The Grameen Bank is a specialized recognition institutional model which is develops in Bangladesh at 1983. The Grameen Bank started as a undertaking in a little small town in Bangladesh and it was initiated by Muhammad Yunus, a university professor in economic sciences in 1976 ( Wahid and Hsu 2000 ) . The thought behind the undertaking is to assist the rural society become autonomous and create economic chance, and it besides tries to assist the rural society to acquire out of poorness through entree the little loan which is provided by Grameen Bank. The undertaking was successful and the Grameen Bank was later established in 1983 ( Wahid and Hsu 2000 ) . In November 1999, the Bank had 1143 subdivisions and about 40000 small towns had the chance of utilizing the bank ‘s services ( Wahid and Hsu 2000 ) . The Grameen Bank is an establishment which is different with other specialised recognition establishment. It is the bank which is provides the Micro-credit to the rural society, and those credits are given to hapless people who can non supply collateral and hence can non take loans with other Bankss ( Osmani 1998:69 ) , particularly for the landless adult female. It has illustrates that how the civilization is manifested and perpetuated by many different facets of the administration, such as the construction, policies, process, vision, employment, preparation procedures and etc.
The Grameen Bank Operation Mode
Although, the loan are provide for the hapless people without any collateral, but the trust of the Grameen Bank had conveying them the fantastic repaid rate which is 98.90 per cent. The Grameen Bank had provided a particular credits program which is utilizing the equal force per unit area to guarantee that loans are repaid. The most of import issue is the loan which is supplying by the Grameen Bank is non for single, but it is for the group which is formed by the 5 borrowers. Then loans are given to two people at the clip and the following two members will non have loans until the first two borrowers have repaid their loans ( Wahid and Hsu 2000 ) . The Centre is the chief topographic point where of import organizational activities take topographic point. Several groups run into together hebdomadal, and bank workers besides will go to. All loan proposals are openly discussed, refunds are made, and compulsory economy sedimentations are accepted at the hebdomadal meetings ( Barua 2000 ) . The loans range has set by the Grameen Bank which is from $ 100- $ 300 and the involvement rate for the loan is 20 per cent, which is higher than the normal concern Bankss for 5 per cent. However, the borrowers besides need to take portion in the preparation programme which is larning about how the bank works and its regulations and the 16 determinations. The borrowers besides have to salvage one taka every hebdomad in add-on to 5 per cent of the loan sum, and the nest eggs are accumulated in the group fund. The entire sum is deposited with the Grameen Bank at 8.5 per cent one-year involvement. They can utilize the group financess for ingestion at times of illness or societal ceremonial, and the group member besides can utilize the group fund for the farther investing, when it is agree by whole group members. The loan is involvement free. When the group member are go forthing, they besides can retreat the entire nest eggs, but it is non included the mandatory part of the 5 per cent loan sum. It ‘s sort of group revenue enhancement and it is non-refundable. Those regulations have made the group fund to go a mini-bank and it is grown over the old ages and go the significant resource for the Grameen Bank and its members. The members besides have to pay a fixed charge of taka 5 per 1000 for loans in surplus of one 1000 taka ( Barua 2000 ) . The Grameen Bank had move out the traditional manner and supply the loan which is without the collateral for the rural society. For guaranting that the banking services can be provided without inquiring the collateral, they had replaced the material collateral to societal collateral, and the group which is form by the borrower will move as collateral. Therefore, every bit long as the group exists, the loan will hold the opportunity to be recovered. If those members are fail to pay their episodes to bank, they will confront the considerable force per unit area from their group members, this is because if they fail to pay the episodes, so this will straight impact other group member ‘fortunes ‘ . In the other manus, the failures to pay the episodes will besides impact to the extension of their group Centre. If a member has a echt job in refunding episodes, other members can supply aid. If the full group faces the similar state of affairs, the Centre takes the load ( Barua 2000 ) .
Although, the loans service which is provide by the Grameen Bank is helpful for the rural society to better their life manner, but there are still hold several unfavorable judgments exists in the Grameen Bank loan service. Although the involvement rates which is charged by Grameen Bank are lower than loan sharks, but the involvement rate are still high than other general bank. The loan may assist the rural society to better their life-style, but the highest involvement rate may non afford by the borrowers. This will do the borrowers sold their exclusive assets to pay their episodes. For case, a doctorial pupil in anthropology at 1994 had met several bank members who sold biddies with hatching eggs, or rice and fruit on the strength of future crops, to roll up adequate money to pay their episodes ( Jennifer Pepall, 1998 ) . Another job which is happen in the Grameen Bank loan services is the peer-pressure between the group members. This sort of force per unit areas has non merely go the borrowers ‘ load, it besides had brought the force to the destitute households, and besides have some household which ca n’t afford the episodes are try to borrow the money from the local money-lenders ( paikars ) who would bear down them the highest involvement rates. In the other manus, Grameen Bank had provided the loan to assist the borrowers to enrich their life-style, but it has failed to decide the key factor which is causes the Bangladesh poorness, such as the authorities policies which is supplying the instruction, health care and substructure. And those of the issue have wholly defeats the aim of the Grameen Bank. For my sentiment, to accomplish the end of assisting the rural society to leap out from the poorness, the Grameen Bank should cut down their involvement rate to 15 per cent which is same by the general bank. This method will assist to cut down the force per unit area and load of the borrowers. It besides will assist to avoid the force instance for happen. In the other manus, I suggest that the Grameen Bank should utilize their group fund to better their state instruction, health care and substructure.
Administration Structure of the Grameen Bank
Grameen Bank had created a alone administration construction to supply their loan service, and these administration constructions are extremely decentralised. In their administration construction, the authorization is devolved to the field degree. Grameen Bank separated by four hierarchal constructions, which are branch office as the lowest unit, following by country office, zonary office and the highest is the cardinal office. The subdivision offices have 40 to 60 offices and each office demand to oversee 2 to 10 groups with 5 members in each group. Branch offices arrange their group to accomplish the chief aim of the bank which is provide the loan services without the collateral. Area office is the 3rd degree office of the construction which is comprised by 5 subdivision offices. All the loans which are required by the Grameen members are approved by the country office. The 2nd degree office is the zonary office which is comprised by 5 country offices. At the top Grameen Bank construction is their cardinal office. The caput office seldom interferes in programs devised by the field offices. The field offices are besides encouraged to direct monthly studies straight to the Managing Director summarizing different facets of their work. The Managing Director, with the assistance of other co-workers, reviews these studies and publishes important issues, concerns, and suggestions identified by them in Grameen internal monthly magazine, which reaches all bank functionaries and workers ( Auwal 1996 ) . These methods of communicating provide fora for duologues that seek to authorise Grameen Bank employees as antiphonal, committed, and productive squads ( Barzelay 1992 ) . In the other manus, Grameen Bank dint non make an appropriate policy to command their fund which is using by the Grameen members. The construction of control is basically decentralised, participative, and democratic ; it emerges non from the higher echelon of the administration but from the conjunct actions of members, based on the doctrine, values or corporate vision provided by the top direction ( Auwal 1996 ) . Grameen Bank has been grown around 1000 subdivisions with about 2 million members covering about 35000 small towns for the past 10 old ages. The entire loan sum which was provided by the bank has been extra around TK 41 billion ( ? 370 million ) . For the lodging loan which approved by the bank was around 11 per cent of the entire loan. Grameen Bank ‘s administration construction and their operations were successfully responding to the local demands. On the other manus, Grameen Bank had provided a alone construction scheme which can extinguish the procedure of supervising on their worker, and this construction scheme is utilizing the general public presentation of subdivisions to cipher the wages of directors. As the same clip, the wages of employees are besides depending on the productiveness. Those construction scheme had create a extremely motive for the Grameen Bank employees to assist the poorness society. The credit-group construction developed by the Grameen Bank in Bangladesh has been a popular non-market institutional signifier because of its high refund rates. In visible radiation of its evident success, it has been replicated throughout the universe ( Thomas 1995 ) . The economic sciences literature has by and large sought to explicate the success of the construction by analyzing how was the assorted economic inducements created by it ease the market failures which produce recognition rationing ( e.g. , Varian 1990 ; Stiglitz 1990 ; Besley and Coate 1995 ; and Conlin 1999 ) . The early theoretical analyses seeking to explicate the success of the construction have changed to a more critical analysis of its efficaciousness ( e.g. , Morduch 1999 ; Conning 1999 ) . Concerns are besides being raised that these loan financess do non ensue in any long-run alteration and that they do non work in the context of advanced industrialized states ( Singh and Wysham 1997 ) .
The job which had shown in the administration construction of Grameen Bank is the highest offices of the Grameen Bank are deficiency of administrative to their field officers. The job which is deficiency of administrative for the caput office may make the opportunity for the field officers to misapply the support or authorization. This may convey a batch of job to the Grameen Bank, such as conveying the force to the plans, losing the support and more. For illustration: the staff may misapply their authorization to assist their household members to acquire the high sum of loan, this may allow the people who ca n’t acquire the loan to convey the force into the plans. For my sentiment, I suggest that Grameen Bank should make some regulations or policies to guarantee that the field officers have non misapply their support or authorization. In the other manus, I besides suggest that the caput office should besides promote interfering in programs which is devised by the field offices. This thought may assist the Grameen Bank caput offices to supervision their field officers. It may assist to guarantee that the program which is supplying by the field offices is swimmingly and non misapply the support.
The Grameen Bank is considered by many to hold been a success, and has served as a theoretical account for undertakings in more than 50 other states. For case, it is argued that the Grameen Bank has improved living conditions for 90 % of its borrowers ( Osmani 1998:69 ) . Importantly, the Grameen Bank has been cited as authorising hapless adult females ( Bernasek 2000:369 ) . The ground for the Grameen Bank aiming at adult females is because adult females are assumed to be more dependable and they will pass the money on their household, such as send their kid to school. That is why until today 96 % of the Bankss borrowers are adult females. In Bangladesh, they considered that born in the hapless household is a expletive, if being born hapless as a adult female will be a dual expletive. The ground that all the adult females had lost all their hope and populating their livers fundamentally is because the adult females in Bangladesh is powerless than adult male. Most of them have non employment chance except imploring and working for the richer families as amahs. In this poorness state, the adult females who had widowed or divorced and have dependent kids, they are non hold any support or shelter to back up their life. Most of them are unrecorded in below the line of poorness and they are the first mark on the Grameen Bank loan service. A important facet of the Grameen Bank is that it was initiated by a knowing adult male, and non by the hapless adult females themselves. In fact, it has been noted that adult females at first were really doubting of the Grameen Bank. They did non understand the thought of micro credits or how it would profit them ( Wahid and Hsu 2000 ) . Those jobs had caused the Grameen Bank staff rather hard to convert the adult females to fall in their bank programme and concern activities at ab initio. However, after the Grameen Bank had successfully convert some of adult females to involved and fall in their plans and those of plans had succeeded to altering their life-style, those possible borrowers of the Grameen Bank are started to convert and act upon other adult females to fall in the plans excessively. For convenience the staff to convert the adult females join the plans, Grameen Bank had designed and delivered the plans to the possible borrowers. The staff of the Grameen Bank will fix all the paperwork and travel to the possible borrower ‘s doorsill to convince and explains to the borrower ‘s about the plans benefit and how it operation. All the procedure to fall in the plan will be done by the staff. The lone thing the borrowers are supposed to make is to organize their group with five possible borrowers they like. When the possible borrowers stay at the poorness state of affairs which needs the support and run into the bundle like what the Grameen Bank had provide, they have no ground non to seek the bundle. This is how the Grameen Bank successful to convert the adult females to fall in their plans. This attack would look to be in line with a WID and besides a GAD position. Those experts from the exterior are non conceived of as debatable. It is believed that the expert will do the adult females understand their ain good through duologue and preparation and hence adult females will hold reached their ain decisions. It can besides be noted that the bank ‘s attempts to authorise adult females are based on efficiency statements instead than an apprehension that authorization is good for adult females. In other words poverty relief is more efficient if adult females ‘s state of affairs is taken into consideration ( Bernasek 2003:373 ) .
Another facet, is that the high involvement rate and the societal force per unit area ensuing from group based loans could function to except the poorest groups, who are in most demand of aid ( Wahid, Hsu 2000 ; Turner and Kasynathan 2001:48 ) . This is debatable in relation to authorization of adult females, since it is often argued that adult females typically constitute the poorest group of all societies ( Steans 1998:145 ) . The chief aim of the Grameen Bank to supply this loan is to assist the borrowers to better their support. Those borrowers do non hold to follow with the normal bank regulations. It seems so as if the Grameen Bank really takes some stairss to make the really hapless people. The manner the bank operates besides is designed to run into the demands of their members. For illustration, the bank goes out to the small towns to function the borrowers who can non do it to the bank ( GB4 ) . It is argued that the Grameen Bank takes a wider clasp on poorness relief in that the bank is involved in public assistance undertakings every bit good ( Osmani 1998:70 ) . The bank besides provides eventide schools for their members every bit good as giving advice on household planning ( Osmani 1998:70 ) . Further, the bank has set up a figure of societal ends, referred to as the 16 determinations ( Bernasek 2003:373 ; GB2 ) . Those determinations had driven the members to better their support, such as better their house, better sanitation and direct their kids to school. It can be argued that these ends are partially influenced by a mainstream women’s rightist line of idea, which typically focus on instruction and household planning. As was pointed out earlier, household planning is a complex issue, and seeking to curtail the figure of kids so it might non ever work as to authorise adult females ( Lewis and Mills 2003:11f ; Davis 2003 ) . The nonsubjective and end of the bank is to assist them to leap out the poorness and better the poorness society support. As a consequence, the bank had successful to raised their position and better their support.
Although the Grameen Bank created a success narrative of Bangladesh for widening the loan to assist the poorness adult females walk out the poverty life. However, still got most of the adult females or poorness people do non acquire the loan. In the other manus, the Micro-credits which is supplying by Grameen Bank besides have their defect, such as conveying the force to the borrowers, debt load and more. Rahman is a doctorial pupil in anthropology at 1994. During his survey, Rahman had found that, most of the work forces had encouraged or influenced adult females to fall in the bank loan service and most of the loans that the adult females borrow in Grameen Bank are used by the work forces. In one instance, a adult male threatened to direct his married woman back to her place of birth and remarry unless she took out a loan ( Jennifer Pepall, 1998 ) . When this sort of instance go on like this, the adult females non merely ca n’t acquire any benefit from the loan service, and at the terminal they still need to confront the debt load for the loan. In the other manus, if the group members vetoed their group member loan, so this may besides make the force instance, such as the household member of the requestor may happen and contend with the group member who vetoed the loan that they applied. If a adult female does non acquire a loan or the loan sum is smaller than they expected, this besides may break out the force instance. In Bangladesh, a adult female does non hold any employment chance. Although the loan service is helpful for the adult females to better their support, but the job which is deficiency of the employment chance will do the adult females which is widowed or divorced do non hold adequate ability to afford their episode and those services will go the debt load for the adult females. That high involvement rate besides is one of the loads which will do the adult females holding the force per unit area of the episode. For my sentiment, one suggest that Grameen Bank should analyze the manner of the borrower utilizing the loan. This can assist to avoid that the loan are misuse by the borrowers or avoid the loan are utilizing by other people. In the other manus, I besides suggest that Grameen Bank to take over the loan which is supplying by the group support or make some regulation or policy for it. This may assist to diminish the force instance which is go oning between the group members.
In the decision, I believe that Grameen Bank ‘s Micro-credits plans are plans which can convey a batch of benefit to the state development. The rural socioeconomic and political worlds are the debatable which are rather apparent exist in the Bangladesh. Those jobs like low productiveness, subordination of adult females, unequal entree to public resources and intricate power dealingss between the rich and hapless are the job which is doing the Bangladeshi life in the poorness state. Grameen Bank had successful developed a alone organizational and direction system which is helpful for the poorness state. Although the plans are non perfect and it still have some shortcoming exist in the plans, but I believe that if Grameen Bank continue to specify and extinguish their plans shortcoming and besides seek to better their plans, those plans will go more successful and convey more benefit among us. The success of Grameen ‘s “ counter-culture, ” as laminitis Muhammad Yunus calls it, had successful to turn out the Micro-credits for the poorness borrowers are successful to assist the poorness society to better their support and besides turn out that the borrowers will take duty for refunding loans that given by right civilization conditions.