Grameen Bank operates on the premise that the poor remain poor not because they do not have the skills or do not work hard, but because the institutions created around them keep them poor. By challenging the conventional belief that the poor are not bankable, Grameen Bank has been able to serve over seven million borrowers since its creation in 1976 by Dr. Muhammad Yunus through many creative programs such as its Housing and Education programs, Village Phone Program, and Pension Fund and Other Savings Program. Dr. Yunus once again challenged common belief in 2003 when he started a new program, the Struggling Members Program (popularly known as the “Beggars Program”), to serve individuals who are currently at the lowest rung of the poverty ladder, proving that microfinance can be adapted and combined with other essential services to help improve the livelihood of individuals struggling with poverty.
Grameen leveraged the basic microfinance model and coupled it with creative solutions to fit the needs of the clients of its Struggling Members Program. First, the nature and size of the loan are different than generic microfinance loans. A typical loan to a beggar member is $9 (collateral and interest free) and the repayment schedule is also more flexible where installments can be paid according to her convenience and earning capability — but not with money she receives from begging. Second, some rules and regulations that apply to the regular members were modified to accommodate these clients, such as eliminating the need to form solidarity groups and the obligation to attend weekly meetings. Grameen goes beyond providing the loans to help their clients achieve a life free from begging. It supports its members by making arrangements with local shops to provide items for them to sell such as bread, candy, and toys and will guarantee payments to these shops in case of defaults. In addition, the bank provides its members with other financial and non-financial products such as insurance schemes and blankets, mosquito nets and umbrellas on credit to be repaid as interest free loans. Although there is no compulsion for the struggling members to give up begging, many do and move on to becoming business people. As of December 2006, the number of people covered by the program total 87,329. Of this number, 6,206 beggars have already given up begging and 3,042 have graduated to become regular members of the Grameen Bank – a truly amazing accomplishment.16 Microfinance: A Platform for Social Change by Marge Magner March 2007 Grameen Foundation
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Grameen Foundation
(Visit Grameen's Website)
Grameen Foundation's mission is to empower
the world's poorest people to lift
themselves out of poverty with dignity
through access to financial services and
to information.
With tiny loans, financial services and
technology, we help the poor, mostly
women, start self-sustaining businesses to
escape poverty. Founded in 1997 by a group
of friends who were inspired by the work
of Grameen Bank in Bangladesh, our global
network of microfinance partners reaches
over 3.6 million families in 25 countries.
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