Learning About Microloans And World Peace At Grameen Bank

November 15, 2006

Saira and Maisha, both Exeter students, with Nobel Peace Prize-winner Mohammed Yunus

A visit to an elementary school in a Bangladesh village brought many smiles

When the Nobel Peace Prize was awarded to Mohammed Yunus, the economist professor and founder of Grameen Bank, Saira and Maisha, an upper and lower (respectively) from Exeter, NH, knew that their summer work had made them part of history. They had spent internships at Grameen Bank in Bangladesh, working with the Nobel Peace Prize-winner who had initiated a micro-loan program to enable the poor of Bangladesh to start their own businesses.

“We go to Bangladesh every other year to visit our family, and we were considering starting an education club to sponsor Bangladesh students and pay for their school expenses. We want to promote the value of education and its importance to kids in Bangladesh. For example, $750.00 is about 50,000 taka (Bangladesh currency), and that will cover schools supplies for a student’s entire educational life. Scholarships will provide students the necessities.  

We got our idea from our uncle, who sponsors a student’s education expenses in Bangladesh and from working with the Girls Learn International chapter here on campus,” says Saira.

They contacted Grameen Bank in Dhaka, Bangladesh to learn how they could set up a scholarship. Bank officials were interested in talking with them more and arranged a meeting. Together, the girls and the bank decided doing an internship would be the best way for them to learn more about the bank and its programs to fund and support education.

The girls worked in Yunas’ offices and with his staff. “There are literally thousands and thousands of branches all over Bangladesh, many in the hundreds of rural villages all over the country,” says Maisha. “We visited several dozen of them.”

During their five weeks with the bank, Saira and Maisha studied the institution’s history, policies and practices and examined case studies. They went on field trips, visiting applicants’ homes and elementary schools; interviewed bank customers and employees, and learned about customers’ needs and bank services. They observed the loan process and reviewed required paperwork for applicants. They also learned more about Shikkha, the education arm of Grameen established to promote mass education in rural areas, and provide education loans and grants.

“This was really a fun and interesting experience. I enjoyed going out to the villages and interviewing the customers. And seeing the little children at school was the best part. The kids were so happy to be in school,” Maisha says.

At first, it was difficult for her to accept the bank’s practices. “The loan process is really based on trust—there’s no collateral. Borrowers are loaned say, $200, and then make weekly installments until the loan is paid off,” she says. “It sounds like it wouldn’t work but it does and it has been. It’s a crazy idea when you think about it. Someone says, ‘Let’s give loans to all these poor people,’ and they do and the loans are paid back.”

The sisters were also quite impressed with the number of female borrowers. “The fact that 96 percent of the borrowers are women really surprised me. And the women who take out these loans all have small businesses and more than 98 percent of the loans are paid back,” says Saira. “That was really amazing.”

But it is more than just loans. Grameen’s impact on the communities of Bangladesh is long lasting. “The micro-loan concept is really helping to make a profound change to the social structure in Bangladesh. Having a profitable business in the household helps to keep peace in the home; and women who bring money into their homes provide a considerable contribution to the family,” Maisha says.

Saira adds, “Grameen is about eradicating poverty throughout Bangladesh, India, and the world.”

The girls hope to return to Grameen next year to continue learning and working with the people of Bangladesh. “We still plan to create our club, and we plan to hold fundraisers to get the money for scholarships,” Maisha says. “Working at the bank again will give us more knowledge and more experience. We’re looking forward to going back.”