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.
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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.