GRAMEEN BANK II

From “Banker to The Poor: Micro

Lending and The Battle Against World
Poverty” (Chapter 13)
By Muhammad Yunus’

Syadza Salsabyla Tamam

MPWK UGM 2023
 Grameen Bank II
Equity of the Bank
Since it started in 1976
7%
• 1,181 branches
• 42,127 villages
• 11,777 staffs
• $3.9 billion loan disbursed (174.78 billion takas)
• $3.6 billion has been repaid (161.33 billion takas)
• 98% of recovery rate

93%
Self reliance
2.6 million
borrowers - since 1995: not request any more fund
(95% are women)
Borrowers Bangladeshi Govt - in 1998: the last instalment of donor fund
 Grameen Bank II
In 1998
 Devastating flood
 Borrowed 1 billion takas from Central Bank of Bangladesh
 Borrowed 2 billion takas from commercial banks
 To give fresh loans to the borrowers who lost their assets  Fully paid off
Administrative
 Profit every year except 1983, 1991 and 1992
 proving that businesses with social objectives can and do work
 Publishes audited balance sheet every year, audited by 2 Bangladeshi audit firms of international repute

Income Higher
Housing All interests are simple
generating education
3 types of loan loans (8% interest, calculated on a
loans (20% loans (5%
interest rate) declining balance method
interest rate) interest rate)
Grameen and Education
Grameen believes that education is one of the primary

components for moving oneself out of poverty

• 466 students have received the loans so far
• Scholarships given to the children of Grameen members
every year
• An average of 3,700 children at various levels of education
receive these scholarships every year
• Investing in the future members
Institution Development
• In 2001 a program launched which has been developed since
2000 with staff participation in designing the product
• To convert operational methodology into a newer version called

the Grameen Generalized System (GGS)

• Concerned about 41,000 villages without subjecting hundreds
of thousands of illiterate borrowers to a large shock and
messing up the accounts in 1,175 branches
• It came to real functioning program in August 2002 with much
better equipped micro-credit institution
Flexible Loan
• The goal to simplify life for the borrowers with GGS
• Basic loan and flexible loan
• Flexible loan is the exit option of basic loan
• A rescheduled basic loan with its own separated rules
• Borrowers can reduce the installment size that she

can afford to pay by extending the loan period

• Rescheduling a loan is not seen as an offense or something
to be disapproved of
• This gives the borrower a dignified way to deal with any
problem she may face in repaying her loan
Other Innovation
from GGS

• A methodology to provide custom-made credit for poor

borrowers  any duration
• GGS requires all borrowers with loans above 8,000 takas
($138) to contribute a minimum of 50 takas ($0.86) each
month to a pension savings account
• GGS emphasizes receiving deposits from borrowers and
nonborrowers  total amount of deposits : 70%
• Loan insurance savings account filled by borrowers on
the last day of every year (to cover loan if they die)
Creating Five Star Branches
• Grameen Bank provides color-coded stars to branches for 100 percent achievement of a specific task.
• Five stars indicate a branch has reached the highest level of performance.
• In 2002, out of 1,178 branches:
696 branches : maintaining 100% repayment record
437 branches : earning a profit (from the interest payments made by the branches on the funds borrowed from the head office)
213 branches : generating a surplus of deposits over the loans
61 branches : ensuring an education for 100% of the children of Grameen families
21 branches : taking 100 % of their borrowers’ families over the poverty line
TOTAL : 772 branches received total 1,346 stars, an average of 1.74 stars per branch
“
Grameen Bank II has defined micro-credit in very simple terms.
It has provided a powerful methodology to achieve its mission.
Coming years will show what impact it makes in the lives of the
poor in Bangladesh and globally. It has already proven to be a
wonderful and exciting experience for Grameen staff members
and the borrowers.
It has raised our work to a new level of efficiency and
effectiveness.
Thank you