Programmes/Activities of Grameen Bank in Poverty Alleviation

Programmes/Activities of Grameen Bank in Poverty Alleviation

Programmes/Activities of Grameen Bank
1.  Service at the Door Steps of the poor
Instead of the poor coming to the bank Grameen Bank carries its services to the comfort zones of their door steps. It explains why the Bank’s members consist largely of women who normally shy away from the glare of a conventional banks with branches located away from where the poor live. All banking transactions except loan disbursements are done in the meetings of the borrowers at the village level centres organized by the Bank’s centre manager.
2.  Housing for the poor
A shelter over the head, food and clothing are the three most important needs of the mankind. Realizing the importance the shelter, GB introduced housing loan programme in 1984 to enable its borrowers to build a modest shelter over their heads. The ownership of a house infuses people with a sense of pride, security and self-respect that, in turn, provides a stepping stone to achieve economic prosperity and improved social status. The ceiling for a housing loan is BDT 25,000 for construction of a simple tinroof house. The average size of the loan is BDT 13,065 (USD 169) per borrower. The interest rate is 8 per cent per annum, repayable over a period of five years. During 2015, housing loans amounting to BDT 5.59 million (USD 0.07 million) were provided to build 363 houses. It brings the total number of houses built with the housing loans to 697,152 since inception.
3.  Scholarships for the children of Grameen members
 Grameen Bank offers scholarships to the children of Grameen members to ease their financial constraints for payment of school dues, purchase of books and stationery. At least 50% of the scholarship money must go to the girls and the remaining 50% to both boys and girls based on overall performance. About 26,000 children, at various levels of school education, were awarded the scholarships during the year under review. It brings the aggregate number students since the inception of the programme to 266,805 up to December, 2015, involving an amount of BDT 445.28 million (USD 5.65 million).



4.  Higher Education Loans
Grameen Bank did not want to leave children of the members at the lurch after finishing the school level study. So it introduced the Higher Education Loan programme in 1997 to open opportunities for talented children of its borrowers to pursue higher education in medicine, engineering, agriculture and other higher education programmes at the graduate (with honours) and postgraduate levels. The loans are intended to cover all expenses incurred by the students from the beginning to the end of the study period. The loans cover admission fees, course fees, cost of stationery, food and accommodation and other related expenses. By the end of the year under review 53,357 students pursuing courses in disciplines were provided loans under this programme.
5.   Nursing Education loans for the female children of Grameen Bank borrowers
To assist the children of Grameen Bank borrowers to secure jobs at home and abroad it lends money for study in a 3-year Diploma in Nursing and Midwifery course in the international standard Grameen Caledonian College of Nursing. 294 students have enrolled for this course. 175 students have already successfully completed the course. Of them 114 have secured jobs in different hospitals and clinics, 6 have gone for higher training in Glasgow Caledonian University, Scotland while 31 students have enrolled in B.Sc. level courses in nursing in Bangladesh.
6.   Micro-enterprise Loans                   
Grameen Bank has steered many poor to cross over the poverty line. The Bank continues to stand by them to help them reach even higher echelons of prosperity. The Bank provides larger loans, called micro-enterprise loans, to these fast moving members. There is no restriction on the loan size. So far 7,221,574 members availed of the micro-enterprise loans. A total of BDT 249.59 billion (USD 3,363.11 million) has been disbursed under this category of loans. Average loan size is BDT 34,563 (USD 439). The maximum size of a single loan taken so far is BDT 4.0 million (USD 51,606) for fish feed, poultry feed, fish cultivation and fish business. The other major categories of activities financed are grocery shops, pharmacy, dairy farms, auto-rickshaw for transportation and stone business for construction. This programme has initiated a silent revolution in rural Bangladesh by encouraging leadership and entrepreneurial qualities and self-employment opportunities.
7.  Village Phones
Grameen Bank provided loans to 1,630,351 borrowers up to 2015 to buy mobile phones and offer telecommunication services in nearly half of the villages of Bangladesh .It is also generating revenue for GrameenPhone, the largest telephone company in the country. Village phones use 2.22 per cent of the air-time of the company, while their number is only 1.89 per cent of the total of telephone subscribers of the company




8.  Beggars as Members
Beggars are the hardest to reach under the conventional poverty alleviation programme. To capture this elusive group Grameen Bank contrived Grameen Bank Annual report 2015 page 1 0 an innovating scheme in 2002 called Struggling Members Programme. Over 109,000 beggars have joined the programme. Total amount disbursed stands today at BDT 176.14 million. Of this amount of BDT 149.20 million (85% of the amount disbursed) has already been repaid. GB is happy to note that 16,905 beggars have left begging and are making a living as door-to-door sales persons. Among them, 9,029 beggars have joined Grameen Bank groups as mainstream borrowers.
9.  The Grameen Generalized Syste
This system was introduced in 2000 to overcome the financial constraints of the borrowers to tide over the bad days that seriously impair their capacity to repay their bank loans. The system is simple and customer friendly that provides a leeway to the member to remain in the Bank’s mainstream rather than opting out of Bank. The Grameen has four important windows for lending money--basic loan, housing loan, higher education loan and struggling members (beggars) loan programme. A basic loan is converted into a flexible loan or reschedule loan, if the borrower finds it difficult to pay the weekly installments. Flexible loan reduces the installment size to a tolerable level. At the end of 2015, nearly 7 per cent of the borrowers were on flexible loans. Flexible loan is not an independent loan. It is only a temporary detour from the basic loan. The borrower tries his or her best to go back to the basic loan. If a borrower fails to repay the basic loan and is unwilling to go into flexible loan, s/he is reckoned as a defaulter. In that event, 100 per cent provision is made against his/ her outstanding dues. If a Flexible loan is not paid back in two years it is considered as overdue; after three years, it is entirely written off. The rate of recovery of Basic Loan is close to one hundred per cent.

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