Muhammad Yunus Gramin Bank Bank For The Poor

This is a great lecture by Mohammad Younus the Nobel Peace Price Winner for work for micro credit for poor people. The lecture is very interesting how the bank for poor people works. He simply reverses the rules of modern day commercial banks and the bank still works. It is a non profit bank i.e. the earnings are re-invested into the bank. It is a truly an eye opener, that there are alternative ways of doing things.

The key concepts of operations are.

  • Small loans to poor people, with no collateral
  • No penalization if poor person cannot repay a loan. The only thing he looses he will not be able to get a loan again
  • Bank goes out to people, especially women, instead of people coming to the bank. The especially go for women who do not know what to do with the loan
  • The interest never exceeds the principal. This is in contrast to the loan sharks
  • No business plan needed for the loan. Every human is an enterpeneur
  • No training given to the loan beneficiary. The loan beneficiary uses own creativity to find the right business

It is truely amazing how this bank works. His goal is to have a world without poverty.