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Features of microcredit program: No collateral is required to get loans. Group based approach. Small amount loan (100-150 US$).
Weekly attendance in the group meeting. Intensive credit monitoring. Participatory approach.
As of October, 2011, it has 8.349 million borrowers, 97 percent of whom are women. With 2,565 branches, GB provides services in 81,379 villages, covering more than 97 percent of the total villages in Bangladesh.
Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).
Grameen bank focusing on the women who can be easily converted as empowering women by giving them micro credit loans.
As envisioned by Mr. Yunus when he founded the Grameen Bank 30 years ago, microcredit involves the extension of small loans without securities to groups of poor people especially women so that they can invest in income-generating activities. It is a way of improving earning capacity and therefore reducing poverty.
But beyond providing these small loans, successful microcredit programmers give the borrowers and their children increased access to basic social services. As a result, they can focus on their business ventures without having to worry about their families sheer survival.
Microcredit also empowers women by enabling them to make economic decisions and bring in a larger proportion of household income.
.Benefits
of Microcredit:
Microcredit has been a popular means of development process in developing countries. It has many direct and indirect benefits to the society. Poor women who have limited opportunity of getting financial assistance find it very useful. It appears to them as an easy and effective source of finance. Though microcredit is not out of many criticisms, it contributes to the people in various ways. Some of the positive impacts of microcredit are described in the following section.
Reduction of Vulnerability
Microcredit programs aid against crises by building household assets for those in need. These assets can bring in extra profit if they need to because they can be sold. Also, they can be used to verify credit worthiness when dealing with lending agencies or businessmen. These additional assets provide more security for families because they are diversified; diversified assets cut the risks of loss. Furthermore, other aspects such as skills training and female empowerment also help families cope with crises. Microcredit teaches people to hold their own place in society, thus allowing the cycle of poverty to stop.
Increased Consumption
Microcredit programs cause an increase in household consumption. A researcher from Bangladesh found that forever 100 taka (unit of currency in Bangladesh) lent to a female borrower, their household consumption was raised by 18 taka. Even small increases in consumption can lead to better health and well being for the entire family. Providing a greater stability for families has huge long term positive effects for ending poverty cycles within families.
Boosting Self-Esteem
Simply put, participants experience a sense of pride when they create or expand a business successfully. Many learn new trades or management skills causing them to have a sense of ownership in what they have accomplished and they feel worthy of a place in society. This boost in self-esteem causes many women to want to continue being successful, causing a halt in the cycles of poverty that once surrounded their lives.
poor people can obtain small loans, receive money from relatives working abroad and safeguard their savings. The microfinance revolution started with the recognition that poor people needed access to loans and that they could use these funds productively.