With the quest to ensure better living for his hometown, Muhammad Yunus founded the now successful financial institution The Grameen Bank in 1977. Derived from the Bangala word for “Village” Grammen bank came into existence when Yunus had come to believe that the widespread availability of credit on reasonable terms is the key to solving the problems of rural underdevelopment.
The absence of credit facility is the sole reason villagers are forced to rely on moneylenders charging high interest, which ultimately lures them into the never-ending pit of debt and poverty. The bank first began as an experiment operating from special windows in the conventional national banks, and in 1983, became an independent entity. The unique principle of Grameen Bank is quite remarkable – Providing micro-loans for small-business enterprises such as peddling or home-based bamboo weaving.
Though the entire concept and ideals were mocked by other traditional banks, who laid their bets on the Bank’s customer to flee after taking their loans, Grameen Bank has today more than 1,050 branch offices serving more than two million clients and the biggest highlight being; 97% of the loans are repaid!
The success is majorly credited to the ability of the bank to create an opportunity for its clients to become self-sufficient entrepreneurs.