The Evolution of Grameen Bank

We were asked to watch a video before coming to the class. Initially I hesitated because the video run time was around an hour. Inquisitiveness made me click the play button, but later it came to my realization that I would have missed an important learning if I hadn't watched this. I would like to share my understandings from the video.

Microfinance is a form of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

The modern use of the expression "micro-financing" has roots in the 1970s when organizations, such as Grameen Bank of Bangladesh with the micro-finance pioneer Muhammud Yunus, were starting and shaping the modern industry of micro-financing.

In his speech he explained how he developed the micro-finance model in the poor villages of Bangladesh which eventually got replicated all over the world. He set up a system of Social business whose main purpose was not profit maximization but serving the most pressing problems of the society.He explained , how simple non collateral based loans can transform the lives of poor. He visualized " we have created a society that does not allow opportunities for those poor people to take care of themselves because we have denied them those opportunities"

In class, We had a discussion on how Traditional banks are different from grameen banks. Illustrated by tabular column below.

I am embedding the video we were asked see below. Watch it; it's worth your time. 

he other takeaway from this class for me was the idea of how the organizational culture actually shapes and is shaped by the goals and objectives of any organization. The culture at Grameen Bank is to find ways to eradicate poverty. The Managing Director of the bank is not asked, “Why are Profits down?”. Instead he is asked, “How many people have you taken out of poverty today. It is precisely this culture that has allowed the Grameen Bank to achieve so much.