Grameen Bank's Mission and Products

Grameen Bank claims to be different from conventional banks in that it provides loans to the poor, who are otherwise seen as not credit-worthy.  It is believed that those who are poverty stricken around the world have vast untapped potentional for innovation and productivity if only given the resources to work.  And this entrepreneurship can lift a person, family and society up from poverty and into a self-sufficient, productive work-force.  Additionally, Grameen promotes establishing women as the financial hub of society.  According to Grameen, women have been proven to be the more responsible members of society and, therefore, a greater tool for development.  The following are quick notes of Grameen's products and conditions.

 -95% borrower owned ; 5% government

-all involved members based on need/incentive

-Loans are usually 1yr term loans

Grameen Products:

I: Basic Loan

-10K to 15K taka per new borrower

-granted for any activity that generates income

-interest rate: 20% on a declining basis

equivilent to 10% if installments are paid on time – weekly payment installment

a. Micro-Enterprise Loan: up to 300K taka (after 3 years of membership )

II: Flexible Loan

-granted while in probation for non payment: flexible to basic

-cannot borrow more until flexible loan is paid.

III: Housing Loan

-granted upon 3yrs of successful basic loan

-interest rate: 8% on declining basis

IV: Higher Education Loan

-granted to children of borrowers

-after 12^th grade

-interest rate: 5%: no interest during current enrollment plus one year after/ monthly payment plan.

V: Struggling Member Loan:

-social objective over income generation

-up to 5K taka with no interest charge

Saving Products

-claims to have higher interest than other bd banks

-savings are from borrowers and non-borrowers

I: Personal Savings

-Open to all nationals; Deposit and withdrawl at anytime

-8.5 % interest

-every borrower has savings (with a min of 10 to 20 taka deposit weekly required)

II: Grameen Pension Scheme

-Borrower and employee / monthly deposit

-5yr scheme (at 10% interest)

-10yr scheme (at 12% interest)

Less than one year (no interest); <3yr (8% interst); 3-5yrs(10% interest)

Compounded interest (this appears to be a loosing venture for the bank)

III: Fixed Deposit

-open to all

-1yr scheme (8.75% interst)

-2yr scheme (9.25% interest)

-3yr scheme (9.5% interest)

IV: Double in 7yr

-open to all

-10.4% interst or double in 7 yrs

V: Monthly Profit Scheme

-open

-fixed

-1000K taka will receive 850 taka profit

VI: Loan Insurance Savings

-Deposit, with no interest paid

-purpose: w/3% from loan amount and additional 3% for husband, if death occurs, 100% of loan is paid by fund.

Defaulted Loans:

-written off loans go to memorandum by provision with collection attempt : half to provision / half to income

Provision: after 10 weeks of non payment, 100% provision