Chapter: 01

1. Introduction

Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the overall development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder."

As of October, 2011, it has 8.349 million borrowers, 97 percent of whom are women. With 2,565 branches, GB provides services in 81,379 villages, covering more than 97 percent of the total villages in Bangladesh. Nobel peace prize 2006 winner Grameen Bank is the result of innovative thinking of Dr. Muhammad Yunus. First time Dr. Yunus introduces the new conception of micro-credit to remove poverty. In 1976 starting from Jobra village now Grameen Bank is the world famous micro-credit lending leading organization. Grameen Bank and the concept and methodology of micro-credit that it has elaborated through its 35 years of work, have contributed to the enhancing the chance of peace by reducing poverty.

Grameen Bank is working from 1976 as a project and since 1983 as a formal bank in rural areas of Bangladesh. It is trying to reduce poverty from country by lending micro credit to the poor people of villages especially poor women who are mostly deprived of rights. They are the poorest of the poor in society. Grameen Bank is lending money to them to make them self sufficient and developing their capacity to do economic work and play a role in country?s growth. Women taking loan and developing their economic conditions are now being empowered in national social and politico-economic aspects in Bangladesh. Grameen Bank mission is to establish gender justice by developing economic conditions of poor rural women.

1.1 Scope of the Study

During the period of my involvement as an internee in Grameen Bank, Head Office, Mirpur-2, I have worked at the International Program of the Head Office through my internship and tried to observe overall banking operations and other day-to-day functions in the Office. For the purpose of getting relevant information for my study I frequently have to visit various branch offices of the bank, and I got cordial cooperation as well as provided with necessary information when needed. Although all the employees of the Head Office were very much busy with the excessive workload they provide me necessary information also. Since my work is partially survey and analysis based, I have used practical experience and, some questioner analysis techniques, for preparing this report.

1.2 Methodology

The following methodology will be followed for the study based on observation and interpretation. Data sources are scheduled survey, informal discussion with professionals and observation while working in different desks. This report is mainly of a descriptive nature. Both primary and secondary sources were selected for the basic research purpose. In addition, everyday interaction with the employees of the company has proved to be an extremely effective source and method of retrieving information. For general concept development about the bank short interviews and discussion session were taken as primary source. This report is based on my internship experience in Grameen Bank for 12 weeks. My internship was combination of practical and theoretical experience. Practically I attended many meetings on Grameen Bank activities and Grameen families. I personally talked to many borrowers during field tour. I also studied and used Grameen Bank head office main library which has a collection of huge book on credit and microcredit. I tried to reflect those on my report.

1.3 Data collection techniques

Primary Data Collection

Primary Sources:
- Discussion with Bank Officers.
- Personal observation.
- Desk work

Secondary Data Collection

Certain data for this report has been extracted from secondary sources, since the descriptive nature of the study to prepare this report calls for existing facts and information compilation. Secondary information was collected from following ways.
- Annual Reports of Grameen Bank.
- Various books, articles, compilations etc.
- Different Statements.
- File Balance sheet and various documents.
- Various books regarding Micro Credit functions.
- Also from the web sites Grameen-info.org

Data Processing: Collected information is processed by the use of computer system. Detailed analysis, working variables and working definitions are embodied in the report.

1.4 Rationale of the study

In order to fulfill the requirement of the Internship program I chose Grameen Bank. The International Program Departmen of Grameen Bank placed me to its Mirpur Head Office. The International Program Department of Grameen Bank also assigned me a topic of the report to be submitted .The topic of my report is “Grameen Bank and its Microcredit Operation”. I have done my internship at Grameen Bank, Head Office, Mirpur-2. During this period I tried to get familiarize myself with the theoretical concept and practical process of Grameen Bank.

1.5 Objective of the Study

Objective of my study is to complete my BSS graduation course. Grameen Bank is leading micro credit lending organization and pioneer of micro credit in Bangladesh. It is trying to expand this idea to all over the world. World community has accepted this model and recognizes that it might be a best alternative option to eradicate poverty from poor counties. Dr. Yunus believe that micro credit can send poverty into museum. This objective is basically met by remaining attached with a reputed organization and by gaining some real life experiences, so that it adds value to the knowledge base of me BSS graduate. In case of this report, the objectives are:

- To observe and understand the activities of the different departments of the host organization: Grameen Bank.
- To identify the customers demand to Grameen Bank.
- To identify the customers perception Grameen Bank
- To identify the quality of services compared to other Banks.
- To submit a report, for the fulfillment of my Internship course.
- The main objective of this report is to find out the “Grameen Bank”
- To gather comprehensive knowledge on overall banking functions.
- Identify the factors contributing to the attractive and operative performance of the local branch of the bank.
- Critically analysis the functions and operations of each level of the organization of Grameen Bank
- To prevent current observation and unique aspects of the bank

1.6. Major duties and responsibilities

Major duties and responsibilities includes two tours to branch offices to gather practical experience about Grameen Bank about its activities since this is named after village or rural area so its activities is based on village level. It has no branch in city or town. There are two tours including one-day trip and over-night trip in Grameen Bank internship schedule. One-day trip is to a Grameen Bank branch nearby Dhaka. The other is for one week trip to county-side long distance from Dhaka. It also covers many meetings in head offices to know the feature of villages all over the country. Meetings also held in Grameen Bank sister concerns including Grameen energy, Grameen fund, Grameen trust, Yunus Center, Grameen-Caledonian Nursing College etc also Gathering knowledge about Grameen Bank loan projects, education aid to Grameen Bank member children. It is scheduled to visit Grameen Bank sister concerns and Grameen families for twelve weeks intern schedule.

Taking interviews of Grameen Bank different types poor members who took different types of loan such as basic loan, micro-enterprise loan, higher education loan, housing loan etc. sharing with them about their achievements and wants after taking loan from Grameen Bank.