Page 9 - Azerbaijan State University of Economics

Muhammad Yunus: Can wealth concentration be stopped?

strong support from some board members of Bangladesh Bank. In 1983 we became
a formal bank.

Everything They Do, We Do the Opposite
What we created was not just another bank. It turned out to be an anti- thesis
of a conventional bank. Everything a conventional bank did we started doing the
opposite in Grameen Bank. Conventional banks love to operate where businesses
and rich people locate their offices. As a result, they work in the cities. Grameen
Bank (GB) works in the villages.
Even after 40 years GB does not have any branch in any city or municipal
area. Conventional banks are owned by rich people, GB is owned by poor women.
Poor women sit in its board. Conventional banks serve mostly men, GB focuses on
women. Conventional banks believe that poor are not creditworthy. GB established
for the first time in history that the poor people, more so poor women, are
creditworthy in any formal banking sense. Grameen America has shown that even in
the USA poor women can demonstrate amazing ability to handle bank credit to
transform their lives. Grameen America has 18 branches in 9 cities in the USA with
62,000 borrowers, all of whom are women. It has given out a cumulative amount of
$ 380 million with average start up loan of $ 1,000 and repayment rate of 99.9%.
Conventional banks operate on the basis of collateral, GB is collateral free.
Therefore, it is lawyer -free. We have developed a banking system based on trust. In
GB, borrowers don't come to the bank, the bank goes to borrowers wherever they
live. GB created pension fund to make sure that borrowers can take care of
themselves during their old age. GB offers health insurance, loans to beggars,
student loans for the children of GB families, loans for sanitary latrine, tube wells.
GB partially covers the funeral cost of the borrowers, loans are written off when a
borrower dies. In GB total interest on loan cannot exceed total principal no matter
how long it takes to repay.
By July, 2016 cumulative disbursement of loans of the bank came to Tk
1,323,353.74 Million (USD$ 19,471.05 Million) and total loan outstanding stood at
Tk.109,389.02 Million (USD$ 1,395.27 Million). The balance in the savings account
of borrowers stood at Tk. 117,415.77 Million (USD$ 1,497.65 Million). This means
borrowers now have more money in their saving accounts than their total loans
outstanding. One can say, in reality, they are the lenders to the bank, rather than
borrowers of the bank.
In recent years the World Bank, IMF, UN, and many bilateral donors are
promoting inclusive finance. It is mostly manifested in encouraging conventional
banks to take steps to provide limited financial services to the poor. If anybody aims
at inclusiveness in banking with any seriousness, definitely it can't be achieved

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