Grameen (Micro Finance)
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Transcript of Grameen (Micro Finance)
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7/31/2019 Grameen (Micro Finance)
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GRAMEEN BANK
MICRO FINANCE
PRESENTED BYSAMIA MOHAMMED UMER
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MICRO FINANCE-CREDIT
Is the most common form of Microfinance
It means the provision of small loans to
entrepreneurs who are too poor to qualify for
conventional bank loans.
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It presents a series ofexciting possibilities for:
Extending markets,
reducing poverty
and
Fostering social
change.
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FEATURES OF MICRO CREDIT
The landless
Having less than 0.4 acres of land
No collateral
No guarantee
Customers are never taken to court for default
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PROCESS OF MICRO LOAN
DISTRIBUTION A micro credit program
gives small loans to the
poor so that they canprocure whatever they
need to start a small
local business of their
choice
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PROCESS OF MICRO LOAN
DISTRIBUTION A micro loan of Rs.5000
- 20000 at 1 or 1.5%
interest per month, canempower people to
start their own business
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PROCESS OF MICRO LOAN DISTRIBUTION
By that money they can
start business of:
A Kirana Shop
A Bangle shop
Buy a cow or buffalo tosell milk
Candle making
Small Garment factory
Fruit or vegetable shop
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PROCESS OF MICRO LOAN
DISTRIBUTION In the absence of
collateral, the loans are
made to groups of five,mostly women, who
guarantee each others'
loans.
Called Joint liabilityGroup (JLG)
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PROCESS OF MICRO LOAN
DISTRIBUTION If a woman wants to
receive a loan and if her
idea for a business isaccepted, she is
encouraged to find four
other women and form
a group.
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PROCESS OF MICRO LOAN
DISTRIBUTION Then, the first two women
are given loans and theothers are encouraged to
help them make theirenterprise a success. Afterabout 6 weeks, if the firsttwo are making theirpayments on time, the next
two women get their loansand six weeks later the lastone.
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PROCESS OF MICRO LOAN
DISTRIBUTION All persons who have
paid back a first loan,
are automaticallyeligible for a second
loan and eventually a
third so their businesses
can grow
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PROCESS OF MICRO LOAN
DISTRIBUTION At the same time from
the interest, the loan
fund is growing, thoughslowly, and loans are
available to more
persons.
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PROCESS OF MICRO LOAN
DISTRIBUTION If one does not pay
back one's loan, no one
in the group will receivea second loan
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PROCESS OF MICRO LOAN
DISTRIBUTION To guard against
emergencies, such as one's
cow dying and not being
able to repay the loan, anemergency fund is set up at
the time of the first loan.
This simply means that a
few coins, perhaps anadditional
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OWNERSHIP
Borrowers (94%) government (6%)
LOAN RECOVERY RATE
99.01%
In 1996, Grameens repayment rate of 97% was
considered comparable to Chase Manhattans rate.
Borrowers
96% women
5.58 million (to date)
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SOURCE OF FUNDS
100% from borrowers deposits
No Donor Money, No Loans (since 95)
PROFITS
Made profit every year except 83, 91 and 92.
Audited by two internationally reputed audit
firms.