Sometimes $27 is all it takes to radically make a difference.
Muhammad Yunus, founder of the Grameen Bank had an idea: that people living in poverty who were passed over by larger banks would repay small loans if given the chance. It turned out he was right.
In 1976, Yunus offered 42 women in a small village in Bangladesh a total of $27 at a fair interest rate to help them lift themselves out of poverty. This initial loan was paid back and many of those women were able to take their first steps in improving their quality of life. Building on that initial success, in 1983 Yunus founded a full-fledged “microbank” for poor Bangladeshis called the Grameen or “Village” Bank.
The success of Grameen has been massive, as of April 2013, Grameen Bank which is 95% owned by the borrowers of the bank) had issued over US$ 11 billion to 8.5 million, mostly women, micro-entrepreneurs. The bank solved the default problem that plagued larger institutions by employing a technique called “Group Centers”. These are small groups of five women who apply for loans together and are named as co-guarantors on each other’s loans. If anyone in the group fails to repay, everyone in the group is held accountable when applying for future funding. This social incentive has been able to allow Grameen to enjoy a very high repayment rate at 98%. As borrowers pay back their loans and gain more business experience, they can take out larger loans to further grow their business, time and time again.
Professor’s Yunus innovative efforts to increase economic and social development among some of the world’s poorest citizens earned him and the Grameen Bank the Nobel Peace Prize in 2006.
TO CATCH A DOLLAR: Muhammad Yunus Banks On America is a documentary directed by Gayle Ferraro that follows Professor Yunus on his historic journey to establish his revolutionary and unique model of microfinance in the US.
The film chronicles the birth of Grameen America and the stories of its first micro-entrepreneurs; from the challenges they face to the successes they achieve. These inspiring women learn to rise from poverty by starting and growing their own sustainable businesses with the education, peer-support, and non-collateral microloans they receive from this successful and innovative system of banking.
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