Page 156 - Social Enterprise A New Business Paradigm for Thailand

Grameen Bank has overcome major barriers and proven its ability to combat poverty, dismantling
long-standing assumptions such as:

1) The belief that poor people will not repay loans without collateral.
2) The idea that rural and impoverished borrowers cannot be served effectively. Grameen
developed a distinctive credit system tailored to their needs, which has since been adapted
in other countries.
3) The notion that gender inequality cannot be addressed through financial services. Grameen
focuses on lending to women without requiring collateral, while asking borrowers to commit
to keeping their children in school and maintaining the health and well-being of their families.

Evidence of Grameen Bank’s success includes:

1) Serving more than 10 million borrower-members, nearly 97% of whom are women. The bank
operates 2,568 branches, holds total assets exceeding 295 billion Bangladeshi Taka
(approximately USD 2.4 billion), and employs more than 18,000 people (Grameen Annual
Report, 2022).
2) Maintaining a consistently high loan repayment rate (above 90%).
3) Playing a significant role in empowering women and reducing poverty on a national scale.
4) Inspiring the global microfinance movement for the poor.

Grameen Bank’s sources of income are as follows:

1) Loan repayments: The majority of the bank’s capital comes from borrower repayments. Its
high repayment rate ensures a steady circulation of funds that can be continually re-lent.
2) Loan interest: The interest charged on loans is lower than that of conventional banks. This
income is essential for covering operating costs and maintaining the bank’s financial
sustainability.
3) Savings deposits: Borrowers are required to make savings deposits with the bank. These
deposits not only enhance financial security for the savers but also contribute to the bank’s
lending capital.
4) External funding: In its early years, Grameen Bank received grants and loans from

international organizations and the Bangladeshi government. Although it has since become
largely self-sufficient, it still receives external funding for specific projects or expansions.
5) Investor capital: Investors are repaid only the principal and receive no dividends. These
investments function as a form of capital that supports lending and business expansion.

Grameen Bank’s microcredit model has been adopted in various countries, including the United
States, using the same core method: issuing loans to women backed by a group of five guarantors,
without requiring any other form of collateral. In its early years, most of the bank’s borrowers
were men, reflecting the patriarchal norms of Bangladeshi society. However, after seven years of

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