Today was a very important step in my internship...By reading "Creating a world without poverty" by Muhammad Yunus last summer (2007), I was able to understand in which way microcredit and specially the grameen microcredit was different from any other conventional bank.
The main guidelines are the following:
-Mainly dedicated to poor women
-Without any collateral
-Cumulative loans (Basic, Housing, Micro-entreprise, Higher education, Struggling)
-Offers two products: Loans and Savings ... with an interest rate of 8.5% on the savings account after the first year!
To make a long story short, this system operates in a distinguished way:
The staff of the Grameen Bank's Branches goes to a Center meeting every week where it gathers with the borrowers of this specific village for the weekly repayment installments, and not the other way round.
Groups (of approximately 5 members) form a Center (made of 1 to 10 groups) which forms a Branch (around 80 Centers) ; These branches are related to an Area Office which belongs to a Zonal Office...The biggest administration being the Head Office (in Mirpur-2, Dhaka)
Illetrate women are teached how to write their names in order to sign their papers, the purpose of the loan comes from the borrowers themselves, and nothing is cost-free...if their is trouble repaying, some detours are possible in order to enlarge the period of repayment.
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