The Grameen Bank is a specialised credit institutional framework which is develops in Bangladesh at 1983. The Grameen Bank started as a project in a small village in Bangladesh and it was initiated by Muhammad Yunus, a university professor in economics in 1976 (Wahid and Hsu 2000). The idea behind the project is to help the rural society become self-reliant and create economic opportunity, and it also tries to help the rural society to get out of poverty through access the small loan which is provided by Grameen Bank. The project was successful and the Grameen Bank was subsequently established in 1983 (Wahid and Hsu 2000). In November 1999, the Bank had 1143 branches and almost 40000 villages had the opportunity of using the bank's services (Wahid and Hsu 2000). The Grameen Bank is an institution which is different with other specialised credit institution. It is the bank which is provides the Micro-credit to the rural society, and those credits are given to poor people who cannot provide collateral and hence cannot take loans with other banks (Osmani 1998:69), especially for the landless woman. It has illustrates that how the culture is manifested and perpetuated by many different aspects of the organisation, such as the structure, policies, procedure, vision, employment, training processes and etc.
The Grameen Bank Operation Mode
Although, the loan are provide for the poor people without any collateral, but the trust of the Grameen Bank had bring them the marvellous repaid rate which is 98.90 per cent . The Grameen Bank had provided a special credits plan which is using the peer pressure to ensure that loans are repaid. The most important issue is the loan which is providing by the Grameen Bank is not for individual, but it is for the group which is formed by the 5 borrowers. Then loans are given to two people at the time and the next two members will not receive loans until the first two borrowers have repaid their loans (Wahid and Hsu 2000). The centre is the main place where important organisational activities take place. Several groups meet together weekly, and bank workers also will attend. All loan proposals are openly discussed, repayments are made, and compulsory saving deposits are accepted at the weekly meetings (Barua 2000). The loans range has set by the Grameen Bank which is from $100-$300 and the interest rate for the loan is 20 per cent, which is higher than the normal business banks for 5 per cent. However, the borrowers also need to take part in the training programme which is learning about how the bank works and its rules and the 16 decisions. The borrowers also have to save one taka every week in addition to 5 per cent of the loan amount, and the savings are accumulated in the group fund. The total amount is deposited with the Grameen Bank at 8.5 per cent annual interest. They can use the group funds for consumption at times of sickness or social ceremony, and the group member also can use the group fund for the further investment, when it is agree by whole group members. The loan is interest free. When the group member are leaving, they also can withdraw the total savings, but it is not included the compulsory contribution of the 5 per cent loan amount. It's kind of group tax and it is non-refundable. Those rules have made the group fund to become a mini-bank and it is grown over the years and become the substantial resource for the Grameen Bank and its members. The members also have to pay a fixed charge of taka 5 per thousand for loans in excess of one thousand taka (Barua 2000). The Grameen Bank had move out the traditional way and provide the loan which is without the collateral for the rural society. For ensuring that the banking services can be provided without asking the collateral, they had replaced the material collateral to social collateral, and the group which is form by the borrower will acts as collateral. Thus, as long as the group exists, the loan will have the chance to be recovered. If those members are fail to pay their instalments to bank, they will face the considerable pressure from their group members, this is because if they fail to pay the instalments, then this will directly affect other group member 'fortunes'. In the other hand, the failures to pay the instalments will also affect to the extension of their group centre. If a member has a genuine problem in repaying instalments, other members can provide assistance. If the entire group faces the similar situation, the centre takes the burden (Barua 2000).
Although, the loans service which is provide by the Grameen Bank is helpful for the rural society to improve their life style, but there are still have several criticisms exists in the Grameen Bank loan service. Although the interest rates which is charged by Grameen Bank are lower than loan sharks, but the interest rate are still high than other general bank. The loan may help the rural society to improve their life-style, but the highest interest rate may not afford by the borrowers. This will cause the borrowers sold their sole assets to pay their instalments. For instance, a doctoral student in anthropology at 1994 had met several bank members who sold hens with hatching eggs, or rice and fruit on the strength of future harvests, to collect enough money to pay their instalments (Jennifer Pepall, 1998). Another problem which is happen in the Grameen Bank loan services is the peer-pressure between the group members. This kind of pressures has not only become the borrowers' burden, it also had brought the violence to the destitute families, and also have some family which can't afford the instalments are try to borrow the money from the local money-lenders (paikars) who would charge them the highest interest rates. In the other hand, Grameen Bank had provided the loan to help the borrowers to enrich their life-style, but it has failed to resolve the key factor which is causes the Bangladesh poverty, such as the government policies which is providing the education, healthcare and infrastructure. And those of the issue have completely defeats the objective of the Grameen Bank. For my opinion, to achieve the goal of helping the rural society to jump out from the poverty, the Grameen Bank should reduce their interest rate to 15 per cent which is same by the general bank. This method will help to reduce the pressure and burden of the borrowers. It also will help to avoid the violence case for happen. In the other hand, I suggest that the Grameen Bank should use their group fund to improve their country education, healthcare and infrastructure.
Organisation Structure of the Grameen Bank
Grameen Bank had created a unique organisation structure to provide their loan service, and these organisation structures are highly decentralised. In their organisation structure, the authority is devolved to the field level. Grameen Bank separated by four hierarchical structures, which are branch office as the lowest unit, following by area office, zonal office and the highest is the central office. The branch offices have 40 to 60 offices and each office need to supervise 2 to 10 groups with 5 members in each group. Branch offices arrange their group to achieve the main objective of the bank which is provide the loan services without the collateral. Area office is the third level office of the structure which is comprised by 5 branch offices. All the loans which are required by the Grameen members are approved by the area office. The second level office is the zonal office which is comprised by 5 area offices. At the top Grameen Bank structure is their central office. The head office seldom interferes in plans devised by the field offices. The field offices are also encouraged to send monthly reports directly to the Managing Director summarising different aspects of their work. The Managing Director, with the aid of other colleagues, reviews these reports and publishes significant issues, concerns, and suggestions identified by them in Grameen internal monthly magazine, which reaches all bank officials and workers (Auwal 1996). These methods of communication provide fora for dialogues that seek to empower Grameen Bank employees as responsive, committed, and productive teams (Barzelay 1992). In the other hand, Grameen Bank dint not create an appropriate policy to control their fund which is utilising by the Grameen members. The structure of control is essentially decentralised, participative, and democratic; it emerges not from the higher echelon of the organisation but from the concerted actions of members, based on the philosophy, values or corporate vision provided by the top management (Auwal 1996). Grameen Bank has been grown around 1000 branches with almost 2 million members covering almost 35000 villages for the past ten years. The total loan amount which was provided by the bank has been excess around TK 41 billion (£ 370 million). For the housing loan which approved by the bank was around 11 per cent of the total loan. Grameen Bank's organisation structure and their operations were successfully reacting to the local needs. On the other hand, Grameen Bank had provided a unique structure strategy which can eliminate the process of supervision on their worker, and this structure strategy is using the general performance of branches to calculate the salaries of managers. As the same time, the salaries of employees are also depending on the productivity. Those structure strategy had create a highly motivation for the Grameen Bank employees to helps the poverty society. The credit-group structure developed by the Grameen Bank in Bangladesh has been a popular non-market institutional form because of its high repayment rates. In light of its apparent success, it has been replicated throughout the world (Thomas 1995). The economics literature has generally sought to explain the success of the structure by analysing how was the various economic incentives created by it ease the market failures which produce credit rationing (e.g., Varian 1990; Stiglitz 1990; Besley and Coate 1995; and Conlin 1999). The early theoretical analyses seeking to explain the success of the structure have changed to a more critical analysis of its efficacy (e.g., Morduch 1999; Conning 1999). Concerns are also being raised that these loan funds do not result in any long-term change and that they do not work in the context of advanced industrialised nations (Singh and Wysham 1997).
The problem which had shown in the organisation structure of Grameen Bank is the highest offices of the Grameen Bank are lack of administrative to their field officers. The problem which is lack of administrative for the head office may create the chance for the field officers to misuse the funding or authority. This may bring a lot of problem to the Grameen Bank, such as bring the violence to the programs, losing the funding and more. For example: the staff may misuse their authority to help their family members to get the high amount of loan, this may let the people who can't get the loan to bring the violence into the programs. For my opinion, I suggest that Grameen Bank should create some rules or policies to ensure that the field officers have not misuse their funding or authority. In the other hand, I also suggest that the head office should also encourage interfering in plans which is devised by the field offices. This idea may help the Grameen Bank head offices to supervision their field officers. It may help to ensure that the plan which is providing by the field offices is smoothly and not misuse the funding.
Empowering Women
The Grameen Bank is considered by many to have been a success, and has served as a model for projects in more than 50 other countries. For instance, it is argued that the Grameen Bank has improved living conditions for 90% of its borrowers (Osmani 1998:69). Importantly, the Grameen Bank has been cited as empowering poor women (Bernasek 2000:369). The reason for the Grameen Bank targeting at women is because women are assumed to be more reliable and they will spend the money on their family, such as send their child to school. That is why until today 96% of the banks borrowers are women. In Bangladesh, they considered that born in the poor family is a curse, if being born poor as a woman will be a double curse. The reason that all the women had lost all their hope and living their livers basically is because the women in Bangladesh is powerless than man. Most of them have not employment opportunity except begging and working for the richer households as maids. In this poverty country, the women who had widowed or divorced and have dependent children, they are not have any support or shelter to support their life. Most of them are live in below the line of poverty and they are the first target on the Grameen Bank loan service. A crucial aspect of the Grameen Bank is that it was initiated by a well-educated man, and not by the poor women themselves. In fact, it has been noted that women at first were very sceptical of the Grameen Bank. They did not understand the idea of micro credits or how it would benefit them (Wahid and Hsu 2000). Those problems had caused the Grameen Bank staff quite difficult to convince the women to join their bank programme and business activities at initially. However, after the Grameen Bank had successfully convince some of women to involved and join their programs and those of programs had succeeded to changing their life-style, those potential borrowers of the Grameen Bank are started to convince and influence other women to join the programs too. For convenience the staff to convince the women join the programs, Grameen Bank had designed and delivered the programs to the potential borrowers. The staff of the Grameen Bank will prepare all the paperwork and go to the potential borrower's doorstep to convince and explains to the borrower's about the programs benefit and how it operation. All the process to join the program will be done by the staff. The only thing the borrowers are supposed to do is to form their group with five potential borrowers they like. When the potential borrowers stay at the poverty situation which needs the support and meet the package like what the Grameen Bank had provide, they have no reason not to try the package. This is how the Grameen Bank successful to convince the women to join their programs. This approach would seem to be in line with a WID and also a GAD perspective. Those experts from the outside are not conceived of as problematic. It is believed that the expert will make the women understand their own good through dialogue and training and hence women will have reached their own conclusions. It can also be noted that the bank's efforts to empower women are based on efficiency arguments rather than an understanding that empowerment is good for women. In other words poverty alleviation is more efficient if women's situation is taken into consideration (Bernasek 2003:373).
Another aspect, is that the high interest rate and the social pressure resulting from group based loans could serve to exclude the poorest groups, who are in most need of help (Wahid, Hsu 2000; Turner and Kasynathan 2001:48). This is problematic in relation to empowerment of women, since it is frequently argued that women typically constitute the poorest group of all societies (Steans 1998:145). The main objective of the Grameen Bank to provide this loan is to help the borrowers to improve their livelihood. Those borrowers do not have to comply with the normal bank rules. It seems then as if the Grameen Bank actually takes some steps to reach the very poor people. The way the bank operates also is designed to meet the needs of their members. For example, the bank goes out to the villages to serve the borrowers who cannot make it to the bank (GB4). It is argued that the Grameen Bank takes a wider grip on poverty alleviation in that the bank is involved in welfare projects as well (Osmani 1998:70). The bank also provides evening schools for their members as well as giving advice on family planning (Osmani 1998:70). Further, the bank has set up a number of social goals, referred to as the 16 decisions (Bernasek 2003:373; GB2). Those decisions had driven the members to improve their livelihood, such as improve their house, improve sanitation and send their children to school. It can be argued that these goals are partly influenced by a mainstream feminist line of thought, which typically focus on education and family planning. As was pointed out earlier, family planning is a complex issue, and trying to restrict the number of children then it might not always work as to empower women (Lewis and Mills 2003:11f; Davis 2003). The objective and goal of the bank is to help them to jump out the poverty and improve the poverty society livelihood. As a result, the bank had successful to raised their status and improve their livelihood.
Although the Grameen Bank created a success story of Bangladesh for extending the loan to help the poverty women walk out the poverty life. However, still got most of the women or poverty people do not get the loan. In the other hand, the Micro-credits which is providing by Grameen Bank also have their shortcoming, such as bring the violence to the borrowers, debt burden and more. Rahman is a doctoral student in anthropology at 1994. During his study, Rahman had found that, most of the men had encouraged or influenced women to join the bank loan service and most of the loans that the women borrow in Grameen Bank are used by the men. In one case, a man threatened to send his wife back to her birthplace and remarry unless she took out a loan (Jennifer Pepall, 1998). When this kind of case happen like this, the women not only can't get any benefit from the loan service, and at the end they still need to face the debt burden for the loan. In the other hand, if the group members vetoed their group member loan, then this may also create the violence case, such as the family member of the requestor may find and fight with the group member who vetoed the loan that they applied. If a woman does not get a loan or the loan amount is smaller than they expected, this also may erupt the violence case. In Bangladesh, a woman does not have any employment opportunity. Although the loan service is helpful for the women to improve their livelihood, but the problem which is lack of the employment opportunity will cause the women which is widowed or divorced do not have enough ability to afford their instalment and those services will become the debt burden for the women. That high interest rate also is one of the burdens which will made the women having the pressure of the instalment. For my opinion, i suggest that Grameen Bank should examine the way of the borrower using the loan. This can help to avoid that the loan are misuse by the borrowers or avoid the loan are using by other people. In the other hand, I also suggest that Grameen Bank to take over the loan which is providing by the group funding or create some rule or policy for it. This may help to decrease the violence case which is happening between the group members.
In the conclusion, I believe that Grameen Bank's Micro-credits programs are programs which can bring a lot of benefit to the country development. The rural socioeconomic and political realities are the problematic which are quite evident exist in the Bangladesh. Those problems like low productivity, subordination of women, unequal access to public resources and intricate power relations between the rich and poor are the problem which is causing the Bangladeshi living in the poverty country. Grameen Bank had successful developed a unique organisational and management system which is helpful for the poverty country. Although the programs are not perfect and it still have some shortcoming exist in the programs, but I believe that if Grameen Bank continue to define and eliminate their programs shortcoming and also try to improve their programs, those programs will become more successful and bring more benefit among us. The success of Grameen's "counter-culture," as founder Muhammad Yunus calls it, had successful to prove the Micro-credits for the poverty borrowers are successful to help the poverty society to improve their livelihood and also prove that the borrowers will take responsibility for repaying loans that given by right culture conditions.
