Muhammad Yunus and the Grameen Bank

Source: 
John F. Kennedy School of Government (Harvard)

Date

2007

The Grameen Bank of Bangladesh created the model for large-scale "microlending" in the developing world, in the process becoming an institution known and respected internationally for a creative and effective approach to poverty alleviation. Grameen's willingness to make extremely small loans at relatively modest rates of interest to borrowers without traditional forms of collateral has allowed it to reach nearly six million borrowers in Bangladesh—one of the world's poorest countries—and to serve as exemplar for other micro-lenders serving the poor throughout the world. What's more, its founder, Muhammad Yunus, became internationally known for his management of the organization; Yunus became among the best-known of what is said to be a new breed of leader, a "social entrepreneur" who sought to combine sound financial practices and income generation with social objectives.
This case tells the story of how Grameen grew from a small local experiment into a major force in Bangladesh serving more than 60,000 villages. It describes the stages of that growth—from a small organization staffed by volunteers to a sophisticated one with more than 17,000 employees. It tracks Grameen from its origins as a part of the state-owned bank system in Bangladesh to its role as a major financial organization, with special attention to the forms of financing which made its growth possible and management approaches employed to ensure that high quality customer service and reliable loan repayment continued as Grameen expanded its reach.
The case was conceived as one which establishes a template for the evolution of an organization from one that is philanthropically and government supported into one that relies on operating income to sustain itself. It presents and invites discussion of the view expressed by its founder that Grameen represents an important new type of organization, a hybrid he described as a "non-loss business" employing the methods of a for-profit venture but with social objectives.

Link

Keyword

  • Field Building
  • Strategy

Region

  • Asia

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