Grameen bank

If you take a flower
You have to give
A heart like flower.
Give flowers in return
They give false flowers.
How will you carry such a flower?
A flower cannot carry another flower.
     Jasim Uddin


  • 2. Conventional bank do not lend to the poor
  • 3. Credit for the ultra-poor
  • 4. Extension and Interaction with Officials
  • 5. Improvements in Well-Being
  • 6. Household Decision-Making
  • 7. Samman/Dignity
  • 8. The Market
  • 9. Savings
  • 10. Village phone programme
  • 11. Pension fund and other savings
  • 12. Self-reliance for GB
  • 13. High Cost of Microcredit
  • 14. The Struggle for Survival and Credibility among the     Religious NGOs (Non-Governmental Organizations) in Bangladesh
  • Grameen's Success - Rabinranath Tagore knew 100 years ago

    The success of Grameen project is entirely due to the responsiblity and participatation by the women. Rabinranath Tagore knew this.

    In traditional rural society women's place considered to be high and respectful., as woman is made mother by Nature. Rabinranath Tagore, the Noble Prize laureate, wrote on 18th August 1893, Potisar (Padma, downstream of the Ganges), also Rabinranath Tagore named the boat "Padma", Bangladesh:

    For some time I have been remarking that man is angular and incoherent, women rounded and complete. Woman's way of speaking, dressing, moving and behaving is an integral harmony with her duties in life. And the main reason is that for ages Nature has defined these duties and modified these duties and moulded her feelings to fit to them. . In all her being and doing she unites grace and skill, her nature and her work, like a flower and its scent. She acts without conflict or hesitation."

    Man's character, by contrast, is uneven, formed by the various occupations and influences that have left their mark upon him both inwardly and ouwardly. ......

    Woman was made mother by Nature and cast in that mould. but man has no such primal design, no star perpetually to gude him
    (Rabinranath Tagore, Glimpses of Bangal, His letters to his niece Indira Devi)

       potisar river, padma

  • Rabindranath Tagore – The Poet And The Man An Analytical Perspective
  • Glimpses of Bengal


    In Bangladesh, the unintended consequences of the microcredit system with NGOs as partners have been far-reaching. The very structure of social production that focused on 'man as the breadwinner' has changed to accommodate a substantial and permanent role for women as income-earners.

    'The Grameen Bank' project, an invention of a simple method by a man from the world's poorest country has become a model for so many developed and developing countries of Asia, Europe, America and Africa for changing the fate of their underprivileged people. First Tagore, then Amartya Sen and finally our very own Dr. Yunus. This is the type of news that can make a Bangladeshi proud.

    The IFAD-government of Bangladesh, Agricultural Development and Intensification Project (ADIP) covers four districts: Gazipur, Tangail, Kishoreganj and Narsinghdi. This study of 20 saving and credit groups (SCGs) formed under the ADIP project in these four districts of Bangladesh was undertaken to assess the impact of microcredit institutions on gender relations and women’s agency. During our fieldwork (from March 17 to 31, 2003), we looked at the process through which microcredit has enabled the transformation of a part of women’s domestic labour into an income generating activity. We looked at the sectors of economic activity in which this credit is invested and the productive assets acquired by the members of the SCGs.

    prof. yunusGrameen Bank was initiated in 1976 by Professor Muhammad Yunus as an action research project of Chittagong University. In a village near the university called Jobra, he found that the poor did not have access to small amounts of capital to engage or build on their tiny livelihood activities. The only source of capital were loans from money- lenders at exorbitant rates of interest. As an experiment, he began a project to provide small loans to poor women in Jobra to engage in income generating activities. In all cases, the poor women took loans from the project, invested their money, and generated enough income to pay back their loans and keep a profit.

    The word "microcredit" did not exist before the seventies. Now it has become a buzz-word among the development practitioners. In the process, the word has been imputed to mean everything to everybody. No one now gets shocked if somebody uses the term "microcredit" to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from the savings and loan associations, or from credit unions, or from money lenders. When someone claims microcredit has a thousand year history, or a hundred year history, nobody finds it as an exciting piece of historical information.

    poverty alevation by graThe Grameen Bank operates on the premise that the poor remain poor, not because they do not work or do not have skills, but because the institutions created around them keep them poor. Charity is not a solution to poverty, but rather fosters dependency, thus perpetuating poverty. All human beings are born with unlimited potential, and merely require an opportunity to unleash that potential. Professor Yunus argues that credit provides that opportunity and should therefore be considered a human right.

    The success of this approach shows that a number of objections to lending to the poor can be overcome if careful supervision and management are provided. ‘For example, it had earlier been thought that the poor would not be able to find remunerative occupations. In fact, Grameen borrowers have successfully done so. It was thought that the poor would not be able to repay. But in reality, the repayment rates reached were 97 per cent. It was thought that poor rural women in particular were not bankable. The numbers say otherwise, they account for 97 per cent of borrowers today. Indeed, from fewer than 15,000 borrowers in 1980, the membership had grown to nearly 100,000 by mid-1984. Group savings have reached 7,853 million taka, out of which 7,300 million taka are saved by women.

    Many people mistakenly consider Yunus as the pioneer of micro-credit in Bangladesh. When Rabindranah Tagore established a bank for the peasants at Potisor in Pabna, he did not coined the term micro-credit. The poet-turned-philanthropist made a huge amount of grant to help poor farmers. He failed to recover the loan, not even 20 per cent. We know about Kabuliwala (Afgani)was who generously gave collateral-free loan to anybody. NGOs later institutionalised it. BRAC was the first NGO that advanced collateral-free micro-credit in its Sulla Project on an experimental basis in 1974 as a package for post-flood rehabilitation. It has become a regular programme of BRAC since 1976 with 12 per cent rate of interest per year.

    The government in 1983 established the Grameen Bank (GB) as a non-profit organisation to implement a group-based credit programme for productive self-employment, though it started as an action-research project in 1976. However, it was Yunus who preached credit as a right of the poor. He considers credit as a human right. His hypothesis has been: the poor are bankable.

    Myth of recovery

    The micro-credit programme provides easy access to credit for the poor, as it is collateral free. It also extends awareness service, development education and training on various social and vocational aspects to the beneficiaries for effective utilisation of the credit. Efforts are made to make the poor creditworthy. In spite of these efforts, many borrowers default and ultimately drop out.

    When the default rate is very high and the repayment rate declines to an alarming level, it threatens the survival of the institution. Performance of some NGOs has been poor and some of them had to abandon the programme. For some NGOs, the default rate was more than 90 per cent. Low repayment rate has its demonstration effect on others, which often spreads a default culture.

    Increased amount of credit is sometimes a problem. A survey conducted by ASA shows that competition of NGOs involved in micro-credit programme in the same area often creates an unhealthy situation and influences in creating default. Organisations like BRAC, Grameen Bank and Proshika provide large amounts of credit to their clients. In an environment of poor infrastructure and hostile attitude of the bureaucracy, the poor people do not have the capability to utilise a large amount through investment as capital. When the loan amount is beyond the capacity, they cannot generate desired income.

    GB and some national NGOs have been able to keep their recovery rate high. But there is scepticism about their claim. In the backdrop of low rate of return on labour, high degree of uncertainty and natural disasters, a high rate of repayment to the tune of 99-100 per cent on a regular basis seems to be a miracle. What makes such a high rate possible? The following have been observed in this respect.

  • Many borrowers have access to multiple sources of credit.
  • Borrowers are assured of repeat loans. Defaulters’ loan is adjusted with fresh loan and shown as ‘recovered’. Staffs are at a race to show their performance.
  • Borrowers have multiple sources of income.
  • Borrowers have to sell assets to clear themselves when in trouble.
  • Borrowers are intimidated to repay loan.
  • NGOs incur high staff cost to keep vigilance.

    Yunus makes nation proud Shares Nobel Peace Prize with his Grameen Bank

    After independence in 1971 and restoring democracy in ’91, Bangladesh witnessed the biggest achievement as Professor Muhammad Yunus and his Grameen Bank were declared yesterday to win the Nobel Peace Prize 2006 for pioneering the use of micro-credit to benefit poor entrepreneurs. Prof Yunus is the first Bangladeshi and also the third Bangalee after poet Rabindranath Tagore and economist Amartya Sen to win the Nobel Prize. Grameen Bank, founded by Prof Yunus, has been instrumental by offering loans to millions of poor Bangladeshis, many of them women, without any financial security, in improving their standard of living by starting businesses with the tiny borrowed sums

    "Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means," said Ole Danbolt Mjøs, chairman of the Norwegian Nobel Committee. "Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries." Prof Yunus and Grameen Bank were chosen for the prestigious award from among 191 candidates, including 168 individuals and 23 organisations.

    Yunus, dubbed "Banker to the Poor", began fighting poverty during a 1974 famine in Bangladesh with a loan of $27 out of his pocket to help 42 women buy weaving tools to save them from the clutches of the moneylenders. "They got the weaving tools quickly, they started to weave quickly and they repaid him quickly," said Mjøs. "Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development," the Nobel Committee said in its citation.

    Today the bank claims to have 6.6 million borrowers, 97 per cent of them women, and provides services in more than 70,000 villages in Bangladesh. Its model of micro-financing has inspired similar efforts around the world. "Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions," the Nobel Committee noted.

    Prof Yunus and the bank will share in the $1.4 million prize as well as a gold medal and diploma (The Daily Star, October 14, 2006).

    Nobel Laureate Professor Muhammad Yunus termed the accolade a great pride for the country and said it will encourage him further to dedicate himself for improving the lives of the poor. Soon after hearing the news of getting the Nobel Peace Prize, professor Yunus said a world free from poverty is his dream and he will work to make Bangladesh as a poverty-free nation.

    The entire nation went euphoric as soon as international media reported on Friday afternoon that Professor Muhammad Yunus had won this year’s Nobel peace prize. The proud nation greeted him for his being the first-ever Bangladeshi to win a Nobel prize as well as for his accomplishment and that of his famed Grameen Bank. People from all walks of life—from the head of state to the homeless, from learners to professionals—greeted the news with joy.

    Helen Todd spent a year in two villages in Bangladesh following the lives of women who have been borrowing from the Grameen Bank for a decade. She focuses on the day-to-day processes of how they generate money from their tiny loans, what they do with the resulting income, and how much control they retain over it. In stark contrast with nonmembers, most Grameen women emerge from this study as strong individuals, successfully battling for positions of power in their families and for respect in their villages. Moreover, the Grameen women's gains have been sustainable, since most of them have invested in access to land. Through the vivid stories of individual women, Todd paints a picture of women empowering themselves with the crucial ingredient of continued access to credit over the course of a decade (Dhaka Courier, 17 November, 2006).

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    2. Conventional bank do not lend to the poor

    Bangladesh, experts and others say, is less poor than we think. Yet few are convinced, and nobody tells us who can make us smile. Once the state could control prices to some degree, but in this laissez-faire world of non-accountability the free market becomes an excuse for not keeping misery under control. If nobody can keep the prices down, of what use is the state, anyway. Might as well hand the state over to the "syndicate" or an NGO or whoever, some might say.

    In Bangladesh the poor brown trash are impossibly hungry. At least 25 percent of the people are half-fed, often unfed. Between 1972 and 2006, we have been able to manufacture a new category of wretched people, the extreme poor. These people own endless mouths which chew on nothing because their jaws find no food. Economic abstraction makes good fodder for seminars, but it doesn't make that much sense where the hunger grows. These people are the colour-coded poor. They carry cards to identify their status of extreme poverty. These cards, one hopes, will give them access to the facilities of the state. It's a plea, not a demand. In their world, rights have limited meaning. The system is built on occasional morsels of mercy from the state. There is a feeling that it might be best to keep a distance from the powerful. Nobody is quite sure about the grammar the state uses to talk to the poor.

    "The poor are so poor that we can get nothing from them. They have nothing to be robbed of. If their lives improve, the criminals will go after them and that will make our lives insecure. Should we work to help them?" This is the grammar of a society's language, where impoverishment has become a protection from criminals, a collective security blanket of sorts. The poor have finally become too poor to cause any worry (Afsan Chowdhury, November 2006).

    What actually are the characteristics of these "Poor People"? Basically they are that part of the society who are relatively most deprived from income, wealth, education, social security and political power. They are the defeated victims of an unequal competition in an intrinsically unequal society. In Bangladesh there is going on a continuous process of unequal and unjust competition through which a greater section of the middle class is slowly becoming the member of a lower middle class and after a brief period of life and death struggle to hold on they also ultimately in most cases slide down to swell the ranks of the poor. Now days in the literature you will find another category: "Poor Becoming Extreme Poor!"

    Conventional banks, however, do not lend to the poor. Banks require collateral and have complicated procedures that the poor cannot satisfy. The poor are therefore exploited by money-lenders and traders who operate a system of usury in villages which is equivalent to bonded labour and slavery. In another difference with normal banks, ‘Grameen Bank branches are located in rural areas, whereas the branches of conventional banks usually locate themselves as close as possible to the business districts and urban centres. In perhaps the biggest difference, the first principle of Grameen banking is that clients should not go to the bank, it is the bank that should go to the people.

    General features of Grameencredit are :

  • a) It promotes credit as a human right.
  • b) Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women.
  • c) Most distinctive feature of Grameencredit is that it is not based on any collateral, or legally enforceable contracts. It is based on "trust", not on legal procedures and system.
  • d) It is offered for creating self-employment for income-generating activities and housing for the poor, as opposed to consumption.
  • e) It was initiated as a challenge to the conventional banking which rejected the poor by classifying them to be "not creditworthy". As a result it rejected the basic methodology of the conventional banking and created its own methodology.
  • f) It provides service at the door-step of the poor based on the principle that the people should not go to the bank, bank should go to the people.
  • g) In order to obtain loans a borrower must join a group of borrowers.
  • h) Loans can be received in a continuous sequence. New loan becomes available to a borrower if her previous loan is repaid.
  • i) All loans are to be paid back in instalments (weekly, or bi-weekly).
  • j) Simultaneously more than one loan can be received by a borrower.
  • k) It comes with both obligatory and voluntary savings programmes for the borrowers.
  • A member is considered to have moved out of poverty if her family fulfills the following criteria:

      1. The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor.
      2. Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters.
      3. All children in the family over six years of age are all going to school or finished primary school.
      4. Minimum weekly loan installment of the borrower is Tk. 200 or more.
      5. Family uses sanitary latrine.
      6. Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.
      7. Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money.
      8. The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts.
      9. Family experiences no difficulty in having three square meals a day throughout the year, i. e. no member of the family goes hungry any time of the year.
      10. Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare.

    Grameen Bank has been effective because it has been designed to be supportive of the needs of the poor. Grameen Bank does not require its members to be literate and its rules are simple. Each loan is disbursed without collateral with a collection of principal, interest and savings on a weekly basis, to make payments easy and manageable. A group mechanism ensures that each member is part of a system of peer support. Centre meetings take place at which members gather at their own doorstep to repay their loans and discuss their projects. The meetings help create an inter-linking network for the members and ensure an accountable and transparent system.

    When the whole country is going on a shopping frenzy (eid festival), models in flashy designer clothes adorning pages of different magazines and newspapers trying to coax customers into buying the latest Hindi-film inspired kameez or sari, there exist in this city hundreds and thousands of children, lost and abandoned, who have to struggle day and night to make ends meet. This is a story of sheer exploitation and utter indifference; a story where mothers are forced to sell their newborns for the price of a two-litre mineral water bottle; a story where children start working as young as five to grow up stunted and malnourished.

    Field after field run along
    Green winds sway tender paddy shoots
    That spreads like open hair
    In it butterflies ornamented with wings…
    Mother earth smiles at her fertile pride.
    In this harvest Asmanis (landless people) have no claim.
    As worn out ribs hold together their stomachs
    They burn with hunger.

    Forest after forest run along
    This fairyland of flowers and fruits….

    In this forest Asmanis (landless people) have no claim.
    They are hungry.

    River after river run along
    They flow through nameless wharfs…
    In this river the Asmanis (landless people) have no claim.
    Worn out ribs hold together their stomachs
    They are empty.
    Jasim Uddin

    1. BANGLADESH: A Million Mutinies Now
    2. Natural Indigo (Indigoferra tinctoria) and the unfinished Fight for Freedom
    3. A near-famine situation the northern districts - Story of Rafique and Others
    4.On the democratic emancipation of women


    The sixteen decisions

  • While providing small loans to the poor is an economic intervention,
  • a Grameen Bank loan begins a process of deep transformation in the lives of its members.
  • The poor women work hard to bring a host of positive changes in their lives as their economic condition improves.
  • The aspirations of the members became incorporated into Grameen Bank's Sixteen Decisions:
  • a social charter which the members themselves developed,
  • encompassing issue such as keeping family size small,
  • sending children to school, eating green vegetables, drinking clean water, and
  • keeping the environment clean.

    schoolToday, all the children of Grameen Bank members are in school. Studies show that Grameen Bank members have lower birth rate than non-members. Their housing is better and the use of sanitary latrines is higher than non-members. Their participation in social and political activities is higher than that of non-members, and reflects how seriously the members implement these decisions.

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    3. Credit for the ultra-poor

    82 percent of the people live on less than $2 a day - Inefficient and ineffective government and incongruent external influence .

    To explode the myth that micro-credit is not useful for the poorest of the poor, Grameen Bank began in 2004 a programme to give loans exclusively to beggars. When GB invites beggars to join the program, it does not discourage them from begging, instead the bank offers them the option of carrying popular consumer items, financed by Grameen Bank, when they go out from house to house. They may choose to beg or sell the items at their convenience. If they find that their selling activity picks up, they may quit begging and focus on selling. Till October of this year, 52,000 beggars had joined the programme. Typical loan to a beggar is about $10, with no fixed terms of repayment.

    Out of 261 women SCG members present in various group discussions, it was possible to collect accurate information on the use of loans for 201 women. The percentages in Table 1 add up to more than 100, since loans are used by individuals for a number of purposes at the same time. Along with that, numerous sources of funds are put together for, say buying land or other assets, and even for investment in various enterprises.

    Use of Loan by 201 Women SCG Members

    Number Percentage
    Agriculture 77 38
    Poultry 54 27
    Large livestocks 54 27
    Grocery shops 10 5
    Vegetable selling 25 13
    other small business 14 7
    Transport/firewood/powerloom 9 4
    Homestead 10 5
    Housing improvement 20 10
    Total respondents Total respondents

    What stands out from Tables 1 is the predominance of agriculture and related activities in the areas of livelihood investment – crops, poultry, livestock and vegetables. Non-agriculture based activities, which include small business, like tailoring shops, and the clearly men-operated sectors of transport, firewood and powerloom, all together account for just 15 per cent of loan uses; adding the 14 per cent in small business, that gives a total of 29 per cent loans used by men. The possibly more accurate projectwide figures on main use of loans account for 35 per cent of loan uses in men’s activities, if we take all non-agriculture related activities as being men’s activities.

    Women operate largely in the farm sector, and men much more in the non-farm sector. Women and men may work together to prepare the land, but all post-harvest tasks are carried out by women [Chen 1985, Mallorie 2003]. Vegetable production, as also raising poultry and livestock, have traditionally been women’s activities. Women report that in general they have better control over the income from these activities.

    There are a few instances of jointly run enterprises. In one case the poultry business was run jointly by a woman and her husband. Grocery shops tend to be run by men, but there are several cases where the shop was close to the house, or in the village and the women then fully shared the work of running the shop. There are some outstanding cases of women who, through the loans have become owners of small businesses and run them as owners and managers.

    Transforming Domestic into Commercial Activity

    Where women themselves use the loans, they are invested in a number of income generating activities – rearing poultry, goats and cows, homestead vegetable and fruit gardening, pond fish culture, etc. At one level this is a continuation of activities that women were already carrying out. The earlier activities, however, were carried out on a smaller scale, and that too for household self-consumption. With credit provision there is the new requirement of repayment, which requires that activities earn cash. This leads to the transformation of the nature of the activity, even if the type of labour does not change. Thus, what was in scale a petty and domestic activity for household self-consumption is upgraded in scale and changed in nature into a commercial activity for sale.

    The critical difference that microcredit to women has made in patriarchal Bangladesh is that it enabled women themselves to be the agents of the transformation of a domestic activity for household consumption into a commercial activity for sale. While the location or site of this labour may not have changed and remained within the homestead, the nature of the productive activity changed from being private production for household-consumption to commercial activity for sale. Since this transformation was carried out through the medium of women’s own loans, women thereby remained not just the labourers, but were also identified as the agents of this transformation.

    Before the microcredit system took root, all of women’s labour remained within the definition of domestic work, work done for the care and service of the household. Within this there was no distinction between so-called productive and domestic/unproductive tasks. All tasks undertaken by women were uniformly regarded as being within the realm of domestic labour. But when the product of this labour became a commodity and the result of it a cash income, and when this transformation was carried out by credit taken by women, the very nature of this part of women’s labour in the household was transformed. It acquired social recognition and, importantly, women’s own self-recognition as income earners.

    We noted several instances of women members who used credit to buy cows, poultry birds, trees, shops and agricultural lands in their own names, and not in the name of the husband or son. In one case nine women and in another case 10 women jointly leased a piece of agricultural land for vegetable and crop production. They work jointly on such lands and equally share the produce and cash earned through sale in the local markets.

    “… the family realises that she is the source of this income. This increases her status and bargaining in the household … Some of the women in the study perceived a decrease in physical violence against them around the time of credit group meetings. One women said that her family was worried that she might retaliate by refusing to get another loan. n other words, even in being the conduit for credit, women increase their influence in the household. This increased influence of women who bring credit into the household have, is expressed in a number of ways. “Now that I give him money, he loves me more.” Or, “He listens to me more in deciding how to spend household money.” Or, “We have been talking to you for two hours. This would never have happened if we had not given money to our husbands. They would not have allowed us to sit in a meeting for this long,” said Maiful, (Mirzapur,Tangail).

    How does the micro-credit system work?

    A bank branch is set up with a branch manager and a number of center managers and covers an area of about 15 to 22 villages. The manager and the workers start by visiting villages to familiarise themselves with the local milieu in which they will be operating and identify the prospective clientele, as well as explain the purpose, the functions, and the mode of operation of the bank to the local population,’ explains Mohammed Shahjahan, general manager of commerce, monitoring and evaluation at GB.

    Groups of five prospective borrowers are formed in the first stage and only two of them are eligible for, and receive a loan. The group is observed for a month to see if the members are conforming to the rules of the bank. Only if the first two borrowers begin to repay the principal plus interest over a period of six weeks, do the other members of the group become eligible themselves for a loan. ‘Because of these restrictions, there is substantial group pressure to keep individual records clear. In this sense, the collective responsibility of the group serves as the collateral on the loan. The Grameen Bank is based on the voluntary formation of small groups of five people to provide mutual, morally binding group guarantees in lieu of the collateral required by conventional banks.

    Loans are small, but sufficient to finance the micro-enterprises undertaken by borrowers: rice husking, machine repairing, purchase of rickshaws, buying of milk cows, goats, cloth, pottery etc. The interest rate on all loans is 16 per cent. Although mobilisation of savings is also being pursued alongside the lending activities of the Grameen Bank, most of the latter’s loanable funds are increasingly obtained on commercial terms from the central bank, other financial institutions, the money market, and from bilateral and multilateral aid organisations.

    ‘Intensive discipline, supervision, and servicing characterize the operations of the Grameen Bank, which are carried out by “Bicycle bankers” in branch units with considerable delegated authority,’ he adds. The rigorous selection of borrowers and their projects by these bank workers, the powerful peer pressure exerted on these individuals by the groups, and the repayment scheme based on 50 weekly installments, contribute to operational viability to the rural banking system designed for the poor. Savings have also been encouraged. Under the scheme, there is provision for 5 percent of loans to be credited to a group find and Tk 5 (70 Tk= 1 US Dollar$) is credited every week to the fund.

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    4. Extension and Interaction with Officials

    Dealing with NGO and project officials is something to be expected when women become members of the grameen bank. But what is of interest is to note that other officials, like agricultural extension officers, also contact these women, which means that they recognise the role of these women in actually carrying out and managing certain types of agricultural production. It is no longer the male “head of the household” who is supposed to be the recipient of extension messages. The women were proud that they were being contacted by officials and various technical matters were discussed with them, and not with their husbands. “Now the block supervisor comes to meet us, not our husbands,” (Narsinghdi). In Kaliganj, Gazipur, it was pointed out because of women’s involvement in both the ownership of land and in field labour, extension officers now visit and discuss technical issues with the women. This is in sharp contrast to the experience of the early 1990s, when, for instance, in IFAD’s Agricultural Diversification Project (MSFDCIP) in Kurigram, extension effort was confined to men.

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    Improvements in Well-Being

    The fishes find the deep sea,
    The birds the branches of the tree.
    The Mother knows her love for her son
    By the sharp pain in her heart alone
    Many diverse the colour of cows,
    But white the colour that all milk shows,
    Through all the world, a Mother's name -
    A mother's song is found the same

    Jasim Uddin, The field of the Embroidered Quilt
    Translated by E. M. Milford

    emb. quilt by suraye

    An increase in consumption is to be expected with an increase in income. Along with a quantity increase there is also a quality increase in food consumption. Almost invariably women said that while they earlier had a little vegetable and not much more with each meal, now they consume more vegetables, and also eggs and fish once a week each, dal twice a week, and chicken or beef, once a month, (Bhuapur and Raipura, Narsinghdi). In another SCG, it was said that they earlier ate fish or meat just once a month, but now they could afford these once a week. Another group said that while earlier they ate fish or meat only two or three times in a month, now their children have milk and eggs almost daily, (Delduar, Tangail).

    Further, it would seem that in the matter of food, there is no clear discrimination against the girl-child. Girls get eggs or milk as frequently as boys do. Overall, as we will discuss later in this paper, there is clearly a substantial rise in the status of girls, reflected in the higher enrolment of girls than boys in school.

    In the use of income from credit-based enterprises, women mentioned a greater expenditure for food, clothes, children’s education, and health, including their own. Women routinely have more clothes than they had earlier, and more clothes than their mothers did.

    Greater expenditure on health does not in itself mean better health, but it does show an increased ability to respond to health problems. Further, with women now recognised as income earners, there could also be a greater willingness to use still limited household income for tending to women’s health. The necessity of making regular, weekly instalments imposes a need to sustain the income-earning activities from which the payments are made. This discipline of the market, concretised through the credit system has been impressed on the routines of household work and economics, and is also reflected in the rather high usage of contraceptives in rural Bangladesh.

    Improvements in well-being are also reflected in home improvements. The major home improvements are the substitution of a tin roof for a thatched one and the addition of some furniture (a bed, table and chairs), which are now quite common in rural homes.

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    6. Household Decision-Making

    From the fact that a part of household income now accrues to or through women, one would expect a greater participation of women in household decision-making. Women generally report such greater participation. There was more consultation with women, rather than the earlier unilateral decision-making by men. In cases where women used credit money to run their own micro-enterprises, they said that they had more of a say than in cases where they gave the money to their husbands or sons.

    Where women themselves carried out the sales, which meant it was done at the doorstep, women directly got the income and could decide on how to spend it, generally for various household needs, including food and children’s educational needs. But even when men did the final marketing, women said that the sales income was given to them.

    Women also thought that the availability of more money led to less conflict on how to use it, and that women could have a greater say in the manner of spending household income. Earlier they could say nothing, or risked a beating if they objected to the manner in which income was being spent. Now, “I can show some temper and the man listens to me,” (Sreepur, Gazipur).

    Earlier men decided even on choice of saris and other clothes, with little regard to what women themselves preferred. But women reported a change in the manner of buying clothes, etc. “If you have no money, there is no value for your choice. Now I go with my husband to buy my sari,” (Mirzapur, Tangail). Sufia’s husband took her to the market so that she could buy the salwar-kameez of her choice. This happened in the case of buying jewellery too. Women go to the market with their husbands. They choose the items they want and also make the payment. Husbands are there just to accompany them.

    With women now earning some of the household cash income it should be possible for women to give presents to members of their natal families. Did this actually take place? In every group there were clear statements that members did in fact make such presents, particularly to their mothers. “Sometimes we buy small gifts for our mothers or others staying in the natal home.” Or, “We buy gifts for our parents’ family, particularly for our mothers,” (Raipura, Narsinghdi). This is something that they could not do earlier, when they themselves were not earning the family’s cash income and clearly shows the increased influence women have over the use of household income, including its use to maintain the matri-social networks on which they can rely in times of crisis.

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    7. Samman/Dignity

    Many of the points made above show that there is an increased self-esteem and enhanced dignity, both within the household and within society, for these women. The women point out that their men consult them much more than earlier. Instead of just buying any clothes for their wives, now they would ask for their preferences before going to the market. Of course, in a number of cases women themselves were going to the market to buy their own clothes.

    As part of the increased dignity, was the reported reduction in men’s violence in the home. “Violence has reduced. And now husbands even respect (salute) us. Also sons and daughters respect us,” a woman from Narsinghdi.

    The reduction of domestic violence was mentioned in virtually every group. As it was put in one group. “We were in fire; now we are in water,” (Kaliganj, Gazipur) i e, in a relatively better position, though not as good as dry land. Women further said, as mentioned earlier, that now they could also talk or even shout back at their husbands, which would have been unthinkable before they began to get credit and earn an income.

    Solidarity and Groups

    bThe possibility of members of SCGs standing for and winning elections to local councils clearly depends on solidarity within the group. The group is needed to gather the strength to contest, to conduct the election campaign and to vote and secure other votes in the election. Particularly for someone from the poorer sections of society such an effort would be impossible without a group.

    But it is not only with respect to such clearly group activities that the group is needed. Group solidarity is needed to help women who are opposed in some activities, or even in unrelated matters, by their husbands. Dealing with domestic violence, and marital discord with the threat of divorce (something on which men in Bangladesh very much have the upper hand) are difficult at the individual level. Group intervention is needed to protect women from eviction from their own houses.

    This the groups have done to quite an extent. “Women’s solidarity in the samiti has increased a great deal. In one case they took to task a husband who was rough with his wife, a member of the samiti,” (Sreepur, Gazipur). “We have developed group solidarity and identity as members of the samiti, which we have used to prevent the taking of second wives by two men in this village. I am also raising this (membership of the samiti) as a major point in negotiating the marriage of my daughter,” Rashida, along with other members of the SCG, (Tangail).

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    8. The Market

    The market has traditionally been the most taboo area for women. This is so not only in purdah ridden Bangladesh, but also in most of the Indo-Gangetic belt, including north India and Pakistan. Women who go to the market lose social standing. If women do have to go to the market, they should be as quick about it as possible.

    Women may directly sell minor items, such as eggs and vegetables, either at their doorsteps to itinerant traders or through children taking them to market. Otherwise, they give the produce to their husbands or other male members of the family who take the produce to the market

    Where there is a major change, however, is in going to the market to buy something, like clothes for themselves and their children, schoolbooks, cosmetics, jewellery, etc. Going to the market for such purposes, either accompanied by their husbands or as a group of women, has become a regular feature of women’s activities.

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    9. Savings

    Women have three forms of savings – gold jewellery, cash savings and in NGO account. The first is bought with the full knowledge of their men. But there is a strong tendency to hide any cash savings from their husbands and sons. This is not something new in Bangladesh, where rural women have a long-standing practice of ‘secret’ savings [Kabeer 2001: 75].

    Traditionally jewellery was bought with ‘men’s money’, ignoring women’s contribution to the household well-being. In the event of divorce women were expected to leave everything they had, except for the set of clothes they would wear, and that would be the worst set they had. Any gold jewellery would remain behind with the husband.

    The other factor is that women might expect that since the jewellery has been bought with their own money, they would be able to claim the jewellery in the event of divorce.

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    10. Village phone programme

    Professor Yunus has long argued that information and communications technology (ICT) has the potential to bring unprecendented employment opportunities for the poor. GB's Village Phone Project is an extraordinary example of how powerful ICT can be in the hands of the poor. A Grameen borrower receives a handset with Grameen Bank financing and becomes the telephone-lady of the village, selling telephone services to the villagers, usually in places where fixed lines did not exist. In the process, she makes an income on average higher than twice the national per capita income. By October 2005, Grameen had provided more than 172,000 poor women with mobile phones for income generation in villages across Bangladesh.

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    11. Pension fund and other savings

    In recent years, Grameen Bank has introduced a range of attractive new savings products for borrowers. The personal and special savings accounts of old remain, but have been made more flexible in terms of facilities available to them. GB has also introduced pension deposit fund which enables the member to receive, after a ten year period, a guaranteed amount which is almost double the amount she has put in over that time. In October 2005, GB's deposits total $441 million of which $282 million are its members deposits. The savings products of Grameen Bank II are enabling not only its members to become self reliant but has paved the way for Grameen Bank's own self reliance.

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    12. Self-reliance for GB

    In 1995, GB decided not to receive any more donor funds, since which time it has not requested any fresh funds from donors. The last installment of donor fund which was in the pipeline was received in 1998.

    Today, Grameen Bank's total of outstanding loans is approximately $405 million. Deposits as a percentage of outstanding loans today is 109 percent. If it takes into account its own resources as well as deposits, this percentage is 131 percent. Since Grameen Bank came into being, it has made profit every year except in 1983, 1991, and 1992. GB does not foresee having to take any more donor money or even take new loans from internal or external sources in future. GB's growing deposits will be more than sufficient to repay its existing loans, and run and expand its credit programme.

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    13. High Cost of Microcredit

    One of the complaints frequently made by women was that the cost of credit from the NGOs was very high and should be brought down. The other main complaint was that the loan given was very small, with the concomitant demand that the loan limit should be increased.

    The now-standard rate of interest charged by NGOs is 15 per cent. What makes it even higher is that while repayments are collected weekly, meaning that 2 per cent of the principal is returned every week, the interest rate is calculated over the whole year on the full amount of the loan, and not on the outstanding balance, as is the practice with commercial bank loans. This makes the effective rate of interest over the whole year, amount to 30 per cent. NGOs themselves admit that this is the possible actual rate of interest [Ahammed 2003]. Where repayments are not fully collected weekly the rate of return on NGO loans may fall to about 24 per cent.

    The NGOs justify this high rate of interest on the basis of the high cost of supervision of microcredit [Ahammed 2003]. The cost of supervision of small loans with weekly repayments is certainly higher than it is in the usual commercial bank loans.
    Often the members protest to pay high interest,:Micro-credit and rural women and many cases it is misused but still better than local money lenders.

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    14. The Struggle for Survival and Credibility among the Religious NGOs (Non-Governmental Organizations) in Bangladesh

    Many activist women understand Bangladesh as a country that should encourage women's equality and promote harmony between people of different faiths. Tragically, they face tremendous opposition from religious figureheads along with the threats and fatwas- was that fundamentalist insanity is gaining notoriety for. Fatwas are proving quite effective in gaining results for ambitious fundamentalist leaders world- wide, who deem explorative thought as anathema to religious principles.

    For women, increasing fundamentalism in Bangladesh is a threat to the little rights and freedoms that they currently have. Women are already repressed by gender-biased social norms and extreme poverty. Fundamentalist ideology could have detrimental effects on women, and succeed in excluding and marginalizing them even further. Eliza Griswold spoke with Mufti Fazlul Haque Amini, who has served as a member of Parliament for the past three years. She reported him saying that “he believes that secular law has failed Bangladesh and that it’s time to implement Sharia, the legal code of Islam”. This may not occur formally, but within the social fabric of Bangladesh, and coupled with a legal system that consistently fails to address issues of rape, torture and murder, women are threatened both physically and emotionally, as well as being crippled economically – due to increasing fundamentalist forces within the country.

    Biased mentalities that do not recognise women as equal citizens could be compounded by localized Sharia interpretations of Islam, where family laws “frequently require women to obtain a male relative’s permission to undertake activities that should be theirs by right. This increases the dependency women have on their male family members in economic, social, and legal matters.

    Since the independence of Bangladesh in 1971, the state has largely failed to assist the poor or reduce poverty, and NGOs have grown dramatically, ostens ibly to fill this gap. There are more and bigger NGOs here than in any country of equivalent size. The target group approach has allowed NGOs in Bangladesh to work successfully with the rural poor and provide inputs to a constituency generally bypassed by the state .

    This innovation led to a concentration of efforts into small-scale, home-based income-generating activities such as cattle and poultry-rearing, food processing, social forestry, apiculture and rural handicrafts, combined with the provision of microcredit, to which the landless had previously been denied access except from local moneylenders at high cost. Recently, most NGOs in Bangladesh have taken microcredit as their major activity, which has resulted in resistance from some religious leaders and organisations.

    Charging of interest is forbidden in Islam. NGOs said the fundamentalists had objected to Muslim women going out to work. Other NGO activities like non-formal schools for children and trees planted by NGO clients have also been attacked. While religion and development were considered to be two distinct categories with no overlap for the better part of the 20th century, their interdependence came to be recognized during the last decade. In Bangladesh the link between religion and development is even more evident, because religious and spiritual leaders have a great hold on people’s hearts and actions. They can trigger impulses leading to sustainable development or mar development through fundamentalist attitudes. In Bangladesh, there is a general view that RNGOs are well funded from outside. It is believed that Islamic NGOs are funded by state agencies and NGOs of the oil-rich Gulf countries, Christian missionary NGOs from their fellow Churches and their followers.

    An independent US panel on religious freedom expressed concern Tuesday over growing Islamist militancy in Bangladesh and violence against individuals and groups perceived as ‘un-Islamic.’ Bangladesh could be a model for other emerging democracies with majority Muslim populations but ‘that model is in jeopardy,’ warned Felice Gaer, chairwoman of the US Commission on International Religious Freedom, a bipartisan federal agency. She warned about ‘growing Islamist militancy and the failure to prosecute those responsible for violent acts carried out against Bangladeshi individuals, organisations and businesses perceived as ‘un-Islamic.’,(New Age, October 19, 2006).

    The Shariah, Mullah and Muslims in Bangladesh

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    A study by World Bank economist Shahid Khandker in 2005 suggests that micro-finance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level in Bangladesh. Micro-finance thus helps not only poor participants but also the local economy. Grameen Bank's own internal survey based on 10 objective indicators shows that 55 percent of its members have already crossed the poverty line.

    A Social Change needs also Political Change

    Yunus told the press (October 17, 2006) that he would ‘continue his campaign for promoting clean and competent candidates in national polls’, adding: ‘If necessary, I’ll form a political party.’ He said there has been a suggestion that the campaign for clean candidates will not be successful if its protagonists are not part of the political process. ‘Is it too hard to form a party?’ he asked the people present. The country is trapped in a political maze and people are looking for a way out, observed Yunus. ‘We need to break out of this maze. I am not saying that I will be successful. But the effort should be made,’ he added. However, the Awami League’s general secretary, Abdul Jalil, declined to say anything about Yunus’ plan to float a political party, ‘if necessary’.

    Nobel laureate Professor Muhammad Yunus’s wish to form a political party evoked mixed reactions among political and civil society circles. While some politicians refused to comment, others reminded him of the difficulties involved in political activism. The civil society leaders were also divided on the issue, with some of them hailing the idea and others advising him to remain above politics.

    After two decades and more of NGO micro-credit based activity, there is no longer an idea that women’s income-earning activities are temporary and reversible. These new practices also have their counterpart in new norms of status of women and thus the creation of a new culture. As discussed below, there is a clear change in gender norms and the creation of new norms of the non-exclusionary type.

    Women have begun to think of new norms. On the whole, they do not justify their practices in terms of the old norms of purdah, or even as temporary deviations from the same. In discussions with the women of the SCGs, it was repeatedly pointed out that samman or respect no longer consisted of being in purdah. This repeated assertion tells us that new norms are being created, more in consonance with the new practices.

    Who is a sammani mahila, a woman of honour or respect? “A woman, who has land, education and knowledge. Health is also important. We do not agree with the traditional idea of purdah-nashin (women in purdah) as being respected.” One woman of this group in fact said, “Purdah is like a prison; one who stays at home, and whose resources are under the control of husband or son is like a prisoner,” (Narsinghdi).

    “One who is working outside the home has her own money/independent earnings and is free to go anywhere. She must be educated and also well behaved, she must not shout at or ignore the poor and illiterate,” women said in chorus during field discussions (Raipura, Narsinghdi).

    The field of the changes were initially and still are primarily economic, the development of various types of micro-enterprises, etc. But the new types of practice in their humblest forms change the very structure of the social conditions of production that “lead the dominated to take the point of view of the dominant on the dominant and on themselves” [Bourdieu 2001: 42]. What is the change in the social condition of production? In the briefest manner this can be expressed as a change in the social structure of accumulation at the level of the household from having been a men-centred accumulation, an accumulation in men’s hands, to an accumulation that is also partly women-centred, some accumulation in women’s hands.

    But what gives us a clue to the far-reaching consequences of this transformation is the manner in which gender norms of respect are being re-created from glorifying purdah-nashin women or their seclusion and dependence to valuing independent income, education, work outside the home, mobility and professional engagement. As women changed their practice, over time so too have they changed the norms and the concepts with which they make sense of the world.

    “Gradually and steadily, we will break all these shackles of tradition that bind us as women,” says Nargis (a pregnant woman and mother of three children) with the support of most members of an UPAMA SCG. Savita, a member of another SCG in Kishoreganj, says, “If I could provide education to my daughter, she would then become as important as the son in the family”

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    16. References

  • Yunus, M., August 2006,
  • Bhatti, K. 2005. “Political chaos, Islamic fundamentalism and poverty”. Available from http://www.socialistworld.net/eng/2005/02/10bangladesh.html
  • Asia News 2005. “People defend democracy against rise in Islamic extremism”. 11 February 2005.
  • Kabeer, Naila (2000): The Power to Choose: Bangladeshi Women Workers and Labour Market Decisions, Vistaar Publications, New Delhi. – (2001): ‘Conflicts Over Credit: Re-Evaluating the Empowerment Potential of Loans to Women in Rural Bangladesh’ in World Development, Vol 29, No 1, pp 63-84.
  • Govind Kelkar, Dev Nathan, Rownok Jahan, Microcredit and Gender Relations in Rural Bangladesh, EPW, 2004.
  • Morshed, L. , Feb 4, 2006, Rochelle Jones 27 May, 2005.
  • Asia News 2005. People defend democracy against rise in Islamic extremism.
  • 11 February 2005, The Daily Star.
  • Bengali Newspapers, Daily Ittefaque, Jugantor, Prothom Alo.
  • Ahammed, Iqbal (2003): ‘Rate of Interest in Micro-Credit Sector: Comparing NGOs with Commercial Banks’, paper presented at International Seminar on Attacking Poverty with Micro-Credit, PKSF, Dhaka, January 8-9,
  • Rozario, Santi (2002): ‘Gender Dimensions of Rural Change’ in Kazi Ali Toufique and Cate Turton (eds), Hands Not Land: How Livelihoods are Changing in Rural Bangladesh, BIDS and DFID, Dhaka
  • UNFPA (2003): ‘Assessment of Male Attitudes Towards Violence against Women’, reported in The Bangladesh Observer, Dhaka, August 14.,2005)

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    Last Modified:July 24, 2007