...Grameen Bank and Microcredit Name Course Course Instructor Institutional Affiliation Date Introduction It is often contended that the monetary sector in low-income nations has failed to serve the impoverished. Considering the formal sector, financial institutions as well as banks generally necessitate significant collateral, have bureaucratic and lengthy application process and have a preference for high loan and high-income clients. For the informal sector, usurers often charge extremely high-interest rates, often permit sexist or racist attitudes to direct their lending decisions and tend to undervalue collateral (Kuhinur & Rokonuzzaman, 2010). Accordingly, the failure of informal and formal financial sectors to offer affordable credit to the deprived is usually perceived as a factor among others that reinforces the social, demographic and economic structures that eventually cause poverty. Consequently, "micro-credit" was developed to address this failure and decades has seen a significant growth in this sector. Microfinance over the years has received several donor endorsement to be the most viable anti-poverty initiative. This is because it targets and reaches the impoverished, especially women, and also small entrepreneurs and producers who more often than not have a limited formal access to traditional banking systems. Micro-credit is, in essence, the dispersion of diminutive collateral-free loans to equally liable groups so as to foster income creation...
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...Grameen Bank: Taking Capitalism to the Poor Evaristus Mainsah* MBA ’04 Schuyler R. Heuer MBA ’04 Aprajita Kalra MBA/MIA ’04 Columbia Business School Columbia University School of International and Public Affairs Qiulin Zhang MPA ’04 Columbia University School of International and Public Affairs This paper was written as part of the course Emerging Financial Markets taught by David O. Beim, professor of professional practice, at Columbia Business School in fall 2003. The authors are grateful for his invaluable feedback. © 2004 by The Trustees of Columbia University in the City of New York. All rights reserved. CHAZEN WEB JOURNAL OF INTERNATIONAL BUSINESS SPRING 2004 www.gsb.columbia.edu/chazenjournal * Corresponding author (EMainsah04@gsb.columbia.edu). Executive Summary In the early 1970s, Professor Muhammad Yunus envisioned a means of alleviating poverty by circumventing the major impediment to lending to the poorest in society—the need for collateral. He tested this instinct in an experiment in 1976, when he lent about $27 to 42 women in an ordinary Bangladeshi village. Just 30 years later, Grameen Bank has more than 3.2 million borrowers (95 percent of whom are women), 1,178 branches, services in 41,000 villages and assets of more than $3 billion. This paper explores Grameen Bank’s origins, structure, culture, performance and efforts to expand and broaden the microfinance agenda. The authors evaluate Grameen’s success in implementing Yunus’s vision...
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...October 8, 2015 “Professor Muhammad Yunus, founder and managing director of Grameen Bank, said that if an institution could make financial resources available to the poorest people in Bangladesh, then ‘these millions of small people with their millions of small pursuits can add up to create the biggest development wonder.’" Grameen Foundation Muhammad Yunus: banker, economist, professor, author, founder of the Grameen Bank, founding member of Global Elders, World Food Prize winner (1994), Nobel Peace Prize Laureate (2006), recipient of the Presidential Medal of Freedom (2009), and the recipient of 26 honorary doctorate degrees and more than sixty other special awards. There is little to no doubt that the man is accomplished, hailed as the father of microcredit and a pioneer of microfinance. However, his success lies in something seemingly marginal and that much more brilliant, which distinguishes him as an intellectual and a thinker worthy of a place on the thinkers.com top 50 list. The idea of microcredit was first brought to light by Dr. Akhtar Hameed Khan (founder of the Pakistan (now Bangladesh) Academy for Rural Development). Yunus, a follower of Dr. Khan’s work, sought to implement the concept as a unique social business model aiming to eradicate poverty, starting with Bangladesh. With banks refusing to provide loans to ‘high-risk’ markets, Yunus felt that the poor were left at a disadvantage, unable to escape the grip of poverty. “To Muhammad Yunus, micro-credit...
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...Grameen Bank The Grameen Bank (Bengali: গ্রামীণ বাংক) is a microfinance organization and community development bank started in Bangladesh that makes small loans (known as microcredit or "grameencredit"[4]) to the impoverished without requiring collateral. The word "Grameen" is derived from the word "gram" and means "rural" or "village" in Bangla language . The system of this bank is based on the idea that the poor have skills that are under-utilized. A group-based credit approach is applied which utilizes the peer-pressure within the group to ensure the borrowers follow through and use caution in conducting their financial affairs with strict discipline, ensuring repayment eventually and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. Another distinctive feature of the bank's credit program is that the overwhelming majority (98%) of its borrowers are women. The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, a Fulbright scholar at Vanderbilt University and Professor at University of Chittagong, launched a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation. The organization and its founder...
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...About Grameen Trust Grameen Trust (GT) came into being in 1989 with the sole objective of turning the Grameen philosophy into reality by working alongside those struggling to remove poverty. Grameen Trust is committed to the cause of poverty alleviation, promoting the Grameen Bank Approach (GBA) and providing financial and technical support to Grameen Bank Replication Projects (GBRPs) worldwide. It also directly implements microcredit programs in areas where there is no sustainable microcredit project for the poorest. Grameen Trust has a lot of Donor Partners, such as Rockefeller Foundation, UNCDF, World Bank, USAID, UNHCR, Citigroup Foundation, Commonwealth Secretariat, Whole Planet Foundation etc. Grameen considers "Credit as a human right". That is the reason why Grameen Trust is doing such a successful job through expanding its global operation of establishing sustainable microcredit programs for poverty alleviation around the world. GT has 141 partners in 38 counties all over the world, in America, Europe, Africa, Asia and Pacific. Vision: Grameen Trust envisions a poverty free world. Mission: To reduce poverty primarily through the promotion of poverty focused microcredit programs around the world following Grameen Bank Approach. Objectives: - To support and promote GB type programs to reduce poverty - To publish materials aimed at disseminating information about Grameen Bank Replication Programs (GBRP) and drawing the attention of all concerned to the deep...
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...There are many people and many ideas aimed towards ending poverty in countries across the world. Two men have come up with, and implemented their ideas in primarily African villages in the past 30 years, and in both cases there have been positive effects. Economist Jeffrey Sachs of the Earth Institute in New York has created an idea called the Millennium Village’s Project. 2006 Nobel Peace prize winner Mohammed Yunus has come up with an idea known as the Grameen Bank. Both men’s ideas have shown positive changes in the communities in which these solutions have been implemented. After researching both of these topics extensively the Grameen Bank solution seems to be the least complex, most sustainable and most rewarding solution. This essay will expand into why the Grameen Bank solution is superior to the Millennium Village’s Project. Jeffery Sachs Millennium Villages Project focuses on a holistic approach to elimination poverty. Some of the things that the Millennium Villages Project focuses on is community health workers, diversified local food production, commercial farming, malaria control, piped water, solar electricity, and connectivity to name a few. These multiple tools are synergistic—while each has been proven to support its main target, each also contributes to progress on several or all of the goals. (Millennium Villages, 2012) Sachs believes that if you focus on these key topics that the quality of life in these countries will improve. The cost of this program is...
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...CHAPTER-1 INTRODUCTION Stock exchange play a pivotal rate in the economic development of under developed developing and least developed countries like Bangladesh. It contributes to the development of economy through the development of business and industries. It can perform well to meet financial needs of business enterprises on a continuous basis. Stock market in considered to be parameter of the economy. It is mechanism to flow fund from the hands of small savers (Individual and Institution) at low costs of those entrepreneurs who do need fund to start business an to expend capacity of existing business as to add new line of business. In other words, this capital market mechanism gives a part ownership of by companies to small savers scheme to share ownership of economic development with general public. Stock refers to shares bands. Debentures, mutual funds, derivates and future and option. Market refers to the way of exchanging assets usually cash for smoothing of value. So, we can say in a word, stock market in a market for trading products of stock market. Stock exchange is an independent company formed by shareholders members. It can take various decision independently the objectives of stock exchanges are to protect the interests of the investors and promote just and equitable principles of trade. The Chittagong Stock Exchange has been established in 1995 as a model of International Standard. Considering the import role of Chittagong Stock Exchange in the development...
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...Grameen Bank, Bangladesh Need/Objective: To empower the poor there is a need for fair access to finance. Since conventional banking makes lending decisions based on a borrower's existing assets (collateral), those who have nothing get nothing. 50 percent of the population of Bangladesh lives on less than USD 1 per day. If they needed money, they traditionally had to turn to local money lenders who charged extremely high interest rates and frequently entrapped the borrowers in a spiral of debt. Broadly the objectives of Grameen Bank are as follows. * To promote financial independence among the poor by extending 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 * Impart Financial Literacy among rural poor * 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’ Social business solution: In 1976, Prof. Yunus lent USD 27 to 42 people - focusing on the poorest of the poor. This led to the innovation of micro finance and the foundation of the Grameen Bank in 1983. This Bank lent money without collateral...
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...Presented to – Adeyl khan, course instructor: MIS 205, Sec: 3 Group Assignment-1 Due date: 14.6.2012 2012 Report on an organization Grameenphone Sadi mohammad- 1110725030 Abu Shoaib khan- 1020722030 Grameenphone – An Overview Since 1997 the widely acclaimed “Village Phone Program” of Grameenphone – a joint venture telecom company, set up by Grameen Bank, with foreign (Norwegian) capital3 – has provided telephones to 39,000 villages in Bangladesh, bringing access to the telephone networks to some 70 million people. This extraordinary achievement is rightly cited in the development literature as a success, an innovation which managed to bring the Information Society to the remotest and most unlikely places of the country. Most studies of the initiative have focused on the socio-economic benefits that new technology such as cell phones can bring rural communities, giving the impression that the program is philanthropic in intention, presenting Grameenphone as a not-for-profit organization devoted to providing connectivity for the poor. This assumption does not reflect reality. GP is above all a business. The company provides a good example of a multi-stakeholder partnership, as recommended in the Plan of Action of the World Summit on the Information Society (WSIS) held in Geneva in December 2003.4 It highlights the role of the private sector not only as a market player but also as an effective and dynamic stimulator of development. This case-study...
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...Mohammad Yunus I found the lecture by Muhammad Yunus to be very interesting. At first I was wondering why an economist and bank owner was given the Nobel Prize for Peace and not Economics. Through the address he made, it became more apparent as to why he an industry like Grameen Bank received such recognition. By making a clear connection between poverty and the prospect of peace, Grameen Bank is fighting poverty and promoting peace. As long as people are in poverty, they suffer from anger, frustration, and hostilities that make it impossible to sustain peace in their society. With poverty all around Yunus, he couldn’t ignore it anymore, he couldn’t teach about the adverse effects of poverty in an economic system while people living within walking distance of the university knew nothing other than poverty. Since he created the Grameen Bank in 1974, it has given loans to over seven million people in over seventy three thousand Bengali villages. The bank gives out thirty thousand scholarships and approved thirteen thousand student loans, a number which increases by over seven thousand every year. An offshoot from the bank is Grameen Phone, a company committed to spreading the rise of technology and communication across all of Bangladesh. Companies like Grameen Bank and Grameen Phone are some of what Yunus likes to call social businesses. These social businesses operate much like a traditional business except they make no profit for their investors. That is not to say...
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...Grameen Bank Voluntary Social Systems in action Bangladesh Population: 145 million Capital: Dhaka (11 million) More than half the population is landless After the war, returned to Bangladesh Ph. D. in Economics Vanderbilt Univ Nashville, TN Tried working in the Govt, resigned in two months. Taught at Tenesse State and in Colorado Chairman of Dept of Economics, Chittagong University Dr. Mohammed Yunus Motivation “I felt extremely ashamed of myself being part of a society which could not provide $26 to forty-two able, skilled human beings who were trying to make a living.” Dr. Yunus, testifying before the U. S. Congress Select Committee on Hunger, in a hearing devoted to microcredit Target Customers The Landless No Collateral No Guarantee Customers are never taken to court for default Target Customers The Landless Villagers whose No Collateral families were “functionally No Guarantee landless,” didn’t own enough land to live off for most of the year. Customers are never taken 0.4 acres upper limit. court for default to Ownership Owned by Borrowers (94%) Govt (6%) Money Disbursed $5.25 billion Disbursed $4.64 billion Repaid $425.15 million in 2005 $585 million Projected in 2006 Loan Recovery Rate 99.01% In 1996, Grameen’s repayment rate of 97% was considered comparable to Chase Manhattan’s rate. Borrowers 5.58 million 96% women Rani’s husband: “If the bank...
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...(as of June 2011), Grameenphone is the largestcellular operator in the country. It is a joint venture enterprise between Telenor and Grameen TelecomCorporation, a non-profit sister concern of the internationally acclaimed microfinance organization andcommunity development bank Grameen Bank. Grameenphone was the first company to introduceGSM technology in Bangladesh. It also established the first 24-hour Call Center to support itssubscribers. With the slogan Stay Close, stated goal of Grameenphone is to provide affordabletelephony to the entire population of Bangladesh. From the SWOT analysis we are trying to know thecompany’s strategic position as well as Strengths, Weaknesses, Opportunities, and Threats. 1. STRENGTHSGood Ownership Structure: Grameenphone has the best ownership structure in thetelecommunication industry in Bangladesh. Telenor is one of the largest companies,which is operating in different countries around the world. Again, in Bangladesh,Grameen Bank is one of the largest NGO, which has the sound communication allover the country. It is a joint venture enterprise between Telenor (55.8%), the largesttelecommunications service provider in Norway with mobile phone operations in 12other countries, and Grameen Telecom Corporation (34.2% ), a non-profit sisterconcern of the internationally acclaimed micro-credit pioneer Grameen Bank. Theother 10% shares belong to general retail and institutional investors. Figure-1: Ownership Structure Source: Internet Market...
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...Term paper On Microcredit ECO -242 Principles of Macroeconomics Prepared for Janifar Alam Lecturer School of business Prepared By Group 1 Sec: B Semester: Summer-2013 31th July 2013 To Janifar Alam Lecturer School of business University of Information Technology and Science (UITS) Subject: Submitted the Term paper of ECO-242 Dear Madam It is indeed a great pleasure for us to be able to hand over the result of our hardship of the group Term paper on Microcredit.This report is the result of the knowledge. This has been acquired from the respective course. We tried our level best for preparing this report. The information of this report is mainly based on our knowledge and Internet information. We fervently hope that you will find this plan worth reading. Please feel free for any query or clarification that you would like us explain. Hope you will appreciate our hard work and excuse the minor errors. Thanking you for your cooperation. Sincerely Group 1 Name&ID Signetures Rahat a jan 12310577 Jinia Afrin 12410291 Abdia Sultana 12310290 Jahidul Islam 12310377 Obaidur Rahman 123210572 Acknowledgement First of all we want to give thanks to almighty Allah for giving us the opportunity to complete...
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...------------------------------------------------- Grameen Intel: The Experience of the World’s First IT Social Business ------------------------------------------------- Fahim Kader (132-0947-660) January 7, 2014 Abstract “Of all the countries around the world where we can invest, why should we keeping funds running to Bangladesh?” narrates Kazi I. Huque, CEO of Grameen Intel Social Business Ltd.). He talks about how he has had to convince people over at Intel Corporation, over the years, how despite all the well publicized negativities surrounding the political and (subsequently) business situations in Bangladesh, it would be great investment for Intel to finance the operations of Grameen Intel in Dhaka. Huque, a long term employee of Intel, recalls how during the incorporation of Grameen Intel, he was caught in the middle of contrasting demands and ideas from the rest of the board members that included his own bosses. When he took on the responsibility of spearheading the venture, he knew it would be challenging. The canvas was empty and required lots of thorough planning and strategizing to be crafted into a successful project. “I met with Craig Barrett (former Chairman of Intel Corporation) in his office, and I started complaining.” says Huque. “I said, ‘You’re all making different demands… you need to be on the same page.” Barrett simply replied, “Kazi, we got you onboard to deal with this. It is your job to sort it all out, so don’t ask me for solutions...
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...POWER OF SOCIAL BUSINESS IN POVERTY ALLEVIATION F-532: Business Research Methodology and Econometrics Submitted to, Dr. M. Jahangir Alam Chowdhury Professor, Department of Finance University of Dhaka Submitted by, Md. Rased Mosarraf MBA ID No.: 16-469 BBA ID No.: 16-062 MBA, 16th Batch Department of Finance University of Dhaka “Poverty does not belong in civilized human society. Its proper place is in a museum. That's where it will be.” –Dr. Muhammad Yunus Date of Submission: July 19, 2016 i Letter of Transmittal July 19, 2016 Dr. M. Jahangir Alam Chowdhury Professor, Department of Finance University of Dhaka Subject: Submission of Research Paper. Dear Sir, I am very glad to submit you the paper on “Power of Social Business in Poverty Alleviation”. I would like to say that this paper is helpful for me to know about the social business concept. I am very thankful to you for giving us such a fantastic opportunity to make a paper on this topic. I have tried my best to make this report meaningful by providing necessary information. Yours sincerely, ………………………… (Md. Rased Mosarraf) MBA Roll: 16-469 BBA Roll: 16-062 Department of Finance University of Dhaka ii Table of Contents Introduction ................................................................................................................................................. 1 Literature Review .............................................................
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