  
The Grameen Bank is the world's largest bank dedicated
to serving poor villagers. Today, the Grameen Bank lends money
to more than two million landless villagers in Bangladesh --
94 percent of whom are women. Since its inception in 1978, the
bank has extended loans totaling close to $2 billion and maintained
a repayment rate of 97 percent.One of the ways the bank maintains
high loan repayment and ensures that its borrowers succeed in
their businesses is through peer-group lending. All borrowers
must form groups of five and agree to assume collective responsibility
for each other's loans. The peer support is vital to the bank's
credit system. In fact, it is the group -- not the bank -- that
evaluates and authorizes loan proposals.
Muhammad Yunus, founder of the
Grameen Bank, and his staff found that by providing home-based,
self-employment options to women, they improved the lives of
poor children dramatically. The staff observed that money entering
a poor household through the mother, by contrast to the father,
seemed to have a more profound impact on the family as a whole.
"When a woman brings in income, the immediate beneficiaries
are her children," Yunus said. Women who are members of
the Grameen Bank enjoy greater participation in economic decision-making
within their families; they are able to acquire valuable productive
assets; they tend to educate their daughters at higher rates
than non-members; and they enjoy better access to health services.
-- Source: Oxfam America Viewpoint newsletter, Winter 1996-97 Grameen
Bank of Bangladesh.
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