The Secrets of Success: the Egrameen Bank Experience in Bangladesh

L east asia Labour mand Managementd in Development JouJourJour r nalnanal l Volume 2, Number 1

The secrets of success: the EGrameen Bank experience in Bangladesh

Abu Elias Sarker 99-2

Asia Pacific Press at the AUSTRALIAN NATIONAL UNIVERSITY http://ncdsnet.anu.edu.au The secrets of success Abu Elias Sarker

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ISSN 1443–6698 ISBN 0 7315 3670 3

Abu Elias Sarker is currently Assistant Professor of Public Administration at the University of Sharjah, United Arab Emirates. He has also worked as a faculty member at the University of Dhaka, Bangladesh and University of South Pacific, Fiji Islands. His areas of research interest include public sector reform, state and rural development, NGOs and rural service provision, governance and development, and decentralisation and local government.

Abbreviations HYV high yield variety NGO non-governmental organisation

Labour and Management in Development Journal, Volume 2, Number 1 2 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker

Bangladesh, like many developing significantly. It is quite evident that the countries, has a vast rural society which adoption of the technocratic growth strategy, accounts for about 85 per cent of the total which was basically directed towards population. The majority of the rural industrialisation and held little regard for population, particularly women, is subjected the rural economy, resulted in expanding to severe poverty, inequalities and bureaucracies and marginalisation of the unemployment. In spite of decades of state rural poor. Profound inter-regional and intervention, no substantive changes in the inter-class disparities were observed in socioeconomic conditions of the rural poor many developing countries (Griffin and have taken place. This paper argues that Khan 1982; Lea and Chaudhri 1983). As state development agencies have inherent gross national products increased so did institutional constraints which deny poor poverty, inequality and unemployment. people access to development resources. Since the early 1970s, however, international Thus, on account of the constant failure of agencies and national governments have the state to act in favour of poor people, begun to adopt a new policy framework alternative institutional frameworks are now (Chenery et al. 1974). Harsh realities being adopted for rural development. The prompted many national governments to Grameen (Village) Bank is a well-known choose policies, strategies and approaches institutional framework that has achieved to rural development, that could help considerable success in improving the ameliorate the often appalling living socioeconomic conditions of the rural poor, standards of the rural poor. particularly women, in Bangladesh. Based Bangladesh has been striving to bring on the author’s personal experience as well about improvements in the quality of life of as secondary materials, this paper identifies the rural poor. Many different institutional organisation and management as critical approaches have been pursued over the variables in the process of rural years to promote rural development development in Bangladesh. The most activities (Wood 1984). These approaches important factors behind the splendid and developmental bureaucracy have failed performance of the Grameen Bank are its to ensure that the poor can access state unique decentralised organisational development resources. Since colonial times, structure, client-centred delivery system, local government offices have done very vision, management culture, and human little to stimulate rural development. resources management. Instead, the rural élites, having asserted their Most countries in the developing world dominance over local government offices, have unequivocally accepted the reality that have misappropriated public resources no meaningful development can take place earmarked for rural development. Similarly, in any country unless the standard of living various local-level nation-building of the poor is raised. This idea came to the establishments have not had any substantive fore because purely growth-oriented impact (Feldman and McCarthy 1984; Sarker strategies failed to improve the living 1991). Increasing attention is now being paid conditions of the majority of the people to alternative institutional frameworks that

Labour and Management in Development Journal, Volume 2, Number 1 3 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker have established their credibility in who were already well off. In this context, stimulating rural development in Professor Yunus contemplated an alternative Bangladesh in recent times (Chowdhury institutional framework that could be used 1989; Asian Development Bank 1993; Sarker to raise the wellbeing of impoverished 1996; Rahman, M.H. 1999; World Bank 1996). sections of society (Yunus 1990; 1993; 1994a; The Grameen Bank is an alternative 1994b). After experimenting on a personal institutional framework for rural basis, he undertook a small research project in a village near the Chittagong University. development in Bangladesh, which has The project went on to test the hypothesis achieved considerable success in improving that, if financial resources were made the socioeconomic conditions of the rural available to the poor at reasonable terms and poor. This bank is exclusively for poor conditions, the poor could generate people and it is directly owned by them as productive employment without external well. The government has very little material assistance. The pilot experiment was stake in the bank—it owns 10 per cent of the successful and the project was extended to bank and has three nominated members on other areas. In 1983, a government ordinance the Board of Directors. The bank itself enjoys transformed the project into the Grameen full autonomy in discharging both its policy Bank, a specialised financial institution for and operational responsibilities. Until the rural poor (Yunus 1994a; Hossain 1988). recently, however, the Grameen intervention The Grameen Bank is now a very distinct was still considered an activity of the state, poverty-alleviation organisation aimed not the poor. exclusively at the poor. By definition, it is This article analyses the factors purely a bank and provides banking services underlying the success of the Grameen Bank, to the poor. Although it is a poverty- paying particular attention to organisational alleviating organisation, it is designed to run and management issues. It finds that the on commercially viable terms. It extends Grameen Bank’s unique decentralised credit to the poor to invest in productive organisational structure, client-centred areas such as processing and manufacturing, delivery system, vision, management agriculture and forestry, livestock and culture, and human resources management fisheries, services and trade. Although its are the most important factors in the bank’s primary responsibility is to provide credit, splendid performance. it has involved itself in different social development activities as well. Grameen’s The Grameen Bank model of rural ‘Sixteen Decisions’ signify its concern for social development (see Appendix A). In development fact, one author has called the Grameen The Grameen Bank (henceforth abbreviated Bank a socially conscious capitalist as Grameen) was the brainchild of Professor enterprise (Bornstein 1996:344). Briefly, the Muhammad Yunus. He observed that Grameen Bank’s main objectives are to conventional banking practices had in-built • extend banking facilities to poor men and constraints and were aimed only at those women.

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• eliminate the exploitation by money- The impact of Grameen Bank lenders. intervention • create opportunities for self-employment Some scholars have raised concerns about among Bangladesh’s vast and under- utilised manpower resources. the efficacy of the Grameen model to ensure the economic emancipation and • bring disadvantaged people within the empowerment of women (Kabeer 1995; folds of an organisational format that Todd 1996; Wood 1994; Goetz and Gupta they can understand and operate, helping them find sociopolitical and 1995). Despite such criticisms, there are clear economic strength through mutual positive impacts of Grameen intervention support. upon the economic as well as sociopolitical condition of the rural poor. • reverse the vicious circle of ‘low income, low savings, low investment, low A significant aspect of Grameen income’, changing it into an expanding intervention is the involvement of women system of ‘low income, credit, in self-employment. Hossain’s study (1988) investment, more income, more credit, shows that the average worker was more investment, more income’ (N. employed for six days per month prior to Rahman 1993:70–71). joining the bank, but access to Grameen As of December 1999, 1,149 Grameen activities increased their employment to 18 Bank branches were operating in 39,706 days per month. Other studies corroborate villages with 67,691 centres. There were this finding (Bangladesh Institute of 2,357,083 members, of which 2,234,181 were Development Studies 1985; Todd 1996). female and 122,902 male (Grameen Bank Along with employment, productivity has 1999). Thus, the majority of the members are also increased. Alam (1988) argues that female. This is not surprising— Grameen members’ increased productivity policymakers at the Grameen Bank have was due to their adoption of High Yield repeatedly emphasised the importance of Variety (HYV) crop production. involving poor rural women in productive Daily agricultural wage rates have also activities. Among poor people, women have increased by 30–40 per cent in the areas of generally suffered the most (Government of high Grameen and other NGO activity Bangladesh 1995). In December 1999, the (Safilios-Rothschild and Mahmud 1989). cumulative amount of money disbursed Grameen members’ contribution to net stood at US$2802 million. The amount of household income is more than 50 per cent. housing loans disbursed by then was More than half of the women surveyed have US$184 million, and the total savings in the been able to pull their families out of poverty Group Fund were US$209 million. The (Hossain 1988; Todd 1996). Once out of the recovery rate on Grameen Bank loans is poverty cycle, these women focused on asset outstanding—almost 98 per cent. Grameen building. This was further augmented by the has now become a gigantic institution with provision of housing loans to the poor. nearly 13,000 employees working at Housing is not just a social investment, it is different levels. also a site for production, processing and

Labour and Management in Development Journal, Volume 2, Number 1 5 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker storage, thereby contributing to increased (1993) has shown that the opportunities productivity. Moreover, these housing loans created by the Grameen Bank have made a provide women with legal rights to the land major contribution to women’s power in and the house (Islam et al. 1989). family decisionmaking. There is also Enhanced economic wellbeing has also evidence that women’s participation in prompted the women to get involved in groups gives them confidence and support, social development activities (Khandker et which enables them to assert their rights to al. 1995). It is no surprise that a wide range economic assets (Safilios-Rothschild and of tangible benefits have been found in the Mahmud 1989). Ahmed (1985) found areas of health and nutrition, manifested in evidence that physical violence and other adequate calorie intake, higher child verbal abuse against women decreased as a immunisation rates, increased use of family result of Grameen Bank activity. Helen planning practices and so forth (Rahman et Todd’s empirical study reveals that Grameen al. 1993; Bornstein 1996; Todd 1996; Schuler Bank intervention has helped develop and Hashemi 1994; Schuler et al. 1997; happy partnerships between husband and Hossain 1988). wife in terms of decisionmaking regarding family affairs (Todd 1996). Schuler and Grameen Bank intervention has also Hashemi’s (1994) study reveals increased reduced its members’ dependence upon the mobility and decisionmaking capacity rural power élites. First, they no longer need amongst Grameen Bank members. If we put to go to the rich for economic help. Second, all these variables together we can say that they do not need the mediation of the rural Grameen Bank intervention has given many élites in dealing with Grameen, which they women a sense of empowerment (Hashemi needed in the past when interacting with et al. 1996; Counts 1996). government offices. Third, since their participation in state-sponsored rural development programs is minimal, they can Grameen’s organisational system keep themselves aloof from the formal The main factor behind the Grameen Bank’s power élites in the rural areas. Fourth, when success has been the way it is organised and poor people are less dependent on the rural managed. Grameen’s organisational system élites, they can exercise their voting rights and associated practices have evolved over independently. It is apparent that the the years in response to the specific expansion of Grameen Bank and other non- developmental needs of the target group governmental organisation (NGO) operations (Shams 1992). There are fundamentally two should have a positive impact upon local aspects of the organisational intervention of governance in general and the rural power the Grameen Bank—the delivery system and structure in particular (Wahid and Rahman the receiving system. At the receiving end, 1993; Sarker and Rahman 1999). there are groups and centres, and the The status of women has also been Grameen Bank’s own delivery system improved through their fruitful comprises branch offices, area offices, zonal participation in Grameen activities. Mizan offices and the head office.

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Relations between the group and centre While the organisation of the poor is remain the most important institutional mainly at the village level, the formal device for organising the operating units to apparatus of the Grameen Bank operates at carry out designated activities. Organising different levels right from the village to the the groups and federating them into centres capital. Unlike government organisations, are considered the building blocks of the however, it basically has a decentralised Grameen receiving system. Interested structure, which has been developed over persons, poor people with no assets or assets the years through trial and error in response not exceeding the value of half an acre of to the needs of the clientele. cultivable land (per family), are asked to At the bottom of the Grameen hierarchy form groups of five like-minded people of is the branch office, which is considered the similar economic standing who enjoy main operational organ of the bank. It is mutual trust and confidence. A group can basically a profit-responsibility unit. It have only one person from any particular serves a cluster of 120–150 centres. It is household and relatives must not be in the staffed by a manager, six or seven workers, same group. Groups have either male or two to three trainee workers and an female members, not both. The group accountant. The second tier is the area office, members select a chairperson and a which looks after the operations of about 10– secretary, and these positions rotate among 15 branch offices. The zonal office, located members on a yearly basis so that all in the district headquarters, is at the top of members have the learning experience that the hierarchy at the field level. It is a support accompanies the responsibility of these organisation and it looks after the activities positions. The chairperson is responsible for of the area offices. The zonal manager is discipline in the group and for supervision responsible for handling accounts and of loan utilisation by the members. Members managing funds and has also assumed conduct business with a bank worker, responsibility for monitoring, evaluating through the chairperson, at weekly meetings that all members are obliged to attend. and supervising the social development programs. A centre is a federation of a number of groups. Weekly meetings are held at the The head office is a secretariat or centre level. The group chairpersons elect information-clearing house. It is responsible the chief and the deputy chief of the centre for monitoring and evaluation, research and for a one-year term. This person is required development, supervision of training, and to ensure attendance at the general meetings, similar activities that benefit from access to payment of instalments, and overall information from different operational areas. discipline of the centre members. Bank The 1986 amendment of the Grameen workers attend the centre meetings, and all Bank Ordinance provides for a board of bank business is conducted openly in front governors composed of 13 members—nine of the members (Hossain 1993:13). selected from among the borrower-

Labour and Management in Development Journal, Volume 2, Number 1 7 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker shareholders and four appointed by the Then the members attend a training session government. The board approves bank of at least seven days given by the bank policies and serves as the link between the workers. During the training session, the bank, the Ministry of Finance, and other members are apprised of different aspects of government organisations. Grameen activities, including the rules and The Managing Director is the chief regulations of the bank, responsibilities of executive of the bank. The Managing the chairperson, the centre chief and others, Director is responsible for the overall group savings, insurance, learning to sign, implementation of the policies and has to and social development activities. When the maintain close contact with various bank worker is convinced that the members departmental heads in the head office and understand the operational aspects of the zonal managers to assist in formulation and bank, the group is given formal recognition. change of policies. In an emerging Not all members are given a loan at that organisation like the Grameen Bank, time. Only two members are given loans. If however, the Managing Director often does they pay the instalments regularly during more than what his job description the observation period of 6–8 weeks, two stipulates. In the Garmeen Bank, the other members are also given loans. The Managing Director pays periodic visits to chairperson is the last person to receive a the field at different levels, attends loan. The procedure is simple and takes only workshops, and also maintains close contact 1–2 weeks from the initiation of loan with key figures in the government. proposal to the disbursement of loan money. The borrowers are not burdened with Mode of operations complicated forms to fill out. Loan sizes are modest, ranging from taka (the Bangladeshi Grameen Bank has developed distinctive currency) 3,000 (US$75) to taka 10,000 practices in delivering its services to the (US$250). The borrowers invest the loan in poor. There are specific eligibility criteria, the area of their choice. It has been found which exclude the non-poor from accessing that, in terms of the skills and the market Grameen Bank services. In delivering credit, for inputs and products, the borrowers are priority has been given to women, who are generally already familiar with the activities considered the most vulnerable group in which they want to invest. Consequently, amongst the poor. The delivery system has the bank workers do not have to provide any been designed to meet the diverse sort of training in relation to the choice of socioeconomic needs of the poor. business. But there is a strict monitoring Unlike the bureaucratic government process. The group chairperson and bank machinery where the clients have to come worker monitor borrowers to see whether for services, Grameen officials go the clients. they are utilising the money properly. When a group is formed, it is kept under The centre is the main place where observation for a month by a bank worker important organisational activities take to see whether the members conform to the place. Several groups meet together weekly, rules and norms set by the Grameen Bank. and bank workers also attend. All loan

Labour and Management in Development Journal, Volume 2, Number 1 8 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker proposals are openly discussed, repayments will be recovered. Members face are made, and compulsory saving deposits considerable pressure from other group are accepted at the weekly meetings (Barua members when they fail to pay their 2000). instalments to the bank. This is because No collateral is required for a loan. What failure to pay by any member will directly is required is compliance with the rules and affect the ‘fortunes’ of the other members of regulations of the bank. The loan has to be the group. And, by extension, any default repaid in 50 weekly instalments. Borrowers in payment by a group will also directly are not eligible for more loans if they have affect the centre to which group belongs. If not paid off their current one. Each member a member has a genuine problem in must save one taka every week in addition repaying instalments, other members can to 5 per cent of the loan amount, and the provide assistance. If the entire group faces savings are accumulated in the group fund. the similar situation, the centre takes the The total amount is deposited with the burden (Barua 2000). Grameen Bank at 8.5 per cent annual interest. A member can borrow from the The distinctiveness of Grameen group fund for consumption at times of organisational intervention sickness or social ceremony. With the The Grameen Bank has generated a great consent of the group, group funds can also deal of enthusiasm among academics, be used for further investment. The loan is development practitioners and international interest free. When leaving, borrowers can aid agencies. Following previous withdraw the total savings but not the experiences of rural development in compulsory contribution of 5 per cent of the Bangladesh, many argue that small-scale loan amount, this is non-refundable and is activities, close supervision, the dedication popularly known as group tax. The group of the bank staff and, above all, the fund is also a mini-bank. It has grown over leadership of the founder, Muhammad the years and today represents a substantial Yunus, are the determining factors for the resource for Grameen and its members. The apparent success of the bank. I have, members also have to pay a fixed charge of however, tried to determine the factors taka 5 per thousand for loans in excess of beyond this orthodox view. Grameen’s one thousand taka (Barua 2000). unique organisational and management It is unusual in general banking practice practices and enormous institutional to provide loans without any collateral. This strength have contributed most to its success was the challenge for the architects of the in delivering services to the poor. Grameen’s bank—ensuring that banking services can unique strategic positioning has helped. Its be provided without asking for collateral. organisation and management are carried Material collateral has been replaced by out differently from to those of its rivals, social collateral. Here the group acts as the such as government commercial banks and collateral for the loan. Thus, as long as the other non-governmental organisations. Its group exists, there is every chance that loans vision, organisational structure,

Labour and Management in Development Journal, Volume 2, Number 1 9 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker management culture and human resource Grameen employees as responsive, practices are particularly noteworthy in this committed, and productive teams (Barzelay respect. 1992). On the other hand, Grameen members enjoy substantial latitude in utilising funds, Vision with little control over their production The most important aspect of Grameen activities by management. The structure of intervention is that the vision of a poverty- control is essentially decentralised, free society expounded by the Grameen participative, and democratic; it emerges not leadership has been fostered among the from the higher echelon of the organisation important stakeholders—management, but from the concerted actions of members, operating staff and bank members. They all based on the philosophy, values or corporate share the same vision and values. This vision vision provided by the top management has enormous impact upon the (Auwal 1996). organisational functioning of the system. All the stakeholders are convinced that poverty Management culture is a man-made phenomenon exacerbated by The bank has developed a unique the prevailing institutional forces. Poverty management culture, based on people’s could be eradicated if concerted efforts were capacities, learning and innovation, taken. This particular vision is really the transparency and openness, honesty and so driving force for the whole Grameen family forth (Holcombe 1995). This has provided a to work with dedication, mutual trust, a framework through which all organisational sense of accountability and creativity. activities are regulated. Decentralised structure The groups and centres have their own Grameen’s organisational structure is highly identity. At the same time, they work with decentralised. Authority is devolved to the the Grameen bureaucracy in a very field level where the actual work of planning integrated way. An institutional fusion has and implementation takes place. The head emerged between the groups and centres office seldom interferes in plans devised by and Grameen’s management. the field offices. The field offices are also Trust of staff and clients has allowed the encouraged to send monthly reports directly management to devolve basic to the Managing Director summarising decisionmaking authority to operational different aspects of their work. The levels, of which both staff and clients are the Managing Director, with the aid of other essential parts. Grameen organisational colleagues, reviews these reports and boundaries are permeable; clients are publishes significant issues, concerns, and effectively brought into the organisation to suggestions identified by them in Grameen’s monitor and be held accountable for loans internal monthly magazine, which reaches and other functions. The head office bears all bank officials and workers (Auwal 1996). little responsibility except for strategic issues These methods of communication provide such as basic policies and research and fora for dialogues that seek to empower development (Jain 1996; Holcombe 1995).

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Grameen’s belief in openness and Hossain 1988). Along with this, both transparency is manifested in its actions. All employees and beneficiaries of Grameen can banking transactions are carried out in front sense empowerment (Hashemi et al. 1996). of the clients and bank staff. This is made Democratic leadership practices are in place possible by both the formal and informal with the rotation among members of centre information systems. Both the systems and group leadership. At the other end, in operate in upward and downward the Grameen organisation system, the directions. classical hierarchical principle has been replaced by the modern team approach Human resource management (Hossain 1988; Rahman and Islam 1993; Grameen’s success owes much to the Holcombe 1995). outstanding performance of its personnel. There is high level of staff motivation, and Institutionalisation this is achieved largely through the It is interesting to note that, within a short recruitment and training process. From the span of time, the Grameen Bank has beginning, personnel are briefed in detail on achieved most of the features of a the necessity of hard work, staying in the professional institution. As an institution, rural areas, honesty, and sincerity. Rigorous the Grameen Bank is not the product of a field-based training is also given. It has been blueprint approach, but of an incessant found that a large number of people quit process of institution-building in response during these stages, and the bank is thus able to the demands of the political, social and to retain those who are really committed. cultural environment of rural Bangladesh. They know they will have to work hard, It has continually followed a learning- receiving the same salary as their process approach, allowing it to relate counterparts in government organisations innovation to the growing structure of but under far greater pressure. More Grameen. Institutionalisation has been importantly, unlike their counterparts, they made possible because of will not be able to misappropriate resources • the compatibility of organisational for personal aggrandisement (Bornstein objectives and the needs of the target 1996; Rahman 1993; Holcombe 1995). group Management sustains the motivation for • well-tested, easily replaceable operating effective and uncorrupted performance systems capable of achieving the under difficult rural conditions using a objectives. variety of formal and informal rewards— Like many other professional institutions, recognition of work, opportunities for rapid it has developed a unique approach to advancement, pride in being part of an running the system. Within the organisation, organisation that performs valued and a professional managerial approach is internationally-recognised work, and a emphasised, for which it has been possible sense of belonging to a distinctive group to develop managerial leadership at all (Bornstein 1996; Todd 1996; Holcombe 1995; levels of Grameen management. The

Labour and Management in Development Journal, Volume 2, Number 1 11 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker managerial structure is well-knit but not 90 per cent of Grameen’s capital. The monolithic, remaining very flexible and majority of the board members are from adaptive. Management processes, such as among the poor. They will become decisionmaking, communication and increasingly responsible for managing the leadership are all practiced contingently, bank’s policies. Once they begin to assert disregarding conventional wisdom. The their rights of ownership, policies, programs Bank’s managerial personnel are fresh and projects will further enhance the graduates without any work experience. institutional strength of the bank and the Professionalisation takes place through collective security of the shareholders extensive training and executive (Shams 1992). More importantly, Grameen development. It aims to combine theoretical appears to have contributed to local knowledge, practical management skills for institution-building, thus closing the gap application of that knowledge, and a unique between the state and local society (Snow set of professional values to motivate the 1999). In a sense, its institutional success is staff in accomplishing a challenging task a significant step forward for reinventing (Shams 1992). Grameen managers at government in Bangladesh (World Bank different levels have already demonstrated 1996; Government of Bangladesh 2000; that they are capable of planning, organising Osborne and Gaebler 1992). and implementing Grameen’s development activities independently. They have not Conclusion required any assistance from the head office. This suggests that Grameen is on sound This article has specifically paid attention to institutional footing and is likely to be the determinants of success of the Grameen sustained. Rahman, in an interesting study, Bank with particular reference to has found that the leadership, doctrine, organisation and management. It is quite program, resources and internal structure so evident that the rural socioeconomic and needed to be an institution are all present in political realities in Bangladesh are the Grameen system (N. Rahman 1993). problematic. Low productivity, inequality in Of course, the issue of sustainability is an the ownership of the means of production, intricate one. The experience so far is unequal access to public resources, evidence of the sustainability of Grameen subordination of women, dominance of as a poverty-alleviation institution. Since it usury capital and intricate power relations is meant for the poor, institutional between the rich and poor are the features sustainability ultimately depends on their of life in rural Bangladesh. State intervention collective risk-bearing capacity. Poor has done very little to ameliorate the living people’s economic well-being, conditions of the rural poor in general, and empowerment, political consciousness, women in particular. The state’s incapacity organisational strength and organised and pressure from international donor actions are the determinants of the bank’s agencies have encouraged the adoption of ultimate sustainability. The poor own about alternative institutional frameworks in the

Labour and Management in Development Journal, Volume 2, Number 1 12 © Asia Pacific Press 2001 The secrets of success Abu Elias Sarker rural development process. The Grameen References Bank, a purely autonomous financial Ahmed, M., 1985. Status, Perception, institution for the poor, came into being in Awareness and Marital Adjustment of Rural 1983 after a successful pilot project. It started Women: the role of Grameen Bank, Grameen with the simple idea that the rural poor can Bank, Dhaka. improve their socioeconomic conditions if Alam, M., 1988. ‘Special employment they are provided with financial resources. programs in Bangladesh: an evaluation In time, it has been proven that banking of major schemes’ in M. Muqtada (ed.), services can be delivered to poor people. The The Elusive Target: an evaluation of target rural poor, particularly women, have group approach to employment generation in prospered. Grameen has developed a rural Asia, International Labour unique organisational and management Organisation, Rome:37–78. system—the main factor in its success. A Asian Development Bank (ADB), 1993. An well-knit delivery system coupled with a Assessment of the Role and Impact of NGOs flat, participatory receiving structure has in Bangladesh, Asian Development Bank, made Grameen quite comprehensible to the Dhaka. members. The Grameen Bank is basically a Auwal, M.A., 1996. ‘Promoting decentralised, participatory organisation microcapitalism in the service of the where both the service providers (operating poor: the Grameen model and its cross- cultural adaptation’, The Journal of staff of the bank) and the recipients (bank Business Communication, 33(1):27–42. members) are actively involved in different Bangladesh Institute of Development types of activities. Its modus operandi is Studies (BIDS), 1985. Rural Development devoid of any bureaucratic complexities. The Study 1985, Bangladesh Institute of Grameen Bank has developed a vision, and Developemtn Studies, Dhaka. this vision has been successfully fostered Barua, D.C., 2000. ‘The creation of enabling among the important stakeholders. conditions for the poor: the experience Grameen’s management culture—based on of Grameen Bank’, Paper presented at the people’s capacities, learning and innovation, Melton Foundation Alumni’s transparency and openness and honesty— International Conference organised by remains an important cornerstone in Melton Foundation, Berlin, March 7–13. fostering trust and stimulating performance. Barzelay, M., 1992. Breaking Through Finally, the Grameen Bank has demonstrated Bureaucracy, University of California its potential to become a sustainable Press, Berkeley. institution championing the cause of the Bornstein, D., 1996. The Price of a Dream, rural poor. Simon & Schuster, New York.

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Appendix A

The sixteen decisions 1. We shall follow and advance the four principles of Grameen Bank—Discipline, Unity, Courage, and Hard Work—in all walks of our lives. 2. We shall bring prosperity to our families. 3. We shall not live in dilapidated houses. We shall repair our houses and work toward constructing new houses at the earliest. 4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus. 5. During the plantation seasons, we shall plant as many seedlings as possible. 6. We shall plan to keep our families small. We shall minimise our expenditures. We shall look after our health. 7. We shall educate our children and ensure that they can earn to pay for their education. 8. We shall always keep our children and environment clean. 9. We shall build and use pit-latrines. 10.We shall drink tube-well water. If it is not available, we shall boil water or use alum. 11.We shall not take any dowry in our sons’ weddings, nor shall we give any dowry in our daughters’ weddings. We shall keep the centre free from the curse of dowry. We shall not practice child marriage. 12.We shall not inflict any injustice on anyone, nor shall we allow anyone to do so. 13.For higher income, we shall collectively undertake bigger investments. 14.We shall always be ready to help each other. If anyone is in difficulty, we shall all help him. 15.If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline. 16.We shall introduce physical exercise in all our centres. We shall take part in all social activities collectively.

Source: Shams,K., 1995. ‘Government must side with the poor’, Public Administration and Development, 15(3):303–10.