The world was a bunch of villages, to begin with. Each village was defined by their climate and resources which made them distinct from one another. Now, the picture of the world is portrayed by countries and metropolitans. There is very less mention about villages though even today they account for a majority of the world population.
In Bangladesh, there was a small village named Jorba where people lived in poverty and relied on money lenders for capital to start a business. The interest to the money people receive was really high leaving them with little profits. Banks did not grant loans to these people as they did not have any collaterals. A man named Muhammad Yunus in an act of helping these people started experimenting by lending money to them without any interest. Over time he studied the village carefully. People had aspirations to work hard and live a better life. They only did not have a capital, to begin with. He started looking for a long term solution and introduced a “Grameen Bank” to give money to the people of the village without any collateral. The bank requires people to form into groups of five out of which loan will be given to two of them who upon repaying a certain amount will make the other people in the group eligible for availing a loan. The bank requires a weekly payment and the defaulters lose an opportunity to avail a new loan in future. Over time, the bank was able to function just based on the interests they receive from the loans.
This was a simple and local solution that worked. It empowered people to pursue their dreams. Be it establishing mills, doing farming, starting a small scale venture, the villagers of Jorba were able to live on their own and come out of poverty. This model was an inspiration to expand Grameen Banks to all over Bangladesh and to other parts of the world. Grameen Bank is not a charity, rather is a tool to empower villagers with capital to be innovative, self-reliant, and bring themselves out of poverty.
Is this solution applicable to other parts of the world? The spirit of the solution, absolutely yes. Every village in this world has different needs. The bank was successful due to its trust in villagers who collectively worked for their own prosperity. Trust has been a way of life for villagers since age-old days. Even the villages in developed countries fall in this bucket and will prosper with a Grameen Bank. However, every village needs customisation according to their requirement. Providing villagers with a roadmap in establishing one and monitoring the banks till they sustain can improve the standards of living. More prosperity and opportunities in the villages will also reduce migration to cities and decrease urban poor.
However, Grameen Banks are not sheltered from failures. They are vulnerable to corrupt management, biases, and political decisions. The solution fails when the bank deviates from its original mission. Grameen Banks can be effective only when their ways and means are simple and understandable to people. For the word to reach people, there should also be a focus on publicising the types of support provided by the bank. Grameen Bank is a local solution that can be replicated at a global scale. This bank has the potential to empower people to achieve their full potential.
Right tools provided in the right way at the right time can bring the right change.
Vineesha Badabhagni 
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