Grameen Bank, Bangladesh

Grameen Bank's Method of Action

The Grameen Bank's method of action can be illustrated by the following principles:

Start with the problem rather than the solution: a credit system must be based on a survey of the social background rather than on a pre-established banking technique.
Adopt a progressive attitude: development is a long-term process which depends on the aspirations and committment of the economic operators.
Make sure that the credit system serves the peasants, and not vice-versa: credit officers visit the villages, enabling them to get to know the borrowers.
Establish priorities for action vis-a-vis to the the target population: the most poverty-stricken peasants needing production resources, who have no access to credit.
At the begining, restrict credit to income-generating production operations, freely selected by the borrower. Make it possible for the borrower to be able to repay the loan.
Lean on solidarity groups: small informal groups consisting of co-opted members coming from the same background and trusting each other.
Associate savings with credit without it being necessarily a prerequisite.
Combine close monitoring of borrowers with procedures which are simple and standardised as possible.
Do everything possible to ensure the system's financial balance.
Invest in human resources: training leaders will provide them with real development ethics based on rigour, creativity, understanding and respect for the rural environment.