The Grameen Bank: The Millennium Village's Case Study

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Register to read the introduction… In an article written by Dr. Yunus he begins with the story of a women Amena Begum who joined the Grameen Bank center in 1993 and took out a 60$ loan in an effort to start a business raising chickens and ducks, once she paid that loan back she applied for a loan of 110$. After 6 years Amena’s business continued to grow and allowed her to provide for her family. (Yunus, 1999) The Grameen bank allows people with no means of making money to take out small loans without collateral. People are required to join the bank in groups of 5 and are allowed to help one another out in paying back loans. If one person fails to pay back alone the other group member’s credit is reduced. As of 1999 39,000 Bangladeshian villages use the Grameen Bank and it lends to 2.4 million people, 94 percent of the borrowers are women (Yunus, 1999). Concerns about loans not being paid back have been put to rest as 99% of loans are paid back. This solution has made over 5 billion dollars in profit since its start (Hockfield, 2008) and became economically self-sufficient since 1995 (Yunus, 1999). The Grameen Bank idea is superior to the Millennium Villages Project because it is a simpler concept, has a longer history of success, and helps people support their family without the annual fee of the Millennium Village’s …show more content…
When Yunus was trying to start the bank he faced issues with the universities bank as the manager said that the bank could not give loans to the needy: the villagers, he argued, were not creditworthy (Yunus, 1999). This could be a challenge that founding Grameen bankers may face in other African countries. The only reason the bank began was because Yunus himself created the bank without help from any other banks. Unless someone was willing to go through this process the Grameen bank may have a hard time getting off the ground. Another challenge that the Grameen bank may face is the possibility that people may not pay back there loans. Although the repayment rate in Bangladesh has been 99% it does not mean it would be like that everywhere else. The rule of having people joining the banks as groups of 5, with each person’s actions affecting the other member’s, increases the likelihood of loan repayment. As well the 16 resolutions each member must memorize helps ensure that the loans are going to things that will help them make money and allow them to repay the loan. The final challenge that the Grameen Bank could face is the potential for theft. In these poor countries, so of which are war ravaged, there is not much stopping a group of rebels from entering the bank and stealing all the money

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