how microfinance can help in upliftment of rural economy -- the story of grameen

As we were discussing the concept of microfinance and how it can help in upgrading rural living standard in general, and infrastructure in particular, i thought of sharing some more details about grameen, the most famous success story in this field.
Mohammed Yunus, Nobel Laureate, started this venture in Bangladesh, one of the poorest countries of the world, back in 1974, 3 years after the country's independance, by giving a loan of 27US$ to 42 families to create small items for sale The bank began as a research project by Yunus to test his method for providing credit and banking services to the rural poor in order to reduce the rampant rural poverty in Bangladesh. It was a huge success and in 1983 it was transformed into an independent bank
Grameen is best known for its system of solidarity lending.The system is the basis for the microcredit and the self help group system now at work in over 43 countries. Although each borrower must belong to a five-member group, the group is not required to give any guarantee for a loan to its member. Repayment responsibility solely rests on the individual borrower, while the group and the centre oversee that everyone behaves in a responsible way and none gets into repayment problem. There is no form of joint liability.
Grameen's track record has also been notable, with very high payback rates—over 98 percent of 5.72 billion US$.More than half of Grameen borrowers in Bangladesh (close to 50 million) have risen out of acute poverty thanks to their loan, as measured by such standards as having all children of school age in school, all household members eating three meals a day, a sanitary toilet, a rainproof house, clean drinking water and the ability to repay a 8 US$ a week.
Another accomplishment is that among the 6.67 million borrowers, 97% are women. Thus grameen has also been effective in bringing in sort of a social reform movement.
At present Grameen has grown a family of enterprises including Grameen Trust, Grameen Fund, Grameen Communications, Grameen Shakti(Grameen Energy), Grameen Telecom, Grameen Shikkha (Grameen Education), Grameen Mothsho (Grameen Fisheries), Grameen Baybosa Bikash (Grameen Business Development), Grameen Phone, Grameen Software Limited, Grameen CyberNet Limited, Grameen Knitwear Limited, and Grameen Uddog which are all working in different sectors of rural infrastructure developement. In 2005, it went public with Grameen mutual fund one. The model is also being replicated in other countries by Grameen foundation.

for more, visit
http://www.grameen-info.org/