The Grameen Bank may look like a conventional bank, but the resemblance ends at the front door. Unlike most banks, owned by rich men, the Grameen is owned by poor women. The bank does not take its clients to court for failing to pay, and interest can never exceed the amount of the original loan.
Economist Professor Muhammad Yunus began the bank as a village project in Bangladesh in 1976. It became a formal bank in 1983 and has helped millions of poor people.
The Grameen bank lends money to the rural poor, mostly women, without collateral and with terms that would make a conventional banker faint. The women use their loans for self-employment based on their existing skills.
They weave, make mats, do wood and bamboo work, fatten cows and goats, and do embroidery. (The photos are from the bank's gallery.)
The bank is successful. In 27 years as a formal bank, Grameen has made a profit in all but three years. Since 1995, it has taken no money from donors and has been self-reliant.
The repayment rate is 99%!
Professor Yunus believes that micro-credit can go a long way towards eliminating poverty - at least by half by 2015.
So far, the results support this claim:
Grameen Bank has today over 7.5 million borrowers. 65 percent of them managed to clearly improve their socio-economic conditions and lifted themselves out of extreme poverty.
Professor Yunus has written two books about the bank and his theories of a more broadly defined capitalism - Banker to the Poor and The Poor Pay Back.
Professor Yunus and the Grameen bank won the Nobel Peace Prize in 2006. Yunus won the US Presidential Medal of Freedom in 2009.
The bank's website has a wealth of information about its history, principles for lending, FAQs, and results.
I would like to invite Professor Yunus to my soiree.