In Bangladesh, Professor Mohamed Yunus Started the Grameen Bank from Which

Essay

In Bangladesh, Professor Mohamed Yunus started the Grameen Bank from which poor borrowers (mostly women) who do not have collateral are given small loans as seed money for businesses or other projects. Loans are provided to groups of five women, who receive the loans sequentially. Once the first borrower has established a repayment schedule, the second borrower receives her money, and so on. How do you think an organization such as the Grameen Bank might ensure that the borrowers are indeed creditworthy? Remember that the bank does not have any information about the borrowers' creditworthiness and it is in the group's best interest to maintain a good loan repayment schedule so that they are eligible for bigger loans as time progresses.