"Where businesses cannot develop, countries cannot flourish. Let us use this International Year of Microcredit to put millions of families on the path to prosperity. I extend my gratitude to the nation and people of Bangladesh for helping to show us the way." the former UN general secretary Kofi A. Annan Said in August 2006. Bangladesh remains a developing nation, in despite of continuous domestic and international efforts to improve economic and demographic prospects. Its Gross Domestic Product (GDP) based on purchasing-power-parity (PPP) per capita is US$1299,695 in 2007 , this value is much lower the world GDP average of $10.200. The Grameen Bank, which contributed to developed Bangladesh, was founded in 1976 by Muhammed Yunus who won the Nobel Prize in 2006 for his contribution to reduce poverty by the way of micro credit. The word "Grameen", derived from the word "gram" or "village", means "of the village". The Grameen Bank makes small loans to the impoverished without requiring collateral. Collateral is a borrower's asset that is forfeited to the lender if the borrower is insolvent. The system of this bank is based on the fact that poor have skills which are under-utilized. Today, Bangladesh seems more developed. However, has the Grameen bank really reduced poverty in Bangladesh?
[...] Yunus wrote, about the possibility to realize micro credit in North America: the surface, it appears to be too simplistic to be true.”[16] We saw that the Grameen bank was a long process which began after the flooding of 1974. From this time, Dr. Yunus, who were more known as a brilliant economics teacher in Bangladesh, benefited from the situation to try banning poverty. He and a part of his students aimed at help peasants and women to escape poverty in the city of Jobra. [...]
[...] Considering revenues and expenditures, the total revenue generated by Grameen Bank in 2003 was Tk 3.58 billion (US $ 61.25 million). Seventy-five percent of the revenue came from interest on loans. Total expenditure was Tk 3.23 billion (US $ 55.26 million). Salary, allowances and pension benefits accounted for 38 percent, or Tk 1.23 billion (US $ 21.04 million). Interest payment on deposits of Tk 1.10 billion (US $ 18.82 million) was the second largest expenditure (34 per cent). The Grameen Bank had profits of Tk 351 million (US $ 5.99 million) in 2003. [...]
[...] The banking system in Bangladesh was created for men alone. Yunus turned this practice by giving loans almost solely to women. He further saw that in the family, the woman always wants to help the entire family. She will buy things for the house, for the children, she will buy utensils or a bed. But, when a poor father gets money he will generally spend the money on himself[6]. Thus, Dr. Yunus saw that giving loans to women benefited not just one person but the entire family. [...]
[...] While ideally higher education should be provided free by the government (as in Germany, for example), until this is implemented by the Bangladesh government, the Grameen Bank is doing wonders to help the children of Bangladesh receive higher education. Creation of spin-off companies Many spin-off companies have been created with the Grameen name; however, they are independent legal entities, paying taxes like any other company in Bangladesh. The names of some of these companies are: Grameen Phone Ltd., Grameen Telecom, Grameen Communications, Grameen Cybernet Ltd., Grameen Software Ltd., Grameen IT Park, Grameen Information Highways Ltd., Grameen Star Education Ltd., Grameen Bitek Ltd., 10) Grameen Uddog (Enterprise), 11) Grameen Shamogree (Products), 12) Grameen Knitwear Ltd., 13) Gonoshasthaya Grameen Textile Mills Ltd., 14) Grameen Shikkha (Education), 15) Grameen Capital Management Ltd., 16) Grameen Byabosa Bikash (Business Promotion ) and 17) Grameen Trust. [...]
[...] Conversely, at the cost of the poor, a large number of NGOs have benefited; banks have found a convenient route to increased lendings; and corporations have got a growing consumer market to target.”[11] According to this author, Grameen Bank has not created wealth. Acceptance of outright grants Actually, Grameen is not really free enterprise at all. Yunus's first pile of cash came from the United Nations. Then he went to the Bangladesh government. Then he went to US foundations. In the 1980s and 1990s, the bank received nearly $150 million in grants. [...]
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