Grameen Bank

About Grameen Bank

Grameen Bank, founded by Muhammad Yunus in 1983, pioneered microfinance and microcredit. Grameen made small loans, averaging 100, to poor women in Bangladesh without requiring collateral. The bank used group lending where borrowers formed support groups. Grameen achieved repayment rates of over 97 percent, challenging the assumption that poor people were bad credit risks. Yunus and Grameen Bank received the Nobel Peace Prize in 2006. The microfinance model spread globally, with mixed results. Critics argued that microfinance did not significantly reduce poverty and could trap borrowers in debt cycles. Yunus had conflicts with the Bangladeshi government over governance of Grameen Bank. Despite criticism, Grameen transformed thinking about financial inclusion.