Transcript The Grameen Bank

Bringing Sustainability to Bangladesh’s Fight Against
Poverty
Agenda
 Poverty in Bangladesh
 Functions and Sustainability
of the Grameen Bank
 Criticisms and Looking
towards the Future
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Causes of Poverty in Bangladesh
 Natural disasters
 Cyclone caused $291 million in damages
to rice crop in 2007
 Government
 Strikes caused $70 million in
losses per day for garment industry
in 2006
 Lack of infrastructure
 Inefficient village loan system
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Grameen Bank and Bangladesh
 Is there something about Bangladesh that helps make Grameen
successful? Yes.
90% of
Bangladeshis
practice Islam
(mostly Sunni
sect).
Sunni Islam
places high
importance on
community.
Grameen is
able to achieve
high
repayment
rates.
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Pioneering Microfinance
• Primarily Women
•
Groups of Five
•
Weekly Payments
•
Lower Poor
•
High Commitment to Training
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Changing the View of
Lending to the Poor
 The Poor Can Find Profitable Jobs!
 The Poor Can Repay!
 The Poor Can Save!
 Banks that Lend to the Poor Can
Survive and Grow!
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Why the Grameen Bank?
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Food for Thought
1. High interest rates
• Profitability and subsidizing of beggar loans
• The debt trap
• How can the bank reduce rates?
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Food for Thought
2. Scaling up
• Historical dependence on grants and cheap loans
• Self-sustainability only achieved in 1995 after three decades
• Future expansion
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Grameen Bank:
A Final Cure?
 Microfinance alone cannot solve poverty
 Corrupt Government
 Weak Banking
 Corrupt customs officials
 Cheating on Exams
Poverty in Bangladesh | Functions and Sustainability | Looking to the Future
Grameen Can Help
 Grameen and/or the government has to help the poor
develop disaster mitigation strategies
 Partner with healthcare, infrastructure or education
NGOs
 Bangladesh Development Partnership Center
 Bangladesh Academy for Rural Development
 Support non-corrupt political candidates