Formato del mensaje UDP
4. Nombres de dominio
Bank about holding weekly meetings. After that two members are given loans. If their loan utilisation and repayment behaviour is found satisfactory, after a four to ten week period, other members are given loans. The borrowers of the Grameen Bank are thus, referred to as members of Grameen Bank.
Each loan has to be repaid in weekly installments within a year. If one member of a group defaults, the other members will not be eligible to obtain another loan from the Grameen Bank. Thus there is very considerable group pressure to ensure repayment by each member. But group responsibility alone cannot ensure loan repayment. The loans have to be found to be remunerative if the borrowers are to take repeat loans. Weekly installment payment, group pressure and the profitable use of funds supplement each other in ensuring loan repayments.
The Bank observes general rules on the upper ceiling of loans. This ceiling was taka 5,000 in 1985, the year of the survey. Recently, in some of the older branches this ceiling has been raised.
When a loan is given, 5 per cent of the loan amount is retained by the Bank. This is a contribution to savings by the group. It is called a group fund. In addition, each week each member contributes one taka to this saving in the group fund. The members can borrow from this group fund for any purpose, including repayment of the Grameen Bank loan itself or for consumption. They are thus helped to avoid using the original loan for consumption purposes and to make repayments in adverse situations. The loan from the group fund has again to be repaid in weekly installments.
Another fund called the emergency fund is created by the group members with a contribution of four per cent of each person's loan. This fund can be used only to repay a loan in the case of an emergency created by unforeseen accidents like death, theft, or other natural calamity. This fund acts as an insurance component.
144
The interest rate of the Grameen Bank loans is 16 per cent per annum, but the effective rate of interest is higher because of the compulsory contribution to the group fund and the emergency fund on which the members do not have any direct claim. The effective rate of interest stands at 25 per cent when these two are added to the nominal interest rate. These payments are seen as interest payments because they are compulsory and the expenses are incurred only because members borrow money from the bank.
An alternative estimate of effective interest rate is obtained by taking into account the fact that interest payments on Grameen Bank loans start two weeks after the disbursement of the loan and all interest payments are based on the total loan. Accounting for this and the charges for group fund and emergency fund implies an effective rate of interst of 40 per cent.
The group fund and the emergency fund provide an insurance benefit to the borrowers. The loans from these funds are interest free. Therefore the addition of these contributions to calculate effective interest rates may be considered to involve an upward bias and this needs to be recognised in interpreting conclusions obtained by using those effective rates.
The Bank's field staff play a crucial role in the process of borrowing, loan use and repayment. He/she attends the Centre meetings where the loan proposals of the members are discussed. With their advice, these are finalised. The branch manager then approves the loan. After a loan is approved, the Bank Worker brings and transfers the money to the individuals during a weekly meeting. The Bank staff also collect repayments by attending the weekly meetings and make all the required entries in the pass books. The Bank Workers' presence eliminates the need for the borrowers to travel to the office of the Bank.
In addition to banking facilities, the Bank has undertaken to motivate its clients towards achieving better standards of health, nutrition, education for children and a community consciousness. For this purpose the Bank staff inform members about
health, nutrition, family planning and educational needs. The formation of groups and Centres helps to create a feeling of cooperation among the members. This is encouraged by the Bank Workers who motivate the members into solving their day to day problems by cooperating with each other. This has some impact on the regularity of loan repayments. The Grameen Bank undertook these initiatives in a response to members' interests.
The above processes are costly to administer and the Bank's programs and operations have to be subsidised. How far such banking may be viable and cost- effective is yet to be judged. In the expansion phase of the bank, many overhead costs have to be incurred which only become efficient after substantial expansion of operations.
During the last few years the Bank has expanded substantially. In 1985 (the year of the survey for this study) the Bank operated 226 branches. In 1985 it covered 5 per cent of the villages in Bangladesh and 24 per cent of the target group population in those villages. In 1989, a total of 641 branches have been established, which covered nearly 20 per cent of the villages. This may be compared with the number of branches of the six major nationally owned banks of Bangladesh which ranged between 182 and 1233 in 1984.
7.2 Operation of the Grameen Bank among rural women
Institutional finance as a means of generating income earning activities and employment for women can be successful only if rural women borrow for self employment. Doubts arise because such borrowing deviates from women's traditional norms of behaviour. Women in rural Bangladesh are expected to contribute labour to the family enterprises but productive assets are owned by male family members. Thus when women proceed to obtain loans from an institution, their male guardians or even the village leaders may not approve. This may be the case with Grameen Bank loans, although the women do not have to go to the Bank,
146