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Grameen Bank's Impact on Poverty Reduction

The document summarizes findings, recommendations, and conclusions about Grameen Bank's Aukpara branch. Key findings include that the branch improved women's empowerment and economic status. It also increased savings. Most borrowers took loans for small businesses. Recommendations include increasing loan sizes, lowering interest rates, and providing entrepreneurship training. The conclusion states that Grameen Bank lends without collateral, builds trust, and helps borrowers start businesses, reducing poverty. The Aukpara branch successfully plays a role in local poverty reduction.

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45 views4 pages

Grameen Bank's Impact on Poverty Reduction

The document summarizes findings, recommendations, and conclusions about Grameen Bank's Aukpara branch. Key findings include that the branch improved women's empowerment and economic status. It also increased savings. Most borrowers took loans for small businesses. Recommendations include increasing loan sizes, lowering interest rates, and providing entrepreneurship training. The conclusion states that Grameen Bank lends without collateral, builds trust, and helps borrowers start businesses, reducing poverty. The Aukpara branch successfully plays a role in local poverty reduction.

Uploaded by

ipshahed
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Chapter: 04

Finding, Recommendation &


Conclusion
4.1Findings:
The specific finding of the study are given below-

The Grameen Bank, Aukpara Branch, member are quite improves their women
empowerment, economic empowerment and upgrade social life style.
GB Microcredit provides loan for income generating activities but it does not fulfill the
initial capital requirement.
Microcredit program me increases savings amongst the borrowers also savings money
can be helpful to borrowers for their future.
Most of the Borrower of GB, Aukpara Branch , then found that, they have place and
member are taking Basic loan for Grocery shop, Small Business, Flowers Garden, buy
rickshaw, Etc.

Should have more measure to respond contingences more quickly.


The members of the Grameen bank should be acquainted with the right based approaches
so why they can easily approach to governmental agency to achieve their right and
services from

Recommendations:
Here are some recommendations for effectively work out of Grameen Bank for poverty reduction
of Aukpara Branch:

Grameen Bank Aukpara Branch should raise the loan size in order to cater the
requirements of entrepreneurs. The branch should measure their needs under specific
projects.
Need to keep more touches.

Besides, the rate of interest should decrease in descent level and the formalities should be
easier to understand to entrepreneurs.
Need for more efficient and faster services.

Loan recovery should be in time. Funding organization is suggested to design a unified


system for their recovery programs so that the borrower can easily pay their installment
with the interest amount out of return from investment borrow.
The intensive entrepreneurship development training should provide for potential
entrepreneurs come out and act practically for the socio-economic development of these
area.
Facilitation fee should be reasonable.
Need regular training to the employees.

To improve the skills of women entrepreneurs, management development training


program on how to start, run, how to lead and manage small enterprise or how to business
plan identify different step of formulating a plan etc. again effectiveness of management
development programs depends on fundamental education of women entrepreneurs.

GB should change their policy regarding weekly installment. Most of the loan suggested
that weekly repayment should start at least 4 weeks after its disbursement.

In order to alleviate the poverty, GB should give more emphasis on the selected areas. In
that case, their programs will be more sustainable and beneficial as well for the
borrowers.

Conclusion: Banking for the poor - Grameen Bank is the outcome of an Idea from
Muhammad Yunus translated into action. It is the best example of an effective Marketing
strategy wherein the focus is not on the solution but rather on the problem. Grameen Bank has
changed the conventional way of credit lending practice( normally called the 3Cs of credit) as it
lends without the borrower submitting a collateral. The whole model of Grameen bank is all
about mutual trust, accountability, participation and creativity. The target customer for the
Grameen Bank is one who satisfies the following characteristics : They have no asset ,they have
nothing to offer as collateral ,they have no business experiences ,they have no training ,they have
no credit history and they have no education. Grameen banks not only provides credit to its
borrowers but also helps them grow their small business and helps them learn the basic
principles of healthy living and grows alongwith the customers. This helps in the creation of
loyal customers to the bank. There is a close relationship between micro credit program of
Grameen Bank and poverty reduction. Most of the countries are implementing micro credit
project and program as a measure of poverty reduction. This would help to achieve community
development. The respective countries have achieved a great deal of success in utilizing micro
credit as a tool for poverty reduction. Grameen Bank has some certain limitation such as lack of
funds, lack of initiatives in creating financial institution, absence of legal regulatory framework
for pertaining micro credit institution, absence o regulatory frame work, lack of conceptual
clarity. Government always tries to strongly handle and overcome to these problems. Because
most of the developing countries like Bangladesh, micro credit is mostly necessary and important
tool for poverty reduction and to create for self employment. The government is playing a major
role in development of the micro credit sector by way of operating its own micro credit program,
creating micro credit support institution, encouraging bank to undertake micro credit scheme.

Grameen Technology is now well known all over the world for its effectiveness in reaching the
poor and serving them with credit. More than 250 microfinance projects in 58 countries of the
world, irrespective of their level of development, are now following GB approach in their efforts
poverty reduction.
Aukpara, Savar Branch is the more successful Branch of Grameen Bank. And Aukpara Branch is
playing a vital role of poverty reduction in that area.

Common questions

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The recommendations to start loan repayments at least four weeks after disbursement are aimed at providing borrowers with adequate time to initiate and generate returns from their income-generating activities. This time cushion would allow borrowers to use the initial capital more effectively and begin repayments only once they have potential revenue, thereby improving the effectiveness and sustainability of the microfinance program .

Regular training for Grameen Bank employees ensures that they are equipped with the latest skills and knowledge necessary to efficiently manage microcredit programs. For women entrepreneurs, training programs are crucial for building their capabilities in managing small enterprises. This enhances their effectiveness in utilizing loans and contributes to the overall efficiency and impact of the microcredit initiatives .

To enhance its poverty reduction efforts, it is recommended that the Grameen Bank Aukpara Branch should increase the loan size to meet the specific needs of entrepreneurs, simplify formalities, and lower interest rates. Additionally, there is a need for more efficient service delivery and timely loan recovery through a unified recovery system . It is also suggested to provide intensive entrepreneurship development training and management development training to improve the skills of women entrepreneurs .

Grameen Bank promotes customer loyalty by not only providing credit but also aiding in small business development and imparting basic healthy living principles. This holistic approach ensures that borrowers grow alongside the bank, which fosters a strong, loyal customer base due to the integral support they receive in improving their socio-economic conditions .

The Grameen Bank's microcredit program at the Aukpara Branch significantly improves women's empowerment and contributes to economic development by enabling women to participate in income-generating activities. The access to microcredit allows them to upgrade their social lifestyles and achieve a degree of economic independence . This empowerment is further supported by the increase in savings among borrowers, providing a safety net for the future .

Microcredit programs like those of Grameen Bank contribute to community development and poverty reduction by providing underprivileged populations access to financial services, thereby facilitating self-employment and entrepreneurial initiatives. This approach has been successfully implemented in various countries, enhancing economic opportunities and fostering development at the community level. By replicating Grameen Bank's model, over 250 microfinance projects in 58 countries have advanced poverty reduction efforts .

To optimize its microcredit lending practices, Grameen Bank is advised to conduct targeted assessments to align loan sizes with entrepreneur requirements, reduce interest rates to manageable levels, and streamline lending formalities. Additionally, policies should be revised to allow a grace period before starting loan repayments. This flexibility could provide borrowers a better opportunity to generate returns before repayment begins, enhancing the program's sustainability .

Grameen Bank addresses barriers by providing credit without requiring collateral, which is typically unavailable to their target customers. These customers often lack business experience, formal credit history, and education, which traditionally would impede access to financial services. The bank's model focuses on trust and community building, reducing these traditional barriers to credit access .

The 3C's of credit refer to character, capacity, and capital, which are traditional criteria used by financial institutions to determine creditworthiness. Grameen Bank differentiates itself from this model by lending without collateral, relying instead on mutual trust, accountability, participation, and creativity. Its model targets customers who typically lack assets, business experience, training, credit history, and education, thus providing credit based on trust rather than traditional security .

Grameen Bank faces challenges such as lack of funds, absence of a legal regulatory framework, and lack of initiatives in creating financial institutions. These limitations can hinder their expansion and efficacy in implementing microcredit programs. Absence of conceptual clarity also poses a problem, which may impact the efficient operation of their services. Despite these challenges, Grameen Bank maintains effectiveness through government efforts to support and enhance the microcredit sector .

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