An independent development bank known as the “Bank of the Poor”, founded in 1983 by Bangladeshi economist Muhammad Yunus, with the aim of lending to the poor and developing rural areas in Bangladesh, and its activities expanded to many countries.
The bank, which initially faced criticism from some radical and leftist movements, provides small loans without the need for collateral, with a focus on empowering women and providing job and educational opportunities.
Establishment of the bank
In 1976, economist Muhammad Yunus obtained a loan from the government through Janata Bank, and invested it in lending to the poor in the village of Jobra in Chattogram district. He believed in the need to provide loans to the poor in exchange for a long repayment period, and worked to develop the principles of the bank based on his research and experience during his research project at the University of Chittagong in Bangladesh.
Yunus began his pilot project by lending 42 village women $27 each, and in 1983 the project was transformed into the Grameen Bank (Grameen in the local language of Bangladesh means village or countryside) and was nicknamed the “Bank of the Poor.”
During the founding period, Younis and his colleagues faced a harsh campaign from some radical and leftist movements, which fought the idea of borrowing from the bank in the first place, but that did not affect his idea and he insisted on implementing it.
By 2024, Grameen Bank has opened 40 offices in different cities of Bangladesh, in addition to auditing offices, and has opened more than two thousand branches, and is present in 94% of villages in Bangladesh.
As of June 2024, Grameen Bank had 22,895 employees.
Milestones in the history of the bank
The project was officially licensed as an independent bank by government decree on October 2, 1983, and two bankers at a community development bank in Chicago, USA, helped Muhammad Yunus establish the bank under a grant from the Ford Foundation.
The bank suffered loan defaults following the 1998 floods in Bangladesh, but recovered over the years and by 2005 had lent more than $4.7 billion to the poor.
By late 2008, the bank had lent more than $4.6 billion to the poor in Bangladesh.
As of April 2024, the total amount lent since the bank’s inception amounted to more than US$38 billion, provided to more than 10 million people, 97% of whom are females.
With climate change projects around the world, the Bank has implemented a tree planting program, and has successfully planted more than 206 million trees by September 2023.
The bank’s business has expanded outside Bangladesh, with its activities extending to many countries, including Malaysia, the Philippines, Nepal, India, Vietnam, and the United States of America, where the bank has 19 branches in 11 states and provides services to about 100,000 women and poor Americans.
Bank’s goals and vision
Grameen Bank aims to alleviate poverty and provide long-term micro-loans to the marginalized poor in Bangladesh. The bank does not require collateral for loans.
The bank’s founders built their vision on the premise that even the poorest of the poor can manage and grow their financial affairs if they are given the right conditions.
The bank also contributes to expanding the scope of banking facilities, eliminating the exploitation of the poor by money lenders, creating self-employment opportunities for the unemployed, and providing education loans and scholarships.
Bank Presidency
- Chairman of the Bank Muhammad Yunus (1982 – 2011).
- Chairman Iqbal Mahmood (1982-1989).
- Muhammad Qaisar Hussain (1989-1990).
- Harun Rashid (1990-1991).
- Akbar Ali Khan (1991 – 1996).
- Rahman Sobhan (1996 – 2002).
- Tabarak Hussein (2002 – 2010).
- Khandaker Muzammil Haque (2011 – 2019).
- Akam Saif Al Majid (2020).
Awards won by the bank
Grameen Bank (Bank for the Poor) has won a number of awards, including the King Baudouin Prize for International Development in 1992 in Belgium for the bank’s recognition of the role of women in the development process and the creation of a financial credit system that contributes to improving the social and material conditions of women and their families in Bangladesh.
He was also awarded the Gandhi Peace Prize in 2000 by the Indian government, and the Tun Abdul Razak Award in Malaysia for his role in lending to the poor and changing the lives of thousands of people.
In October 2006, Grameen Bank was awarded the Nobel Peace Prize for its efforts to create economic and social development for the poor.
The Bank has received a number of other local and international awards for its contribution to rural development through poverty alleviation and promotion of social development in Bangladesh.
