Grameen (Micro Finance)

7/31/2019 Grameen (Micro Finance)

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GRAMEEN BANK

MICRO FINANCE

PRESENTED BYSAMIA MOHAMMED UMER


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MICRO FINANCE-CREDIT

Is the most common form of Microfinance

It means the provision of small loans to

entrepreneurs who are too poor to qualify for

conventional bank loans.


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It presents a series ofexciting possibilities for:

Extending markets,

reducing poverty

and

Fostering social

change.


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FEATURES OF MICRO CREDIT

The landless

Having less than 0.4 acres of land

No collateral

No guarantee

Customers are never taken to court for default


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PROCESS OF MICRO LOAN

DISTRIBUTION A micro credit program

gives small loans to the

poor so that they canprocure whatever they

need to start a small

local business of their

choice


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DISTRIBUTION A micro loan of Rs.5000

- 20000 at 1 or 1.5%

interest per month, canempower people to

start their own business


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PROCESS OF MICRO LOAN DISTRIBUTION

By that money they can

start business of:

A Kirana Shop

A Bangle shop

Buy a cow or buffalo tosell milk

Candle making

Small Garment factory

Fruit or vegetable shop


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DISTRIBUTION In the absence of

collateral, the loans are

made to groups of five,mostly women, who

guarantee each others'

loans.

Called Joint liabilityGroup (JLG)


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DISTRIBUTION If a woman wants to

receive a loan and if her

idea for a business isaccepted, she is

encouraged to find four

other women and form

a group.


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DISTRIBUTION Then, the first two women

are given loans and theothers are encouraged to

help them make theirenterprise a success. Afterabout 6 weeks, if the firsttwo are making theirpayments on time, the next

two women get their loansand six weeks later the lastone.


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DISTRIBUTION All persons who have

paid back a first loan,

are automaticallyeligible for a second

loan and eventually a

third so their businesses

can grow


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DISTRIBUTION At the same time from

the interest, the loan

fund is growing, thoughslowly, and loans are

available to more

persons.


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DISTRIBUTION If one does not pay

back one's loan, no one

in the group will receivea second loan


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DISTRIBUTION To guard against

emergencies, such as one's

cow dying and not being

able to repay the loan, anemergency fund is set up at

the time of the first loan.

This simply means that a

few coins, perhaps anadditional


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OWNERSHIP

Borrowers (94%) government (6%)

LOAN RECOVERY RATE

99.01%

In 1996, Grameens repayment rate of 97% was

considered comparable to Chase Manhattans rate.

Borrowers

96% women

5.58 million (to date)


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SOURCE OF FUNDS

100% from borrowers deposits

No Donor Money, No Loans (since 95)

PROFITS

Made profit every year except 83, 91 and 92.

Audited by two internationally reputed audit

firms.

Documents

Grameen (Micro Finance)