My Trip to Bangladesh

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For three weeks I lived in Bangladesh participating in a program at the Nobel Prize-winning micro-finance Institution, Grameen Bank. The program was called “Comprehensive Training Program for Replicators.” I applied for this program in order to connect my background in accounting and finance to my future work as a Business Adviser in the Peace Corps. My hope is that micro-credit can be used to support the businesses I will be working with in my host community in Ecuador. After completing the program I left with the skills to either support an existing micro-finance institution or to build a new program from scratch.

Grameen Bank, founded by Muhammad Yunus in 1976, popularized a new term called mico-credit. Yunus’s book, Banker to the Poor argues:

  1. Credit is a fundamental human right denied to the poor,

  2. Credit is a way to alleviate poverty and empower women,

  3. Poor borrowers will honor their loans even in the absence of collateral.

Starting with 27 dollars this economist gave small loans to a group of women. To his surprise they paid their loans back in full after investing in materials to build baskets and stools, which they sold in the market. Today the organization has over 8 million members, nearly all women, who use the loans to invest in projects from livestock to grocery stores.

In the training, I was placed in a branch in the village of Purila Poba for a little over two weeks conducting the rest of my training in the cities of Dhaka and Bogra. Because I did not speak Bengali I worked with a translator and program coordinator **Matin** who later I would also call friend. **Muhammad Sidduzman**, the Branch Manager spoke no English but spoke with me for countless hours going over the technical side of running a branch office. Discussions included how to recruit new borrowers, lead meetings, establish loan ceilings, check loan utilizations, approve or reject loans and maintain security, among other topics.

I observed member meetings, visited borrower’s homes and interviewed internal staff. My goal was to develop an understanding of their operations by building a procedure manual and process workflow maps.

A typical day would be to attend a Center Meeting in the morning, visit the homes of several borrowers, and return to the office to observe the loan distribution and daily closing process. Borrowers attend weekly meetings called Center Meetings with their group of 5 borrowers. The primary purpose of these weekly meetings is to collect weekly loan payments.

While groups members support each other in their businesses they are not bound to pay the bank if one of the members fails to make a weekly installment. These groups and the regular visits to the borrower’s homes by the branch managers create a relationship in which members feel connected to the mission of the organization and in turn feel obligated to pay back their loan. My host branch had a unbelievable 100% repayment history in the past year with 4 thousand members making regular weekly installments.

Grameen was successful in creating an identity as well. They accomplished this by creating tradition within the meeting. To start the meeting they count off in unison, on “Eck”, the group stands, “duey,” salutes, “Tin” they sit and start the meeting.

During the 7-day new member training they present the 16 decisions of Grameen that were created by the members themselves. All members pledge to uphold these decisions that range from drinking clean water to not taking dowry. One of the decisions is to help their fellow group members instill discipline if a member is seen as not following the rules. Another reaffirms that if any group member is having problems they come together to help.

To close a meeting members repeat their motto, “Oko Kano Stringkola A Amader Portula” or “Courage, Hardwork and Discipline, in all walks of our lives.”

I hope to live up to the Grameen motto in Ecuador.

Paul

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