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Grameen bank
1. INTRODUCTION
'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.
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.
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.
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.
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). 2. Conventional bank do not lend to the poor
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!"
General features of Grameencredit are :
A member is considered to have moved out of poverty if her
family fulfills the following criteria:
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.
The sixteen decisions
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. 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. 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). 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. 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.
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. 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. 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. 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.
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. 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. 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. 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. 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. 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 . 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 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’.
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.
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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The success of Grameen project
is entirely due to the responsiblity and participatation by
the women. Rabinranath Tagore knew this.
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.
Grameen 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 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.
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
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. 
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. 
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.
Today, 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.
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.
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).
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.
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. 
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. 
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].
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.
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. 
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.
1. Vision for Bangladesh