One of the leading banks in Bangladesh

Through the 1980s Grameen's aggressive expansion program saw them adding approximately 100 new branches every year. These were of very high quality as six years of experimentation in Jobra and Tangail had taught them a great deal and allowed them to refine their methodology. Staff too was growing exponentially.

National dominance and borrowers - mainly poor women - own Grameen Bank

As of October 2011, Grameen Bank has over 8 million borrowers who own 94% of the total equity of the bank, and the remaining 6% is owned by the Government of Bangladesh. The number of borrowers have doubled from 2003 to 2007 and 97% of these borrowers are women.

The number of villages where this scheme takes place has doubled too during this period. As of October 2011, the Bank has 2,565 branches providing services in 81,379 villages, covering more than 97% of the total villages in Bangladesh.

Since its official beginning in 1983, the bank has distributed over 300 billion taka (£4 billion) in loans. Out of this, over 290 billion taka (£3.5 billion) has been repaid. In 2007 it was disbursing over 5 billion taka (£50 million) loan per month. The bank claims a loan recovery rate of over 98%, up from the 95% recovery rate claimed in 1998.

Organisational structure

When Grameen Bank was officially formed in October 1983 via the Grameen Bank Ordinance it was stipulated a board of governors would be formed composing of the chairman, the managing director, and 9 other members - 5 appointed by the government and 4 appointed by the borrower-shareholders. The managing director, then occupied by Prof. Yunus, would be the chief executive of the bank.

The 1986 amendment of the ordinance increased the board membership number from 9 to 13, of which 9 would be borrower-shareholders and 4 would be appointed by government. This organisational structure is still the same today.

The board members are responsible for approving the bank policies and serving as the link between the bank, the Ministry of Finance, and other government organisations.

Method of operation

The branch office is the lowest administrative unit of the Grameen Bank and is considered the profit-responsibility unit. For accounting purposes, the bank charges 10% interest on the funds it lends to branch offices for disbursement to the borrowers at an annual interest of 16%. Hence a branch office is encouraged to keep it cost of operation at or below 6% of the amount of outstanding loans. The amount of profit earned is an important criterion for evaluating the performance of the branch staff.

About 10-15 branch offices are supervised by an area office, which is usually located in a small town. The area manager is the final authority for approval of loans and supervises loan utilization and recovery with the help of a number of program officers. The area offices are accountable to the zone office located in the district headquarters. The zone manager is responsible for handling accounts and managing funds. The zone office also takes responsibility for monitoring, evaluating, and supervising the social development programs. A zone manager works in close contact with the area managers, who attend management meetings once or twice a month in the zone office. The head office in Dhaka maintains liaison with the government and provides feedback to lower-level offices. It is also responsible for supervising the training of bank staff and for research and development activities.

Initially there were only the head office and the branch offices. With the increase in the number of branch offices and expansion of the bank in a number of districts, the zone offices were created. Area offices were created when the number of branch offices grew beyond the capacity of a zone office to supervise. As the number of branches increases, the zone grows horizontally, and when it reaches a critical size a new zone is created.

With rapid expansion of the bank, management functions and decision making powers are gradually delegated to lower levels.


Formulation and change of policies are arrived at by a consensual approach through meetings of the managing director with the heads of various departments located in the head office and with zone managers. The MD meets with zone managers twice a year to exchange experiences and discuss issues for further development of the bank. The meetings may continue for up to 3 days. The branch managers are encouraged to try their own ideas in the field, and if successful, to pass them on to higher levels for testing and development and ultimately for replication in other areas. Innovative ideas are also taken from the borrowers when their representatives attend workshops for an exchange of views among themselves and with higher bank officials.

A substantial part of the managing director's time is spent travelling in the field to maintain contact with borrowers and with staff of the branch offices.


Staff empowerment

With the rapid expansion of its operations, the number of Grameen Bank employees increased from 2,777 to 10,531 during 1985-92, an increase of nearly 294%. Today, Grameen has over 23,000 employees. Workers of Grameen work and stay in distant rural villages. This has been the culture of Grameen since its foundation. Around 80% of its employees are located at the branch-level. The other 20% is split between the head office in Dhaka and the regional offices throughout Bangladesh. This means that Grameen Bank has a pyramidal structure. Each branch has an average of ten employees.

Because of the physical and social demand of the role, majority of Grameen staff tend to be young. Once their training is over, they become in charge of a branch of their own. The employee will be responsible not only for selecting the location of the future office but also for writing reports on the local historical, cultural and socio-economic circumstances, as well as assessments of the level of poverty of that particular area.

Instead of training the young workers how to manage the poor, Grameen gives them the ability to appreciate the unexplored potential of the destitute.

Instead of feeding their young employees large amounts of reading material, Grameen expects them to learn about life from the villagers. They are required to develop a critical mind and to find ways to improve and integrate themselves. A dialectical approach must also be adopted to stop the young employees from being submerged in the culture of silence, and to emerge as conscious makers of their own culture. Grameen, therefore, encourages spirited debates since innovation needs to be incubated and developed through tolerance and curiosity.


To succeed in Bangladesh, in many ways we have had to struggle against our culture.

Prof. Yunus,

Solidarity lending based on Sixteen (16) Decisions

Beginning in 1984 Grameen Bank introduced a social development program called "Sixteen Decisions" which was to imbue members with discipline, unity, and hard work and to improve their living standard. These set of values was incorporated in each of its branch where each borrower recites them and promises to follow them. These Sixteen Decisions include certain codes of conduct that members are encouraged to follow in their daily life. It encourages borrowers to adopt good positive social habits such as educating their children by sending them to school thereby helping to bring about social change, and educate the next generation.

Physical training and parades are held in weekly center meetings for both men and women, and the "Sixteen Decisions" are chanted as slogans. The observance of these decisions - including participation in physical training and parades - is not compulsory, but in the field their observance has become a requirement for receiving a loan.

16 Decisions of Grameen:

  1. We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard work – in all walks of our lives.
  2. Prosperity we shall bring to our families.
  3. We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.
  4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
  5. During the plantation seasons, we shall plant as many seedlings as possible.
  6. We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.
  7. We shall educate our children and ensure that they can earn to pay for their education.
  8. We shall always keep our children and the environment clean.
  9. We shall build and use pit-latrines.
  10. We shall drink water from tubewells. If it is not available, we shall boil water or use alum.
  11. We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughter's wedding. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.
  12. We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.
  13. We shall collectively undertake bigger investments for higher incomes.
  14. We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.
  15. If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline.
  16. We shall take part in all social activities collectively.

Beggers as members

Among the beggars there are disabled, blind, and retarded people, as well as old people with ill health. Grameen Bank has taken up a special programme in 2002, called Struggling Members Programme exclusively for the beggars. Over 111,597 beggars have joined the programme. Total amount disbursed stands today at Tk. 157.84 million. Of this amount of Tk. 125.15 million (79% of the amount disbursed) has already been paid off.

19,623 beggars have left begging and are making a living as door-to-door sales persons. Among them 9,710 beggars have joined Grameen Bank groups as main-stream borrowers.

Beggers members have voluntarily opened their personal savings accounts. Cumulative deposit in these savings accounts amounts to BDT 21.34 million; present balance stands at BDT 8.24 million.

Basic features of the programme are :

Existing rules of Grameen Bank do not apply to beggar members; they make up their own rules.

All loans are interest-free. Loans can be for very long term, to make repayment instalments very small. For example, for a loan to buy a quilt or a mosquito-net, or an umbrella, many borrowers are paying Tk 2.00 (3.4 cents US) per week.

Beggar members are covered under life insurance and loan insurance programmes without paying any cost

Groups and centres are encouraged to become patrons of the beggar members.

Each member receives an identity badge with Grameen Bank logo. She can display this as she goes about her daily life, to let everybody know that she is a Grameen Bank member and this national institution stands behind her.

Members are not required to give up begging, but are encouraged to take up an additional income-generating activity like selling popular consumer items door to door, or at the place of begging.

Objective of the programme is to provide financial services to the beggars to help them find a dignified livelihood, send their children to school and graduate into becoming regular Grameen Bank members. We wish to make sure that no one in the Grameen Bank villages has to beg for survival.

Grameen Model replicated throughout the world

Grameen methods are applied in projects in more than 100 countries, including the US, Canada, France, The Netherlands and Norway.

From Dr. Yunus' personal loan of small amounts of money to destitute basketweavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through microlending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide.

Nobel Prize Committee

Myths regarding poverty & poor people like "bonsai tree"

Prof. Muhammad Yunus's repeated trips to the villages and collaboration with the poor taught him an entirely new economics which led him to discover the essential to establishing the Grameen Bank. He learnt to view problems from their perspective.

Sadly, he also discovered that there are widespread and highly ingrained stereotypes about the poorest of the poor which forces them to be trapped in their dire, man-made situation.

A list of the cliches and myths regarding poor which Dr Muhammad Yunus has heard and seen over the years:

  • The poor need to be trained before they can undertake any income-generating activity
  • Credit alone is useless, it must be packaged with training, marketing, transportation facilities, technology, education
  • The poor cannot save
  • The poor are in the habit of consuming anything that they can put their hands on because their consumption needs are so pressing
  • The poor cannot work together
  • Chronic poverty has a crippling effect on the mind and on the aspirations of the poor. It is like a bird who having spent his life in a cage, once taken out will want to fly away
  • Poor women have no skills, so it is uselss to talk about programmes for them
  • The poor are too hungry and desperate to make rational judgements
  • The poor have a very narrow view of life, and are not interested in anything that will change their lives
  • The influence of religion and custom is so strong on the poor (particularly on women) that they cannot move an inch in any direction
  • The rural power structure is too powerful and too entrenched to allow such a credit programme to succeed
  • Credit for the poor is anti-revolutionary. It kills the revolutionary spirit in the poor, so they are bribed into accepting the status quo
  • Credit is clever way of mobilising the poor to gang up against the rich and destroy the existing social order
  • It will be impossible for the women to keep their borrowings or their income to themselves, husbands will torture them to death, if need be, to grab this cash
  • The poor enjoy serving their masters rather than taking care of themselves
  • Credit for the poor is counter-productive. It will impose the burden of loans on the slender shoulders of the poor who cannot repay it. So he or she will become poorer by trying to (or being forced to) repay the loan
  • By encouraging the poor to take up independent professions, a shortage will be created in the supply of wage labour. As a result wage rates will shoot up, this will increase the cost of production, create inflation and adversely affect agricultural productivity
  • By extending credit to women, the traditional role of the woman in the family will be adversely affected as will her relations with her husband
  • Credit may help temporarily, but it won't do anything in the long run, it won't achieve an equitable restructuring of society

Give poor people the freedom to shine

To me poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flower-pot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you planted, only the soil-base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on. All it needs to get the poor people out of poverty for us to create an enabling environment for them.

Once the poor can unleash their energy and creativity, poverty will disappear very quickly.

Let us join hands to give every human being a fair chance to unleash their energy and creativity.

Dr Yunus during his Nobel Lecture