Our Impact Grameen Microfinance Launching Grameen Microfinance in Australia We are absolutely delighted to announce that Grameen Australia is launching a Grameen Microfinance Social Business pilot in Broadmeadows, Victoria! We had the joy of announcing this news at our recent KPMG event on 14 November 2019. PROBLEM: Despite two decades of continuous economic prosperity, spurred by a mining boom, 17% of Australian adults are financially excluded. Many of these are women. While the national unemployment rate is 5%, some communities within Australia see far higher unemployment. Broadmeadows (Victoria), the community selected for Grameen Australia’s pilot project, has an unemployment rate of 22%. Financial exclusion not only creates a reliance on charity and welfare but can also push those affected to seek out loans through fringe lenders at exorbitant rates, keeping them in an unending debt cycle. Traditional banking excludes the asset poor Traditional banks have a credit model- they lend money to a borrower and request asset collateral in return. This model assumes the borrower is capital or asset rich. In theory, this means that the only people who can access loans are those fortunate enough to have a buffer. The problem is, the asset-poor don’t have assets and they don’t have a buffer. So how can those people access credit to generate an income and escape hardship? SOLUTION "The poor are very creative; they know how to earn a living, even how to change their lives. All they need is the opportunity. Credit brings that opportunity."Professor Muhammad Yunus 2006 Nobel Peace Laureate Introducing Grameen-style Microfinance WHAT WE ARE WHAT WE ARE NOT Loans for income generation Loans for consumption Group-based lending Individual lending Social collateral and trust-based Asset collateral and track record based Social Transformation Program Commercial lending business For the poorest of the poor For the non-poor Provide education, training & mentoring. Transactional only Social business Charity or for-profit business Solving a social problem - alternative to welfare or charity to empower people through entrepreneurship Profit maximising business Commercial or market interest rates and fees to support viability Loan sharks charging usurious interest rates or no-interest loans Weekly loans and interest repayment Paid in lump-sum at the end of the term Savings program built into model and mobilised for asset-building Saving is not always part of the system The Grameen Difference Unlike a traditional bank, Grameen is a social bank. Grameen lends small amounts of working capital to a group of borrowers who are collectively responsible for each repaying their loans. This is called social collateral. To support this, they are offered mentoring, training and business education as part of a Social Development Agenda. A Sustainable Business Model Grameen Track Record PROJECT TIMELINE PROJECT FUNDING The Feasibility Study recommends we issue $1.87 million of loans to a maximum of 640 borrowers. We will require a resource base of $800,000 in operating costs which involves hiring and training centre managers to deliver our program. To fund the pilot we are raising $2.7 million through government grants, philanthropic donations and importantly YOUR support.