About Us What We Do What We Do Grameen Australia Microfinance Social Business Micro-loans and support networks for financial inclusion THE PROBLEM Australia is often called the lucky country. Yet, despite two decades of unbroken economic growth, spurred by a mining boom, 17% of Australian adults are financially excluded. Many of these are women. While the national unemployment rate is 5%, for some places like Broadmeadows in Melbourne, they have an unemployment rate of 22%. No jobs and no access to financial products means marginalised people have to rely on charity, welfare or seek out fringe lenders who charge exploitative rates, keeping them in a never-ending cycle of debt. This credit crunch will be exacerbated in a post-Banking Royal Commission environment. We know this because in 2008, the GFC caused extreme stress in international banking & financial markets, and that caused ever greater risk aversion to lend to the low-income and asset-poor. A traditional, credit-model banking system reinforces this disadvantage. Traditional banks lend money to a borrower and request asset collateral in return. This model assumes the borrower is capital or asset rich. This means that the only people who can access loans are those who are asset-rich. 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? THE SOLUTION The Grameen Model is a solution which we believe can permanently solve for financial exclusion in Australia. Unlike a traditional bank, Grameen is a social bank. Grameen lends small amounts of working capital – called microfinance – not just to one borrower, but 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 and the program is based on a Social Development Agenda – a code of conduct to instil discipline and accountability into the group. Unlike transactional banking, the model has a built-in savings component which requires clients to save and promotes asset building. It is not just a lending program. It is a social transformation program. A sustainable business model The Grameen model is intended to become a self-sustaining social business where 100% of the capital invested gets paid back, and all profits get reinvested to help more borrowers out of hardship.