Chapter One
Introduction
1.1
Introduction
Bangladesh is a rural country and most of the people
live in village. Maximum people of Bangladesh is landless and asset less. My
study is in the field of Grameen Bank with reference Ashulia district Pathalia
branch.The economic development of Bangladesh depends on rural development. So,
my study is very important is this context. Grameen Bank (GB) has reversed conventional banking
practice by removing the need for collateral and created a banking system based
on mutual trust, accountability, participation and creativity. GB provides
credit to the poorest of the poor in rural Bangladesh, without any collateral.
At GB, credit is a cost effective weapon to fight poverty and it serves as a
catalyst in the over all development of socio-economic conditions of the poor
who have been kept outside the banking orbit on the ground that they are poor
and hence not bankable. Professor Muhammad Yunus, the founder of “Grameen Bank”
reasoned that if financial resources can be made available to the poor people
on terms and conditions that are appropriate and reasonable, “these millions of
small people with their millions of small pursuits can add up to create the
biggest development wonder.”
As of December, 2017, it has 8.93 million borrowers,
97 percent of whom are women. With 2,568 branches, GB provides services in
81,400 villages, covering more than 97 percent of the total villages in
Bangladesh.
Grameen Bank’s positive impact on its poor and
formerly poor borrowers has been documented in many independent studies carried
out by external agencies including the World Bank, the International Food
Research Policy Institute (IFPRI) and the Bangladesh Institute of Development
Studies (BIDS).
1.2 Origin of the Report
Project
is a mandatory program for all students of MBA under Prime University. Practical
orientation is positive development in professional area. For the completion of
this project program, I have chosen a bank named “Grameen Bank" and my project
report is based on. I have prepared this report under Fahimul
Kader Siddique, Lecturer, Department of Business Administration. In the
study period mainly student’s gain theoretical knowledge but now a day, in the
job market there is no substitute of practical work experience. Therefore,
before entering into job, students should have some real work experience in the
major field of study on the career choice that interest.
1.3 Scope of the Study
Bank has
multidimensional economies activities and services. this reports provide a
great opportunity to have an in depth knowledge of majority of the banking
activities practiced by the Grameen Bank. The study is focused on the following
areas of the Grameen Bank.
v This
Report will identify the relationship of Grameen Bank with poor people as a
borrower organization.
v Identify
the micro finance system that helps & useful for the poor people.
v Study
on personal development by using Grameen Bank services as a member.
v Study
on social development by Grameen social business.
v Broadly
discuss about the procedure of Grameen Bank loan system.
v This
Report will find out the effectiveness of the bank services.
v The
scope of this study was confined to the Grameen Bank head office, branch office
& personal contact with the employees of Grameen Bank.
1.4 Purpose and Objectives
of the Study
Theoretical knowledge is acquired for the
purpose of applying is the practical life. Different importance of project
training programs are-
Ø It gives the opportunity to know
about the present situation of the institution.
Ø Review the advancement of the
institutions,
Ø It plays as important rile for the
students of Business Studies and also to copulate their theoretical studies
such s student may be service holder or Business person in future.
Ø To enact different policies for the
overall development of the institutions.
Ø Provides the guide about which type
of which kind of administrative skill is necessary to conduct the institution.
Ø Real experience can be gained can be
gained through practical one.
Ø Whether
the Grameen Bank is loyal to interpret loan system properly, Collection and
disbursement policy are reasonable.
Ø Weather
Grameen Bank does his work with transparence management system. To
justification of the methods to reducing poverty.
Ø Weather
Grameen Bank creates awareness “Sixteen Decision” in the borrower mind.
Ø To
measure the status of empowerment of rural women (both member and non-member of
the Micro Credit Organization) in the selected areas.
Ø To
assess the role of the Micro Credit Organization in empowering rural pupil in
Bangladesh.
Ø To
know how well the ranking procedure is maintained.
1.5 Methodology
of the Study
1.5.1 Sources of
Data:
Both
primary and secondary data are used to prepare this report. The collection of
these two types of data is shown respectively.
Collection of Primary
Data:
Primary
Data are mainly collected from the practical experience and queries firm the
employees as well as the member of Grameen Bank. Thus, the primary data such as
information regarding the overview of GB, interest rates and charges, credit
operation performance measurement in lending, credit policies, loan agreement
etc. were collected.
Collection of Secondary Data:
Data
regarding the credit operation and others of the GB were collected from
secondary sources like: Annual Report, Manual and Publications of GB, Grameen
Bank Library, Internet, Newspaper and Brochures etc. were the main sources of
Secondary data.
1.6
Research Design
Both qualitative and quantitative methods were applied
for preparing this report. The data were analyzed and presented by Microsoft
excel and shows percentage, graphical presentation and different types of
charts. Best effort was given to analyze the numerical findings.
1.7 Limitation
of the Study
Time limitation: It was really very short time to know about
an organization like Grameen Bank.
Inadequate Data: The unwillingness of
the busy key persons, necessary data collection became hard.
Lack of Record: Large scale research was
not possible due to constrains and restrictions posed by the organization.
Unavailability of sufficient written documents as required making a
comprehensive study. In many cases up to date information was not available.
Lack of Experiences: Lack experiences
have acted as constraints in the way of meticulous exploration of the topic.
Being the temporary member of the organization, it is not possible on my part
to express some of the sensitive issues.
Chapter Two
Theoretical Framework
2.1
Loan Proposal Making& Approval Process and Loan Disbursement System
For being a Member of the bank does not give any
guarantee to get loan. To get loan from Grameen Bank starts with a live and
interactive loan proposal making and disbursement process. Generally loan
proposal making and disbursement process follow the following steps:
Ø
The member who wants to borrow money, he/she has
to confident on his/her investment personally. Then he/she has to inform
his/her family members about the investment.
Ø
Then he/she verbally discuss with his/her group
members about the projected investment. Group members input their thoughtful
comments on it and applicant member try to fix the amount of the loan. After
the discussion, applicant member request his/her group chairman/secretary to
propose this loan to the bank verbally through center chief.
Ø
During the center meeting, center chief formally
raise the issue of loan proposal after daily loan and savings collection.
Center chief propose verbally to the center manager for loan on behalf of
applicant member.
Ø
Then the center manager takes an interview of
the loan applicant member and discusses with the center members. In this
discussion the center manger will confirm about the purpose of the loan,
eligibility of the applicant member to maintain the loan, risk & return on
the investment, possible amount of investment with source and amount of the
loan, loan installment amount & repayment system. If the loan is larger
amount then it goes for Microenterprise loan under Special Investment Project.
Then the center manager will ask for center regulation with at least 60%
members’ signature.
Ø
If center manager find all indicators positive
then he/she ask center chief to propose this loan in written form which is
known as “Rough Loan Proposal Form In
Center”Form No-78 (Rough loan proposal). On behalf of the members the
center manager fills up all columns and takes signatures of loan applicant member and center chief in the mentioned column
and ask loan applicant member to deposit loan insurance savings in his/her
personal savings account on the same day.
Ø
If center manager does not find the indicators
right then he/she identify the weakness of the proposal and ask the applicant
member as well as the center members to correct it more realistic way and
propose in next center meeting.
Ø
The Center manager collects the passbook of loan
applicant member along with Form No-78, visits the applicant member’s house and
project in person.
Ø
By this way the center manager collects loan
proposal round the week from different centers. End of the week he/she compile all
centers loan proposal in a different form which is known as “Loan Proposal, Loan ceiling and Loan
Approval Form”Form No-2(KA)/(GA) and full fill all columns properly except
Approved loan amount column & sign in mentioned given place. Then this Form
No-2(KA)/(GA) along with From No-78, Center regulation (if necessary) and
Passbook submit for Branch manager’s recommendation.
Ø
Then the Branch manager asks to the second
signatory to check all columns and papers accordingly and signed in given
column and place.
Ø
After this, the Branch manager checks all
columns, related papers & documents again carefully, sign in mentioned
column & place and visit loan applicant member’s house & loan project
in person sampling base for justification of loan. If branch manager does not
find the indicators right then he/she identify the weakness of the proposal and
ask center manager, applicant member as well as the center members to correct
it more realistic way and propose in next center meeting.
Ø
If everything in the right way, then Branch
manager send all documents to the Area office with a forwarding letter to
approve the loan proposals once or twice a week.
Ø
At Area office, Program officer check all
documents with Data management center and make a list of loan applicant members
& amount of loan for loan approval by concern authority. Then Program
officer inputs his/her recommendation & sign and submit to Area Manager.
Ø
Area Manager checks all documents once again and
justifies loan proposals from grassroots by using different tools and
techniques. Then he/she approve loan according to his/her power limit. After
approval, area manager send back the documents to the branch office for loan
disbursement according to rules and regulations of Loan disbursement system.If
Area manager does not find the indicators right then he/she identify the
weakness of the proposal and ask branch manager center manager, applicant
member as well as the center members to correct it more realistic way and
propose in next center meeting.
Ø
The loan proposals which above Area Manager’s
power limit, those are sent to Zonal Office. Area Manager also input his/her
recommendation with a forwarding letter when the loan proposals are sent to
Zonal office.
Ø
In Zonal Office, monitoring & evaluation
unit receives the loan proposals and checks all documents and input unit
chief’s recommendation then submit to Zonal Manager for approval. Zonal Manager
checks all documents once again and justifies loan proposals from grassroots by
using different tools and techniques. Then Zonal manager approves loan
according to power limit. After approval, Zonal manager send back the documents
to the branch office through area office for disbursement according to rules
and regulations of Loan disbursement system. If Zonal Manager does not find the
indicators right then he/she identify the weakness of the proposal and ask Area
Manager, branch manager and center manager to correct it more realistic way and
propose in next center meeting.
Ø
The loan proposals which above Zonal Manager’s
power limit, those are sent to Head Office. Zonal Manager also input his/her
recommendation with a forwarding letter when the loan proposals are sent to
Head office.
Ø
In Head Office, Coordination & Operation
Department receives the loan proposals and checks all documents and input unit
chief’s recommendation then submit to General Manager for approval.General
Manager checks all documents once again and justifies loan proposals from
grassroots by using different tools and techniques. Then General Manager
approves loan proposal. After approval, Coordination & Operation Department
send back the documents to the branch office through zonal office and area
office for disbursement according to rules and regulations of Loan disbursement
system.If GeneralManager does not find the indicators right then he/she
identify the weakness of the proposal and ask responsible persons to correct it
in more realistic way and propose in next time.
When the Branch office receives the approved loan
proposal, then it (Branch office) take steps for loan disbursement. It starts
with informing loan applicant member during the following center meetings.
After center meeting loan applicant member come to the branch office along with
required documents and witness. The witness should be either family member or
one of the members from the respective center.Loan disbursement system is
commonly known as loan disbursement ceremony. It also follows some steps:
Ø
After return from center meeting, center manager
prepare prescribe form which known as “Disbursement Process on Micro-Credit of
Gremeen Bank” ledger”Form No-3(GA)
as per approved loan proposal. In the same form loan applicant member put
his/her signature on given column and add revenue stamp on it.
Ø
Center manager set a loan repayment agreement on
the same form in given columnaccording to rules of the bank, loan applicant
member’s ability and wish. Then set loan installment (loan & interest) also
in the same form different column.
Ø
Then two witnesses put their signature on given
column in the same form.
Ø
Center manager write down loan disbursement
history in the borrower’s passbook’s respective pages and columns according to
loan disbursement ledger form.
Ø
The Center manager does the same entry in
collection sheet also.
Ø
Then center manager prepare a transfer voucher
for borrower’s loan insurance.
Ø
Then center manager collect exact disburse
amount of money from second signatory (cashier) and prepare denote.
Ø
Then center manager ask borrowers to come at
Branch Manager’s table and center manager bring all documents (approved loan
proposal, loan disbursement ledger, borrower’s passbook, collection sheet,
signature card/center attendance register, transfer voucher and denoted money)
and witnesses to Branch Manager.
Ø
Then Branch Manager will take interview of loan
applicant member and his/her family member (if present), ask witness about
borrower’s loan related issues and check all documents to confirm all entry has
been done properly in right place. Branch Manager also gives some thoughtful
advice and suggestion to the members about loan utilization and repayment
manner.
Ø
Then Branch Manager handed over money to loan
applicant member and ask to count money for confirming disburse amount. By this
way loan disbursement has been done.
2.2 Advantages of Grameen Bank
Ø
It’s a brand to all types of customers.
Ø
Principal Branch has some active and
well-organized human resources who maintain the Daily activities more smoothly.
Ø
The Credit department now performs relatively
better than previous as they have batter but precious information about this.
Ø
Credit department is also smooth in processing
the necessary investment documents and in sanctioning credit/investment to the
customers.
Ø
It has a lot of clients and they are very
faithful.
Ø
Principal branch has much space for performing
banking activities and for relaxation of the customer.
Ø
They have proper management services for the
customer.
Ø
Relationship among the employees is good in all
cases.
Ø
Loan transaction process is very lengthy.
Ø
Loan Amount is relatively narrow
Ø
CIB report is not available time to time from
Bangladesh Bank.
2.4
Deposits /Savings Types
Grameen Bank offers 6 different types of Deposit or
saving on different purposes pursue by the member of Grameen Bank.
Figure 02: Different types of Deposit or Saving Account.
1. The
personal saving Account:
As part of joining program, every Grameen borrower has to
open a savings/ deposit account. Usually borrowers Deposit savings every week
with their installments; they get the option of whim-swing their savings
anytime they want. This is the Basic Personal Savings account Grameen
offers. The depositors are offered
around 8.5 percent interest on their savings per annum.
2. The
Grameen Pension Scheme (OPS):
Grameen pension scheme (GPS)
is another savings program specifically aimed for borrowers. It is monthly
deposit scheme. The GPS is divided into two parts. One of the GPS schemes is
offered for five years with a ten percent interest per annum while the other is
a ten years scheme with a twelve percent interest per annum. The deposit
program of the GPS is not flexible and the same amount of money has to be
deposit every month. To use the money in a GPS account, depositor has the whole
account.
3. The
Fixed Deposit Savings Account:
The fixed Deposit savings
program is open to all borrowers and non-borrowers. In a fixed deposit account,
the deposits for one year are offered an8.75 percent interest rate two years is
offered a 9.25 percent interest rate while a three years deposit is offered 9.5
percent interest.
4. The
“double in seven years" Account:
The double in seven year program is also open to all and
the deposit amount doubles in seven years, depositors en Wm my anytime.
5. The
Monthly Profit Scheme:
The Monthly profit scheme
program is offered to all and is mostly sought by people who tend to have extra
money. The depositors have to keep the money with the bank for minimum five
years and are offered fixed profit every month.
6. The loan Insurance Account:
The last type of savings
deposit offered is the Loan Insurance saving which was introduced by the bank
as an insurance policy to write off loans in case a borrower dies.
2.5 Empowerment of Women
The empowerment of women is one of the central issues in
the process of development of all developing countries in the world.
Historically, women in Bangladesh are deprived socially and economically
compared to men. Disparities between men and women prevails here in education,
health, employment and income opportunities, control over assets, personal
security and participation in the political process that make women
disadvantaged and less empowered, which limits the country's ability to achieve
its full potential.
It is well
established that women have less access than men to investments in skills, knowledge and lifelong learning.
The empowerment of women is an essential prerequisite for the exclusion of
world poverty and the upholding of human rights. The World Bank study in
Bangladesh highlights that women have limited role in household decision-making,
limited access and control over household resources (physical and financial
assets), low level of individual assets, heavy domestic workloads, restricted
mobility and inadequate knowledge and skills that leading to women's
vulnerability.
2.6 Case Study
Jorimon
Jorimon was born in a very poor family in around 1952.
Her father was very careless, capricious & did not bother about filial
obligations. So her childhood was really a bad time & she was forced to
marry a 22 years old man named Rustom when her age was 10 in 1962. Her husband
was also a very poor man. His father died before their weeding & mother was
a beggar. Rustom’s salary was tk15 per month including food & lodging. He
got married with Jorimon in exchange for one years of salary. So later both of
the husband & wife started to work as slave to their master.
Jorimon’s father lived in reserved area of forest
department. When he died her mother asked them to live with them. As her
husband has no house he was agreed & his previous master also has property
there, so he easily got job there. It included three meals per day plus monthly
salary of tk30. Jorimon works with her mother, husking paddy at the dheki sheds
of the villagers. So her husband’s wages easily remain intact. The only expense
was in clothing. In this way they were able to save tk125 in six months and
were able to take a sub-lease of land (24 decimals) on which they lived from
forest department. Such lease holders need to vacate the land when forest
department required them to do so.
Jorimon has three children. They have born in 1967, 1970
& 1974. All the time of her pregnancy she was always very ill. Specially,
in 1974 the year of famine. There was free-feeding center but it did not enlist
them because of rumor spread by villagers. On the other hand they could not buy
rice at tk9 or tk10 a seer. So they often ate watery gruel made from coarse
flour. This caused her tiny babies health deteriorates. To them 1971 the war of
liberation did not affect them in special way. at that time once she buried a
pot of paddy in the ground, three days later when she unearthed the pot found
that the almost paddy is spoiled.
In 1975 her husband started a wood business. He borrowed
tk1000 from his master & to pay tk100 per month as interest. There was not
so profit after paying interest. After three month he needed tk200. He was
forced to return the rest of capital (tk800).
All of their tiny property destroyed in the flood of
1980. They were forced to become refuge in neighbor’s house. Jorimon works in
others dheki, received one seer of rice in return for husking one mound of
paddy & her husband started as river wharf. He earns tk8-10 per day. At
that time their monthly income was tk308 & expense was tk410. So they spent
hard days. But Jorimon dreamt to start an independent business.
She got the chance
when Grameen Bank opened a branch in Hatubhanga (Tangail). Jorimon got together
with four other women & on 20th December 1979 she became a
registered member. Later on, in January 1980 her group received their first
loan of tk600. She bought a dheki for tk20 & with great enthusiasm &
excitement she started her paddy husking business. Every Wednesday her husband
bought 4 mounds of paddy. The whole week Jorimon husks the paddy on her
dheki& sold the rice. She & her son collected firewood, bamboo roots,
and leaves from the forest. The dry powdery chaff from the paddy husk was also
use as fuel for parboiling the paddy.
2.7 Strategies
created by Grameen Bank
Ø
Strategies for create successful Microfinance organization: Microfinance is the provision of
financial services to low-income clients, including consumers and the
self-employed, who traditionally lack access to banking and related services.
Those who promote microfinance generally believe that such access will help
poor people out of poverty.
Ø
To better meet its ultimate goal of social and
economic development, Grameen Bank targets women more than men. By doing so, it
directly channels credit to the poorest and the least empowered and helps
improve the living standards of their families. Along with providing credit, Grameen
Bank offers guidelines to members for codes of conduct and activities aimed at
improving their social and financial conditions.
Ø
Strategies for Create social business for social
development.
Ø
Strategies for Create self-employment &
reduction unemployment.
2.8 Beggars as Members
Begging is the last resort for survival for a poor
person, unless he/she turns into crime or other forms of illegal activities.
Among the beggars there are disabled, blind, and retarded people, as well as
old people with ill health. Grameen Bank has taken up a special program in
2002, called Struggling Members Program exclusively for the beggars. Over
112,454 beggars have joined the program. Total amount disbursed stands today at
Tk. 155.91 million. Of this amount of Tk. 123.24 million (79% of the amount
disbursed) has already been paid off. Over 19,536 beggars have left begging and
are making a living as door-to-door sales persons.
Basic features of the
program are:
Ø
Existing rules of Grameen Bank do not apply to
beggar members; they make up their own rules.
Ø
All loans are interest-free. Loans can be for
very long term, to make repayment installments very small. For example, for a
loan to buy a quilt or a mosquito-net, or an umbrella, many borrowers are
paying Tk. 2.00 (3.4 cents US) per week.
Ø
Beggar members are covered under life insurance
and loan insurance program without paying any cost.
Ø
Groups and centers are encouraged to become
patrons of the beggar members.
Ø
Objective of the program is to provide financial
services to the beggars to help them find a dignified livelihood send their
children to school and graduate into becoming regular Grameen Bank members.
2.9 Literature Review
As of December,
2017, it has 8.93 million borrowers, 97 percent of whom are women. With 2,568
branches, Grameen Bank provides services in 81,400 villages, covering more than
97 percent of the total villages in Bangladesh.
It is an
independent and separate bank under Bangladesh Bank. Although Grameen Bank
authority claims it is not a fully bank or NGO. In our country GrameenBank started its
operation after 1974. When the country was full of ravage. Growth rate of
population is very high on the other side asset is very few. Most often there
is no consistency between the planning of asset & reality. As a result we
cannot achieve success. To the people whom GB is serving is doing very well but
it is too few than our total need.
Chapter Three
Organizational
Profile
3.1. Brief History
The history of Grameen Bank can be traced back to 1976
when Professor Muhammad Yunus, Head of the Rural Economics Program at the
University of Chittagong, launched an action research project to examine
the possibility of designing a credit delivery system to provide banking
services targeted at the rural poor.
Muhammad Yunus earned a doctorate in
economics
from
Vanderbilt University in the United
States. He was inspired during the
Bangladesh famine of 1974 to make a small
loan of US$27 to a group of 42 families as start-up money so that they could
make items for sale, without the burdens of high interest under
predatory
lending. Yunus believed that making such loans available to a larger
population could stimulate businesses and reduce the widespread rural poverty
in Bangladesh.
Nobel Laureate Muhammad Yunus, the bank's founder Yunus
developed the principles of the Grameen Bank (literally, "Bank of the
Villages" in
Bengali) from his research and experience. He
began to expand microcredit as a research project together with the Rural
Economics Project at Bangladesh's
University of Chittagong to test his
method for providing credit and banking services to the rural poor. In 1976,
the village of Jobra and other villages near the University of Chittagong
became the first areas eligible for service from Grameen Bank. Proving
successful, the Bank project, with support from
Bangladesh
Bank, was extended in 1979 to the
Tangail
District (to the north of the capital,
Dhaka).The bank's success
continued and its services were extended to other districts of Bangladesh.
By a Bangladeshi government
ordinance on October 2, 1983, the project was authorized and established as an
independent bank. Bankers Ron Grzywinski and Mary Houghton of Shore Bank, a
community development bank in Chicago,
helped Yunus with the official incorporation of the bank under a grant from the
Ford Foundation. The bank's repayment rate suffered from the economic disruption
following the 1998 flood in Bangladesh, but it recovered in the subsequent
years. By the beginning of 2005, the bank had loaned over USD 4.7
billionand by the end of 2008, USD 7.6 billion to the poor.
The Bank continues to expand across the nation. By 2006, Grameen Bank
branches numbered over 2,100. Its success has inspired similar projects in more
than 40 countries around the world, including a World Bank initiative to
finance Grameen-type schemes.The bank is also engaged in social
business and entrepreneurship fields. In 2009, the Grameen Creative Lab
collaborated with the
Yunus Centre to create the Global Social
Business Summit. The meeting has become the main platform for social businesses
worldwide to foster discussions, actions and collaborations to develop effective
solutions to the most pressing problems plaguing the world.
3.2
Objectives of Grameen Bank
The objectives of Grameen
Bank are as under:
Ø
Extend banking facilities to rural bottom poor,
without any collateral.
Ø
To eliminate the
exploitation of the money-lenders;
Ø
Create self-employment for the vast unutilized
and underutilized manpower resources of Bangladesh
Ø
To organize the disadvantaged people into small
federation for mutual support and self-sustained socio-economic development.
Ø
Reverse the age-old vicious cycle of poverty
through small credit.
Ø
To extend banking
facilities to the poor men and women;
3.3 Principles
of Grameen Bank
There are four
Principles of Grameen Bank are-
Ø Discipline
Ø Unity
Ø Courage
Ø Hard
work
● Grameen Network
Grameen Network Are Given Below:
1)
Grameen Phone Ltd.
2)
Grameen Telecom
3)
Grameen Communications
4)
GrameenCybernet Ltd.
5)
Grameen Software Ltd.
6)
Grameen IT Park
7)
Grameen Information Highways Ltd.
8)
Grameen Star Education Ltd.
9)
GrameenBitek Ltd.
10)
GrameenUddog (Enterprise)
11)
GrameenShamogree (Products)
12)
Grameen Knitwear Ltd.
13)
GonoshasthayaGrameen Textile Mills Ltd.
14)
GrameenShikkha (Education)
15)
Grameen Capital Management Ltd.
16)
GrameenByabosaBikash (Business Promotion)
17)
GrameenTrust
● Life Insurance
Each year families of deceased borrowers of Grameen Bank
receive a total of Tk. 8 to 10 million (US $ 0.14 million to 0.17 million) in
life insurance benefits. Each family receives Tk. 1,500. A total of 90,086
borrowers died so far in Grameen Bank. Their families collectively received a
total amount of Tk. 170.90 million (US$ 3.72 million). Borrowers are not
required to pay any premium for this life insurance. Borrowers come under this
insurance coverage by being a shareholder of the bank.
● Deposits
By the end of January, 2016 total deposit in Grameen Bank
stood at Tk. 200.00 billion . Member deposit constituted 162
per cent of the total deposits. Balance of member deposits has increased at a
monthly average rate of 12.87 per cent during the last 12 months.
● Computerized MIS and Accounting System
Accounting and information management of nearly all the
branches (2,120, out of 2,343) has been computerized. This has freed the branch
staff to devote more time to the borrowers rather than spend it in paper-work.
Branch staffs are provided with pre-printed repayment figures for each weekly
meeting. If every borrower pays according to the repayment schedule, the staff
has nothing to write on the document except for putting the signature. Only the
deviations are recorded. Paper work that remains to be done at the village
level is to enter figures in the borrowers' passbooks. Thirty six zones, out of
39, are connected with the head office, and with each other, through intra-net.
This has made data transfer and communications very easy.
● Policy for Opening
New Branches
New branches are required to fund themselves entirely
with the deposits they mobilize. No fund from head office or any other office
is lent to them. A new branch is expected to break-even within the first year
of its operation.
● Crossing the Poverty
Line
According to a recent internal survey, 64 per cent of
Grameen borrowers' families of Grameen borrowers have crossed the poverty line.
The remaining families are moving steadily towards the poverty line from below.
● Village Phone Program
Professor Yunus has long argued that information and
communications technology (ICT) has the potential to bring unprecedented
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 previously not exist.
3.4 Nature of the Organization
Grameen Bank is micro-credit lending organization. It is
an independent and separate bank under Bangladesh Bank. Although Grameen Bank
authority claims it is not a fully bank or NGO. It is different in
characteristics. Actually it is different from other banks and acts like NGO.
3.5 Number of the Employees
Numbers of Grameen Bank staffs is now 21,851. Among them
3,350 are female staffs.
Figure 01: Number of the employees
3.6
Number of Branches
At the end of 2013, there were 2,567 conveniently located
branches throughout Bangladesh.
3.7 Number of
Centers
At the end of 2013, there were 1, 43,057 conveniently
located centers throughout in Bangladesh.
3.8 Organizational Hierarchy
Table 01: Organizational Hierarchy
Chapter Four
Analysis and Finding
Microcredit programs extend small loans to very poor
people for self-employment projects that generate income, allowing them to care
for themselves and their families. For being a Member of the bank does not give
any guarantee to get loan. To get loan from Grameen Bank starts with a live and
interactive loan proposal making and disbursement process.
4.1 Basic Loan
The duration of Basic loan can be from 3 months to more
than three years. The prior approval of Coordination and operation department
is needed if it requires making repayment schedule for more than three years.
Every member will have a Loan ceiling. According to
method 01and 02 at the every time of taking loan full repayment or 45 weeks
later loan ceiling will be re fixed under some considerations.
Another Basic loan for special type of investment would
be given with current Basic loan. This type of basic loan will be said as
Special Investment Basic Loan. The current loan ceiling will not be applicable
for this type of loan.
Figure 04: Basic Loan activates
4.2 Housing Loan
Introduced in 1984, housing loan has become a very
popular program for the borrowers aspiring to build a decent but inexpensive
shelter over their heads. Its ownership infuses people with a sense of pride,
security and self-respect. The ceiling for a housing loan is BDT 15,000 for
construction of a simple tin-roof house. A family would qualify for this loan
if the land title is in wife's name. So far, more than 350,000 houses have been
built with this loan. The house, designed by a special group of local
architects, has many sleek features besides its low cost. These include clever
use of indigenous raw material, ventilation, efficient use of space, ability to
stand high wind velocity and aesthetic appearance. The engineers and economists
of the Bank could not believe themselves when their $ 300 house was awarded a
prestigious Architecture Award by the jury of the Swiss based Aga Khan
Foundation. In the glittering world of architecture, this award normally goes
to stunning multi-million dollar designs.
Figure 06:
Housing loan Activities
The average size of the loan is BDT 13,081 per borrower.
The interest rate is 8%, repayable over a period of 5 years. It brings the
total number of houses built with the housing loans to 679,577 since inception.
4.3 Struggling Beggar Loan
Grameen Bank has taken up a special program in 2002,
called Struggling Members Program exclusively for the beggars. This loan is
intended for individuals who do not currently have the ability to take a basic
loan. Begging is the last resort for survival for a poor person, unless he/she
turns into crime or other forms of illegal activities. Among the beggars there
are disabled, blind, and retarded people, as well as old people with ill
health.
Ø
Existing rules of Grameen Bank do not apply to
beggar members; they make own rules.
Ø
Beggar members are covered under life insurance
and loan insurance programmers without incurring any cost.
Ø
Groups and centers are being encouraged to
become patrons of this type of members.
As of 31st December, 2016 cumulative members
under this program reaches at 1, 10,144
out of them 1,42,087 are
women. By this time 2,568 branches
of Grameen Bank have implemented the program. So far BDT 182.99 million has been disbursed
and BDT 141.51 million has already been repaid. The struggle members saving
balance stood BDT 9.07.
4.4 Higher
Education Loan
This loan is offered for
the purpose of encouraging education among the villagers and also for
preventing the number of dropouts from such needy families. Thus it offers
scholarship, coaching and higher education loan for GB borrower's children
(student).So far 12,274 (Female) & 40,365 (male) members took the Higher
Education loans. A total Amount is 886.58 (Female) & 2,361.40 (Male) in
million BDT has been disbursed.
Figure 07: Higher Education Loan Activities
Main features:
1. This loan is
applicable only for GB borrowers’ children.
2. The borrower must be
regular in all respects.
3. The student will start
to repay the loan after one year of completion of the course.
4. The rate of interest of
education loan is basically 12% but from the date of completion of the course
the borrower will pay 5% service charge. The remaining amount of interest will
be paid as subsidy by GrameenKallyan (Welfare) a subsidiary organization of GB.
5. Loan can be taken to
study in Bachelor’s (Hon’s) and Master’s and its equivalent course.
6. At best two children of one borrower can take
this loan.
4.5 Approved Coursed
Grameen borrower’s children studying or who will take
admission in the mowing courses will be eligible for this loan.
1. MBBS course in Govt. Medical College and ED’s course
in Govt. Dental College.
2. Graduation course in Engineering in Govt. University and College.
3. Graduation (Hon’s), Master’s MBA and MBA course in Govt. University or
College.
4. Graduation & Master’s course in Agriculture in Govt. University or
College.
5. Graduation course in Marine, Textile and leather technology in Govt College
or Academy.
4.6 Loan Application
At best two children of a
borrower can take loan. The borrower and his/ her Children will jointly apply
in a prescribed form along with the following documents.
1. A certificate from the Head of the institute
department as a roof of
getting chance for admission.
2. A resolution from the
center of the borrower.
3. An undertaking by the
student.
4. A statement from branch
and zone regarding the relationship between applicant and borrower.
4.7 SWOT Analysis
SWOT analysis is the detailed study of an organization’s
exposure and potential in perspective of its strength, weakness, opportunity
and threat. This facilitates the organization to make their existing line of performance
and also foresee the future to improve their performance in comparison to their
competitors. As though this tool, an organization can also study its current
position, it can also be considered as an important tool for making changes in
the strategic management of the organization.
Strength:
Ø
Grameen Bank has already established a favorable
reputation amongst the people in the banking industry of the country. It is one
of the leading specialized banks in Bangladesh.
Ø
Grameen Bank has provided its banking service
with a top leadership and management position.
Ø
Grameen Bank has gained enough confidence of the
poorer section of the country. They feel quite comfortable to make any
transaction with the bank as it is fully Government owned specialized bank.
Ø
Grameen Bank lending rate is lower than any
other private commercial banks.
Ø
Most of the villagers and all are trust on
Grameen Banks Loan policy.
Ø
Its activities are user friendly that’s why
people are encouraged on it.
Weaknesses:
Ø
Grameen Bank has less manpower than needed. The
bank failed to provide a strong quality-recruitment policy in the lower and
some mid level position. The poor service quality has become a major problem
for the bank. The quality of the service at Grameen Bank is lower than the other
private commercial banks.
Ø
Profit making is not the prime objective of Grameen
Bank. So in some sector of Grameen Bank there is in slow growth.
Ø
The bank is not fully computerized so the
banking procedure is time consuming.
Ø
Some time Loan’s interest make burden on its
members.
Opportunities:
In order to reduce the business risk, Grameen Bank has to
expand their business portfolio. The management can consider options of
starting merchant banking or diversify into leasing and insurance sector.
Ø Grameen
Bank can improve the quality of service by introducing automation and online
banking.
Ø Opportunity
in retail banking lies in the fact that the country’s increased
population is gradually learning to adopt consumer finance. The bulk of our
population is lower class and middle class. Different types of retail lending
products have great appeal to this class. So a wide variety of retail lending
products has a very large and easily pregnable market.
Ø Members
can take Loan without securities.
Threats:
Ø Grameen
Bank performs commercial banking activities. So all sustaining multinational
banks and upcoming foreign and private banks pose significant threats to Grameen
Bank. If that happens the intensity of competition will rise further and banks
will have to develop strategies to compete againstthese local and foreign
banks.
Ø If Grameen
Bankcan not provide sufficient help and support to the poorer section than the
development of the country will not be possible.
Ø Grameen
Bank is financing in the poor people sector of the country. And we all know
that this sector is one of the most uncertain and risky sector to invest. These
uncertainties are considered as one of the major threats for Grameen Bank
Findings
Principal Branch has some active and well-organized human
resources who maintain the Daily activities more smoothly.
Ø Loan
transaction process is very lengthy.
Ø CIB
report is not available time to time from Bangladesh Bank.
Ø Facilitation
fee are not reasonable to the local intern.
Ø Give
well information of all the foreign intern.
Ø The
Credit department now performs relatively better than previous as they have
batter but precious information about this.
Ø Credit
department is also smooth in processing the necessary investment documents and
in sanctioning credit/investment to the customers.
Ø It
has a lot of clients and they are very faithful.
Ø Principal
branch has much space for performing banking activities and for relaxation of
the customer.
Ø They
have proper management services for the customer.
Ø Relationship
among the employees is good in all cases.
Ø Have
a great effort to make people self-sufficient and not go back in grip of
property.
Ø Introducing
and providing the poor people who have no assets, access to credit and banking
facilities.
Ø “The
sixteen decision” implemented by Grameen Bank can be said as the master plan,
well set agenda for a poverty free Bangladesh.
Ø Creating
a system of trust as an attempt to unite the poor.
Ø Women
are now taking part in decision making process which has crucial impact on
their lives, this has only possible because of newly introduced system by Grameen
Bank.
Chapter Five
Recommendations and Conclusion
5.1 Recommendations
Though Grameen Bank has introduced a whole new system
which has achieved the Nobel peace prize but eat many think has to do for more
betterment for the wider part of the society.
Ø Grameen
Bank has its entrenched root in village level what is needed is to make it
stronger and deep in the ground so why it become closer to the project poor.
Ø Need
for more efficient and faster services.
Ø Facilitation
fee should be reasonable.
Ø Need
regular training to the employees.
Ø The
project GS rate is high, need to low down payment rate and give the facility.
Ø Though
most of the members of Grameen Bank are women but in administrative level the
participation of women is less, it should be increased.
Ø Need
to keep more touches.
Ø Should
have more measure to respond contingences more quickly.
Ø The
members of the Grameen Bank should be acquainted with the right based
approaches so why they can easily approach to governmental agency to achieve
their right and services from them.
5.2
Conclusion
After all the discussion it can be said that Microfinance
is helping the poor. This people can be few through the world but third world
country is highly benefited through it. It removes hunger & want &
gives people a better way for living. Development is a time consuming process.
Microfinance has the capability to give parents a way to survive & let
her/his children to get better cloth & education & days can be much
better when this children will be a perfect person. It obviously something very
time consuming steps.
In our country Grameen Bank started its operation after
1974. When the country was full of ravage. Growth rate of population is very
high on the other side asset is very few. Most often there is no consistency
between the planning of asset & reality. As a result we cannot achieve
success. To the people whom GB is serving is doing very well but it is too few
than our total need.
Grameen Bank has earned the reputation of top banking
operation in Bangladesh. This organization is much more structured compared to
any other bank operating in Bangladesh. It is relentless in pursuit of business
innovation and improvement. It has a reputation as a leader in financing manufacturing
sector. With its vast operation both regarding its technology, wide range
of products, versatile services, strong financial base, invaluable customer’s
satisfaction, and profound reputation it has grown into a unique stature which
is now subject to every ones envy and became pride to its employee.
With a bulk of qualified and
experienced human resource, Grameen Bank can exploit any opportunity in the
banking sector. It is pioneer in introducing many new products and services in
the banking sector of the country. Moreover, in the retail-banking sector, it
is unmatched with any other banks because of its wide spread branch networking
through the country.
Borrowers are very satisfied to
them. Not all are illiterate, many of them are very educated, have strong sense
to the reality & have the idea about the things which happening to them.
They encourage the system because it benefiting them well.
Communication is a greater fact
that rise & reduce product or service charge. Total economic infrastructure
of our country is not good. Till in many place there is no direct
communicational way. Providing service in such area is not easy. It required
both financial & physical effort. It seems to me that, Government need to
provide better communication system in all the part of Bangladesh. If the
communication system developed & somehow the monetary value of the country
increases may be in such day GB can be forced to reduce their service cost too.
References
Books and Reference:
·
Bateman, Milford (2010). Why
Doesn't Microfinance Work?. Zed Books.
·
Anand Giridharas; Keith Bradsher (13
October 2006). "Microloan Pioneer and His Bank Win
Nobel Peace Prize". New York Times. Retrieved 13
October 2006.
·
Women And Microcredit
In Rural Bangladesh: An Anthropological Study Of Grameen Bank Lending by Aminur
Rahman
·
Prospectus of Grameen Bank.
·
Project report of Grameen Bank.
·
Annual report of Grameen Bank (year ended 2016)
·
Annual report of Grameen Bank (year ended 2012)
·
Annual report of Grameen Bank (year ended 2011)
