520R - Journal #5

Grameen Bank

Before the text we read in the academic reading class, I didn’t know Grameen Bank. That’s why, I did some research on it. I read some articles and searched its website. I am really fascinated by Grammen Bank’s work. Therefore, I want to share it with you.

Muhammad Yunus who is the founder of Grameen Bank was teaching at a university in Bangladesh. When his country became independent, he decided to help to rebuild his county. The situation was very bad in the country, and people were almost dying of hunger. One day, he met a woman who was making bamboo stools. She told him that she was earning two pennies U.S. each day. She also said that she didn’t have enough money to buy bamboos for the stools, so she had to buy them from a trader, and the trader made her to sell the bamboo stools at that price that he wanted. That’s why, the woman could not earn enough money for herself and her family. She needed only 20 cents to buy bamboos. Yunus was shocked when he heard this, and couldn’t believe that people were suffering for 20 cents. Then, he decided to find other people that needed that kind of money. He lend hem the money they needed. There were 42 people, and the total money they needed was 27 dollars. This incident took him to create Grameen Bank.

Grameen Bank is a bank that exceeds banking facilities to the poor. It provides credits to the poor without collateral, and creates opportunities for self-employment. The banking system is based on trust; there are no legal procedures. This bank is targeted more to the woman, because Muhammad Yunus believes that the output is greater if they give loans to women. He thinks that women are more concerned about their family, their children and their situation. All loans have to be paid back weekly, but sometimes it can spread over a year if they can’t pay back. The bank’s mission is to fight poverty. It helps the poor to develop their socio-economic conditions.

Grameen Bank evaluates its member’s socio-economic conditions every year. The bank searches if the families live in a house, if family members drink pure water, if all children in the family go to school, if they have clothes for every day use, warm clothes for winter, if they can eat meals three times a day, and if they can take care of their health. Today, Grameen Bank has 7.6 million borrowers and gives services in 83,000 villages. This year, the bank will give more than half a billion dollars as loans. 65 percent of the borrowers managed to improve their socio-economic conditions. Muhammad Yunus states that poverty is not created by the poor. It is created by the institutions and policies. We have to change the policies and institutions to fight the poverty. Charity is no help for the poor. It only makes poverty to continue. We have to create institutions to help them. As a result, Muhammad Yunus believes that the Grammen type programs can improve the socio-economic conditions of poor. In this way we can fight against poverty. His biggest aim is to create a poverty-free world.

I hope this will come true one day, and the big difference between people's socio-economic conditions will disappear. There are about 1.3 billion people in the world who suffer from extreme poverty,so it is not easy to solve this problem. I am happy that Muhammad Yunus shows everybody that we can break through the wall of poverty, and that the poor can be successful.