Grameen Foundation assists the poor to become self-employed and work their way out of poverty by providing them with micro-credit on terms that are suitable to them and by teaching them sound financial principles.
Microfinance projects are specific for each community; there is no generic blueprint for a microfinance project.
Grameen clients, usually women, must form groups of 5 and apply for a loan together, which allows them to form a ‘peer support’ group which enables them to:
- Provide encouragement for each member
- Provide financial support during a member's illness or hardship
- Provide positive social pressure: "We, members, are responsible for the group's loans!"
- Provide skills: the group's chosen leader should be literate and numerate
Since borrowers are responsible for each other’s defaults, borrowers carefully choose their peers. An average loan is $150-$200.
6 to 8 Groups make up a “Village Centre”. The Centre meets once a week in their village for an hour with a Grameen Foundation worker. During the meeting, they focus on organising, training villagers, distributing and collecting loans. A Grameen Foundation worker (called Loan Officer) services two such Centres every day: 10 Centres in 5 working days. Therefore, Loan Officers have a portfolio of 300 to 400 loan recipients, or Clients.
Clients attend weekly Grameen meetings with the Grameen Loans Officer. At the meetings loans are repaid and issues are discussed. Clients update others about their respective Groups and about how their own micro businesses are going. At every meeting they remind each other of the 16 decisions:
- We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage, and Hard work – in all walks of our lives.
- Prosperity we shall bring to our families.
- We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest opportunity.
- We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
- During the plantation seasons, we shall plant as many seedlings as possible.
- We shall plan to keep our families small. We shall minimise our expenditures. We shall look after our health.
- We shall educate our children and ensure that they can earn to pay for their education.
- We shall always keep our children and the environment clean.
- We shall build and use pit-latrines.
- We shall drink water from tubewells. If it is not available, we shall boil water or use alum. [NB 'Alum' or aluminium sulfate is used in water treatment to coagulate or flocculate particles in raw water causing their quick sedimentation, making easier the decanting of clean water]
- We shall not take any dowry at our sons' weddings; neither shall we give any dowry at our daughters wedding. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.
- We shall not inflict any injustice on anyone; neither shall we allow anyone to do so.
- We shall collectively undertake bigger investments for higher incomes.
- We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.
- If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline.
- We shall take part in all social activities collectively.
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