
2.3 Miscellaneous 5793 5748 5496 5991 7579
2.4 Total : 17020 18094 19785 23427 29349
3.0 Deposits 189804 199807 208348 226567 243830
4.0 Other Sources of Fund 12782 10243 10116 11280 10393
5.0 Borrowings 1279 1217 1370 2280 2880
6.0 Assets :
6.1 Loan and Advances (Before 101086 123829 152044 163154 168669
Provision)
6.2 Investment 267 261 261 261 261
6.3 Cash and Bank Balance 106411 94103 77167 88987 105617
6.4 Fixed Assets 1513 1497 1501 1509 1540
6.5 Other Assets 11608 9671 8646 9643 10365
6.6 Total Assets 220885 229361 239619 263554 286452
7.0 Own Fund as Percentage of 17% 15% 13% 14% 17%
Loan & Advances
8.0 Own Fund and Deposits as 205% 176% 150% 153% 161%
Percentage of Loan & Advances
9.0 Total Income 3135522 32115 35135 39526 43333
10.0 Expenses :
10.1 Salaries & Other Related 7572 11027 11664 11823 12156
Expenses
10.2 Interest Expenses 16022 15181 15820 17232 18980
10.3 Other Expenses 2539 2525 2757 3394 4679
10.4 Provision Expense 5195 1990 2619 3592 2794
10.5 Total Expenses 31328 30723 32860 36041 38609
11.0 Net Profit 24 1392 2275 3485 4723
12.0 Provision Balance 10080 7645 7435 8329 7026
13.0 Bad Debt 5052 44426 2827 2690 4094
14.0 Bad Debt Recovery 2198 1050 1152 957 1061
15.0 Accumulated Disbursement 1230183 1417716 1652431 1899241 2153615
(including housing loans)
16.0 Number of Employees 21651 21043 18185 18105 18053
17.0 Number of Members 8806779 8901610 8934874 9084503 9260176
18.0 Number of Centers 142573 142087 140262 138143 137141
19.0 Number of Villages 81392 81395 81400 81677 81678
20. Number of Branches 2568 2568 2568 2568 2568

Financial Intermediation Indicators (In billion BDT)

Particulars (In Billion Taka)
2015 2016 2017 2018 2019

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 Balance of Deposits 190.00 200.00 20.800 226.57 243.83
Balance of Loan & 101.09 123.83 152.04 163.15 168.67
Advances
Balance of borrowings 1.28 1.22 1.37 2.28 2.88
Deposit to Loan Ratio 188% 162% 137% 139% 145%
Deposit to Borrowings Ratio 14844% 16393% 15208% 9937% 8466%

Sources of Fund as on 31st December 2019 (In million BDT)

Sl. No. Particulars Amount

1.0 Borrowings
1.1 Domestic Borrowings
1.1.1 Commercial Bank 1849 1849
1.2 Foreign Borrowings
1.2.1 Term Loans 480
1.2.2 Loans at Perpetuity 551 1031
Total : 2880
2.0 Deposits
2.1 Borrowers’ Deposits 170884
2.2 Non-Borrowers’ Deposits 72946 243830
3.0 Own Fund
3.1 Paid up Capital 952
3.2 Capital & Other Reserve 20818
3.3 Miscellaneous 7579 29349
4.0 Other Sources 10393
Total : 286452

Pension Benefits Paid to Retired Employees (In Million BDT)

Period Number of Retired Employees Payment of Pension Benefits
Yearly Total Cumulative Yearly Total Cumulative
2015 85 9728 189 8590
2016 416 10144 1591 10181
2017 419 10563 1557 11738
2018 403 10966 1682 13420
2019 441 11407 1985 15405
3.10Disbursement of Loans under Board Categories of Activity Upto
December 2020

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 Disdursement Of Loans Under Broard catagories Of Activity
Upto December 2020

19 1
10
18
2

18

32

Shopkeeping Processing & Manufacturing Agricultre & Forestry Livestock & Fisheries Services Trading

3.11Outstanding of Loans from (2015—2020)

Outstanding Of Loans From 2015--2020

180000

160000

140000

120000

100000

80000

60000

40000

20000

0
2015 2016 2017 2018 2019 2020

3.12Cumulative Disbursement of Loans from 2015--2020

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 Cumulative Disbrsement Of Loans from 2015--2020
2500000 12
2328446
2153615
10
2000000 1899241

1653430
8
1500000 1417715
1230183
6

1000000
4

500000
2

0 0
2015 2016 2017 2018 2019 2020

3.13 MAJOR FINDINGS

Financial analysis of Grameen Bank reveals the following major findings:
 Current ration of Grameen Bank has fluctuated over years. However, Current ratio of the
firm 1.49 in 2015 to 1.44 in 2019.
 GRAMEEN BANK has decreased leverage position by decreasing its debt ratio from
94.19% in 2015 to 94.04% in 2019.
 The total asset turnover has increased from 7.59 in 2015 to 8.06 in 2019.
 The Return on Asset and Return on equity fluctuated over of the years of the analysis.
 The cost income ratio of Grameen Bank increased 59.9% in 2015 to 74.66% in 2019.

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 Chapter Four:
Conclusion & Recommendations

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4 Chapter Four: Conclusion & Recommendations
4.1 RECOMMENDATIONS
The following recommendations can be made to improve the financial performance of
GRAMEEN BANK.
The decreasing trend in the current ratio will increase the liquidity risk of the bank.
Therefore, the bank can increase its current asset to expand its current ratio, considering the
aspect of high liquidity on income.
The bank should reduce the cost of fund to have an increasing trend in profitability.
GRAMEEN BANK should reduce operating expenses to minimize the cost income ratio.

4.2 CONCLUSION
GRAMEEN BANK the bank for the poor without collateral has astonished the world. It has
made micro-credit a history. No other banks have given access to the poor. It is the
GRAMEEN BANK and only the GRAMEEN BANK which turned it into a reality. It doesn’t
have any liquidity problem. It has more current assets than current liabilities. So there is no
chance of insolvency. It doesn’t possess any financial risk. From the study, it is seen that the
bank is utilizing its assets well enough to generate profit. Its asset turnover ratio has increased
in recent years. Cost management is an essential part of the bank. In the case of cost
management, the bank hasn’t made enough efforts. The cost to income ratio shows that the
banks cost relative to income has increased over the years. The management could have done
a better job in this part. In the case of revenue, the study shows that in the year 2015, the bank
had the lowest net profit margin, which was 0.16%. The next two years it jumped up. It was
8.22% in 2016 and 11.78% in 2019. It shows that in the past two years, the bank had
performed well. The return on assets and return on equity also shows the same trend as the
net profit margin. Both of them were the lowest in 2015 and then jumped up in 2016 and
2017. It is because all of them are related to net profit after tax. As the net profit after tax rose
in 2016 and 2017, the ROA and ROE increased. It shows that the bank was very efficient in
these two years compared to the previous years

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BIBLIOGRAPHY
 GRAMEEN BANK, 2020, Annual Report of 2019, Dhaka, Bangladesh
 GRAMEEN BANK, 2019, Annual Report of 2018, Dhaka, Bangladesh
 GRAMEEN BANK, 2018, Annual Report of 2017, Dhaka, Bangladesh
 GRAMEEN BANK, 2017, Annual Report of 2016, Dhaka, Bangladesh
 GRAMEEN BANK, 2016, Annual Report of 2015, Dhaka, Bangladesh
 GITMAN, L.J. (2013), “Principles of Management Finance”, 12th Edition
 GRAMEEN BANK LIMITED, annual report (2015--2019), Dhaka, Bangladesh.
 Prospectus of GRAMEEN BANK
 www.grameen.com
 http://www.grameen-info.org

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