Started in 1976 by Professor Muhammad Yunus with a mere $27, Grameen Bank has been a model for microfinance institutions around the world. In 2006, Professor Yunus and Grameen Bank jointly received the Nobel Peace Prize. President Barack Obama awarded Professor Yunus the 2009 Presidential Medal of Freedom. He received the Congressional Gold Medal in 2013.
Although we are independent organizations, Grameen Foundation and Grameen Bank maintain an enduring relationship. Grameen Foundation founder Alex Counts trained under and worked closely with Professor Yunus during his six-year tenure in Bangladesh. Professor Yunus was a founding member of Grameen Foundation’s board of directors and currently serves as director emeritus.
Grameen Foundation seeks to further the Grameen Bank legacy and objectives by supporting microfinance institutions and poverty-fighting organizations that embody its vision and values on a global scale. More on Grameen Bank at www.grameen.com.
Since 2010, there have been stories and allegations about Grameen Bank and Professor Yunus. This fact sheet provides an overview of events, as they have happened, and important background information.
Since 2003, Grameen Foundation has supported microfinance across the Middle East and North Africa region as a means of creating opportunities for the area’s poorest, especially women. In 2007, we collaborated with Bab Rizq Jameel Limited, a subsidiary of the Abdul Latif Jameel Group (ALJ), to found Grameen-Jameel Microfinance Limited (Grameen-Jameel). Headquartered in Dubai, Grameen-Jameel is a joint venture company that oversees all regional activities for Grameen Foundation. Modeled after the social business concept championed by Professor Muhammad Yunus, the company reinvests profits into the business rather than distributing dividends, which keeps capital flowing into the hands of borrowers who need it.
In India, the demand for microfinance in poor communities far exceeds its supply. More than 65 million poor households have no access to microfinance, which is largely due to an ineffective delivery of financial services to them. The poor continue to lack access to formal credit and have mainly relied on informal sources to meet their needs. Microfinance institutions (MFIs) are trying to bridge the gap between demand and supply but they have been unable to get adequate capital.
Grameen Foundation saw this gap in service and resources as an opportunity to create an intermediary — an innovative approach to supporting the growth of MFIs. In 2008, Grameen Foundation, IFMR Trust and Citicorp Finance India Ltd. formed Grameen Capital India Ltd. (GCI). Its mission is to tap affordable capital for MFIs through groundbreaking financing initiatives. By opening doors to affordable capital, MFIs and other poverty-focused organizations are now able to grow and serve more of India’s poor, especially women. GCI’s success has surpassed expectations. In about four years, it has generated more than $127 million in financing for Indian MFIs, which will fund more than 1 million microloans for poor people that country.
Nobel Peace Prize winner Professor Muhammad Yunus, founder of Grameen Bank and microfinance revolutionary, recognized the important role GCI plays in reaching India’s poor communities. “Local banks cannot lend to MFIs because MFIs cannot provide collateral,” he wrote in his book,Creating a World Without Poverty. “However, if an international or domestic organization steps forward to act as a guarantor, local banks are happy to provide the money. This is a market-based solution already being practiced by such organizations as Grameen Capital India.”
Though Grameen Foundation is an independent organization, we share a philosophy of empowering the poor with other Grameen-related organizations and entities connected to Professor Muhammad Yunus. We have compiled a listing of the most active organizations to highlight the work they do across the world.