Three Little Fingers go Pat, Pat, Pat

Kelly and I have been moving steadily through a series of interviews with Grameen’s sister companies. About two weeks ago we sat down with Qazi Nazrul Huque, the Deputy General Manager of Grameen Shikkha, meaning ‘village education”.  Similarly to the majority of those running the sister companies, he has been with Grameen Bank for 20 years and used to hold the post of branch manager in one of the villages in the south. Huque has now redirected himself and is working for early child development with Bangladesh. It should be mentioned that all Grameen Shikkha board members and executives are working voluntarily, in order to battle the devastating illiteracy rates within their country, which at a high estimate is near 70%. Now, I think that oftentimes when reading and writing about developing countries, these statistics are typically worthy of a gasp, a quick personal attempt to try and understand the consequences of such a fact, and then we move on…usually to a even worse fact. But I think few of us really sink in what that means for day-to-day functioning and the growth of a country. Can you imagine going to a store, or something much bigger such as launching a campaign for behavioral change, when 7 out of the 10 people around you have not yet learned the basic acts of reading and writing? Outdated development ‘experts’ chat endlessly about the need for infrastructure and increased exports, but what hope does a country have of achieving real growth, with 70% of its population stinted by illiteracy? It should also be noted that literacy means a person has achieved grade 5—or the education of a 10 year old. So only about 37% of the population has surpassed the education of someone who still has skinned knees.

The educational system in Bangladesh is a heartbreaking reality.  Many of the poorest families can’t even afford to send their children with books and uniforms to the free public schools; and yet, even if they were able to, most of the primary schools do not have enough materials, resources or space to accommodate all of the children that are government-mandated to attend school. We were told that most schools only have one classroom, so the majority of children have to sit outside of the building in the sun and hope to catch some fleeting substance from the day’s lesson. This is a clear cut and obvious issue. The children don’t learn well. So how could they eventually become productive members of society? Huque said that he has seen a third grade child in one of these public primary schools that could not write his name.

Here are some more biting facts, but then I’ll lift your thoughts up briefly after—promise.

14% of children do not go to primary school, which eliminates their chance of even a preliminary education

Almost 50% of children drop out before grade 5 (and we think the United States has problems with high school dropout rates)

50% of 5^th grade graduates do not go to high school, and of that 50% that gets to high school, nearly 50% of them dropout before graduation

I have yet to check the figure, but Huque told us that only 1 in 7 children complete secondary school—10^th grade—despite the fact that the government allocates a substantial portion of its budget towards education. With the population density in the country being one of the top 10 most populous places in the world, it was said that the country is having great difficulty building a sufficient number of schools to support the demand. In one square kilometer here in Bangladesh there are about 1,000 people, with a total population of I THINK 147 million. With this realization it is easier to comprehend the plight of the nation to support its youngest generation.

6 years ago, Grameen founded Grameen Shikkha which has since been trying to step up to the plate. Shikkha’s approach begins with preschoolers and parents, as they utilize a curriculum that seeks to prepare the children enough that they can better survive in primary school. In the past 2 years alone they have sent 40,000 children onto primary school, with the hope of increasing the dismal 14% of the population that are known to attend a few years ago. Huque proudly said they have developed a strong relationship with the primary schools in Bangladesh, as teachers have come to expect the students coming from Shikkha’s preschools to be well prepared and the brightest of the students in the bunch. When I asked how a pioneering financial institution had managed to delve in the field of education, Huque explained that they follow the same theories and curriculum for child development as put forth by the government and resource/research centers for child development and education within the country. They were already familiar with many of the themes as the bank has always provided training and workshops to Grameen Bank borrowers on childhood development, and sent them back to their respective villages to convey the same message to other borrowers and women.

Financed by Yunesco, a string of private donors from Belgium and the government, Shikkha employs 600 people, and has so far built 500 preschools. Acknowledging the even worse conditions within the slums, they have  begun adding to their model and have built 20 slum schools that hold 30 students each within the slums around Dhaka in 2006. Their biggest challenge at the moment is the inevitable migration of families living within the slums, causing many students to frequently drop out of the program. However their dropout rate is lightened by the explanation that many students have left to move on to primary school.

We had the privilege of visiting one of Grameen Shikkha’s slum schools today just inside Mirpur, about a fifteen minute rickshaw ride from the bank’s headquarters. It’s an odd feeling taking one of the side streets off of the main road we usually travel on, to discover a completely different world only a few buildings away. Immediately the density of bodies heightened and the paved roads turned into whirls of dirt and chicken feathers. The stench was intolerable, but not more than my desire to not look uncomfortable amidst an environment people call home. Breathing out of my mouth, we began sneaking around puddles of trash and mud, to find ourselves in the mouth of a sunlit alleyway that held the door to the one-room school building. I could already hear excited children as we rounded the corner and saw the small entranceway into a cement room that could comfortably fit about 10 rows of people. After taking off my shoes and stepping onto the matted room, the children were all patiently sitting cross-legged on the floor and greeted me with an energetic shrieking of ‘salam allikum’ . They all giggled nervously as I asked them how they were doing, in Bangla, and I received about 30 tonal variations of ‘bhalo’, meaning good. Once we were all settled, and each of the 30 students and interns rose to introduce themselves, the teacher asked the students to show us how they could write out the English alphabet in their books. They were absolutely wonderful, and a little girl next to me, who’s name sounded like Ruti, showed me the pictures she had drawn of Grameen Bank and the Bangladeshi national flag in her drawing book. The students all seemed to be really brave and excited to show off what they had learned, and different groups were selected to sing us solos—one was twinkle twinkle little star!—show us their dancing and recitations of various rhymes. As per usual in the poorer communities, we were asked to sing a song in English. We always look at each other petrified because most people don’t know the full lyrics to any song other than Britney Spears. Our new German friend Christina suggested we all just sing Jingle Bells because they wouldn’t understand what we were singing about anyways, and well, it sounds upbeat. Oh if only I could have that video recording as a virtual Christmas card this year. Absolutely unconscious of the hilarity of the selection we chose, the children bounced and moved their mouths along with ours. Christina was right, it was upbeat—until everyone drowned off and I continued alone with “DASHING through the snow”….

Spectacle aside, it was a fun morning. I really enjoyed seeing how the posters and pictures plastered across all of the otherwise dingy, peeling walls lightened the room and reminded me of a school at home. However, rather than having pictures of kitties and puppies on the wall, there were colored drawings of elephants, tigers and native birds.

There is much more to the story and structure behind Shikkha’s programs, and I could probably write a page about each of the individual children today that made a lasting impression in my mind. However, I think I will let the pictures speak for themselves, and can fill in blanks about Shikkha at a later time. Tomorrow morning we are leaving the bank around 7:30 to drive to Grameen Veolia’s water treatment plant in Goalmari, and then Kelly and I are trying to arrange interviews with Grameen’s Basic Training Program—usually offered to those professionals already replicating Grameen’s microfinance model. We’re going to try and sneak into it anyways, because it will provide more hands on experience with the bank’s accounting and monitoring systems.

Anyways, Blogspot, I’m doing really well and my spirits remain high on average. Every day I have a moment that assures me I am in the right place.

I felt really guilty about the commotion I caused for the teacher

He had the most beautiful English and asked me to take a photo of him and his little brother

The Day I Really Saw Grameen Bank

Sometimes I find myself in an internal argument: is the REAL picture of Grameen Bank in the villages, listening to the branch managers speak with devotion to their borrowers, or is it in the head office, where each of the 200 employees have at one time been a center manager and have stayed true with the organization for nearly 20 years out of a dedication to abolishing poverty in Bangladesh.

Today was another victory on the side of the head office.

Now, as many of you surely know—and perhaps more than I because my news sources are limited—the  charming and charismatic founder and Managing Director of the Grameen Bank has been under bloated fire by a trifle claim from the disrespected Bangladesh government. Despite over thirty years of hard work and concentration to alleviate the social issues in his native country, the government has officially removed Professor Yunus from his post as Managing Director, claiming that at 70 years of age he has violated his terms and wrongly surpassed the retirement age of 60. It’s disturbingly ironic that a government, that has done far too little for its own people, should chastise the first Nobel Laureate of Bangladesh for spending an extra ten years of his life formally working for betterment of the poorest of the poor. In any mindset, how could that possibly be an issue?

After following the backlash of the Bangladeshi government over Dr. Yunus’ brief sparking of a new political party , the personality and spite of politics here in this little country have been exposed to be no more mature than the drift I left on the playground in third grade. Now, politics is not my genre of choice, nor is the history of Bangladesh, so I will leave you in the hands of Wikipedia and Google to fill in the timeline and characters of its government; however, I can say, with full support from my colleagues at Grameen, and my Bangladeshi friends, that this move was made purely out of a vendetta against Professor Yunus for the seeming threat he poses to the government.  The Grameen Bank has been subjected to a full scale audit in the past month, after false allegations from a Norwegian documentary claimed that funds meant for the bank were given to one of its sister companies . These allegations were cleared on all accounts, and the government’s audit of the bank came back sparkling and without reason for further meddling—minus the age of the Managing Director.

The local newspapers here in Bangladesh, the Daily Star and the Daily Sun, can be accessed over the internet, so if you would like a more concrete description of the legal processing and timeline of what has been happening here at Grameen Bank, I encourage you to Google them and read the accounts yourself. The front pages of these papers has been following the affair quite densely since Dr. Yunus received the letter this past Wednesday relieving him from his duties. I think that these different sources, in addition and comparison to western media, will be better reads than my own reinterpretation. Amidst these articles, I simply want to capture the environment at the office these past few days.

Nearly immediately after Professor Yunus received the letter a board meeting was held and their lawyers promptly called in. Kelly, Annunciata, Cecile and I had a pre-arranged meeting with Professor that Thursday afternoon—which was both a cause of excitement and worry at wondering what on Earth we would speak with him about, merely a day after the headlines began blasting his removal. We spent the day pouring over newspapers, discussing amongst ourselves, when after 4 hours of waiting called our supervisor to confirm our strong suspicions that it was not a day for tea with the Banker to the poor. Our supervisor calmly said that Dr. Yunus was  “very busy” that day and that the meeting would be rearranged. The next morning, brash graphics of the government ousting Yunus were smeared all over the morning’s front page, in addition to photos of Professor calmly smiling while being surrounded by a cloud of lawyers and media on his way out of the courthouse the previous day. I think we can easily reconcile that he was, in fact, quite busy that day. Still though, if his post as MD is officially over, it would have been cool to be one of the last groups of people to meet him under that title. However, I keep joking with Kelly to smooth her qualms about the meeting that he will ALWAYS remain to be the founder of Grameen Bank, and a brilliant, energetic man in general.

Some of the news articles here have actually been surprisingly open and critical about the government’s move—far more than I would have anticipated. There is always at least 4 different articles on the front page about it, some of which side with the government and critique the pioneering microfinance institution itself, some which criticize the government for not handling the nation’s Nobel Laureate as deserved, and many which discuss the possible implications for relationships with the US. As Muhammad Yunus is getting much older it is understandable that he has been advised in the past to step down, and yet I think many overlook the fact that he has outwardly stated in the media many times that he has been looking for an appropriate successor, and that he hopes to make the transition as smooth as possible. Despite the childishness in escalating a retirement age, a full 10 years after it should have happened if the government was truly concerned about the legality of it, I think the most regrettable aspect of the affair is the lack of respect and appreciation shown to a man who has done uncountable things for the nation, and for the world.

Fortunately, every fiber within the bank headquarters itself today emanated this respect to such a level that it made the government’s issuing obsolete—if just for a moment. Today was one of the best days in my life to decide to stick around the office past 5 to brush up on some work, as if I had decided to leave 5 minutes earlier I would have absentmindedly missed one of the greatest feelings in my life, and if I had left 5 minutes later I would have found unresponsive elevator buttons and an empty hallway. Today Professor Yunus spent his day in court, waiting to hear the final verdict deciding his place within his own company—excuse me, the borrowers’ company. Many of the top staff in our own division were noticeably absent today, as they decided to travel to the courthouse with Dr. Yunus and await the final decision. All day the hallways and elevators were lacking the normal buzz of employees rushing floor to floor, and our usual schedule of successive meetings was nearly wiped blank. The verdict was supposed to be announced at 2pm, so without a word on the decision after hours of silence, leaving the office around 5 seemed casual and routine.  Immediately upon reaching the ground floor a wave of emotion and nervousness whipped into the elevator, as the opening doors displayed the entire atrium lined with the nearly 200 employees of Grameen’s head office. There was hardly any room to move, as the men had formed two distinctive lines on either side of the row of elevators we had just exited, with the line on the opposite side of us expanding backwards in a thick of men all the way into the middle of the reception hall. Timing and physical luck were on our side, as we had just left the elevators that were now being held open by staff to make sure that all elevators remained on the ground floor level, for a quick escape for Dr. Yunus. This meant that we were on the side with a slimmer width of people than the one across from us, and were able to secure a spot close to the front line and human pathway. It honestly felt like the second coming of Jesus was approaching. You could see in all of the faces of Grameen’s top management an eager and powerful expression, as they had formed a physical circle of comfort for Dr. Yunus’ return from the verdict. I had no idea if this was organized so that upon arrival he could relay the events at the courthouse, as the antsy, and yet calm chatter flowing in every direction across the hall was in Bangla. It was really amusing to have just descended from complete normalcy, into this organized mob of Grameen Bank’s upper management. As the interns who had joined me from our floor, and myself were the only foreigners present, it felt like uninvited we had stepped into something untouchable—a demonstration of the staff’s innate respect and love for their champion. A notable few glances were tossed in our direction with smiles, acknowledging the ambiguous reasons why we were present, and then soft eyes and smiles at our own excitement that probably emanated from across the hall. Faces were scouring the circular drive in front of the bank’s entrance, peering into the many cars that unloaded Dr. Yunus’ closest companions who must have escorted him from the courthouse. Each car that pulled up, necks craned, and we were constantly fooled by the iconic blue Punjabi Yunus often wears, on the backs of strange faces.  Finally, the crowds near the doorway 10 feet away started to convulse, and I saw the bubbly cheeks and embracing smile that graces every wall within the bank. He slowly moved through the crowd, looking calmly into the faces of his associates, stopping firmly in front of many to shake their hands and welcome the support of his peers. It was one of those moments where I have truly seen how dedicated and genuine those working at Grameen really are, and how much this man, whom many see daily, has impacted the lives of his co-workers and supporters. Their faces looked like children meeting Santa Claus, with subtle expressions of excitement on faces that were subdued out of respect and quiet admiration. It didn’t feel like they had gathered ceremoniously to celebrate a positive verdict, or give their nods to a negative one. It felt like a portrayal of the staff’s love and support for Muhammad Yunus, as a man and an inspiration, and seemed objective to any prior-reached verdict. He moved slowly up through the lane that had been cleared for him, flanked by his closest confidants—a few faces of which I recognized from conversations in the elevator. As Professor moved up towards the elevator he caught the eyes of me and my new German friend Sven, sticking humorously out in the crowd. He lingered on our faces for a moment and smiled, with the subtle presence of question in his eyes, as we waved like kids at a float passing by during a parade.  When he reached the elevator doors, merely 5 feet from us, he turned to look out at his company, which erupted in thunderous, supportive applause that flooded the entire room. The other interns and I were simply beaming and clapping alongside everyone, feeling as usual, part of the wonderful Grameen family that this man has started. The applause lingered passionately for about a full minute or two, until he ducked into the elevator and ascended to his office on the 4^th floor. It was one of the coolest, most amazing things I have ever been a part of…mainly because it didn’t feel like it was about anything in the newspapers, the government or the future of Grameen. It was more about the past, and the accomplishments and legacy that decorate this man. We couldn’t understand anything those around us were saying, but they held the same expressions that we did, those of appreciation and gratitude. For with him, a whole movement has been launched. I think publications on social business and microfinance rightly capture the immense possibilities of truly having an impact on the world and those of the poor, but one thing is often under-acknowledged. Through his work, teachings and inspiration, thousands of people across the world have found a career path that can truly lead them to happiness, knowing that there are options and means through which they can achieve their dream of helping the world. Muhammad Yunus believes in human nature’s desire to help people, rather than maximize personal gain, and being inside that room with those that have fought beside him for decades was a reminder of how true that really is—an image and a sound that will echo in my head for years.

Grameen Veolia--an unconventional partnership to bring clean water to the poorest of the poor

The Water Issue in Bangladesh

Access to safe drinking water is one of the biggest challenges that Bangladesh is facing today, with almost 100 million people being at risk of arsenic contaminated water sources. It  is an ambiguous issue as the population has always been bombarded with contrasting information regarding water safety, and the effects of arsenic often take years to exhibit; therefore, the majority of those consuming the contaminated water do not perceive it as a risk to their health. The frequent intake of arsenic contaminated water can lead to skin discoloration of a fierce, deathly black color, cardiovascular and neurological complications, and various types of cancer. The number of cases of arsenicosis has been rising since the 1990s, when the first cases emerged and pointed towards a high concentration of arsenic in the groundwater supplied by the tube wells. Tube wells are usually considered a solution to the problem of fresh water access—especially in developing countries around the world. Therefore, in the 1970s and 1980s millions of tube wells were installed throughout Bangladesh, with financing from the government and foreign AID support, which sought to provide the rural populations with bacteria free water. It is now estimated that 90% of rural Bangladeshis access their water through these tube wells, and yet there has been growing alarm about the continuing dangers of its water.  These tube wells only descend less than 200 ft into the ground, which still exposes the people to the high amounts of arsenic. The Project Director of Grameen Veolia explained that by the WHO’s standards, water provided should be no more than 10 micrograms of arsenic per liter, and yet as many water sources throughout the country measure in around 500-600 micrograms/L, their national standard is still 5x that of the WHO, at 50 micrograms.

This concept of installing tube-wells reached Bangladesh in the late 30s and 40s, as people using river and pond water were dying from cholera and other water-borne diseases. A country-wide campaign was born to educate the population about the dangers of dirty water, which took nearly 40 years to create a general understanding that one needed to drink safer water. However, once arsenic was found in the government’s tube wells in 1991, they began to paint the spouts of unsafe water red, and for safe water they painted it green. While arsenic contamination was spreading throughout the country, the government refrained from telling the people not to use tube wells, and began telling the villages that if the wells were built at the 400-600 ft mark advocated by experts, that the water would be safe. However, adapting these wells is expensive and timely, and there are other harmful things present in the water—such as iron. These inadequate messages and indirect communications that reach the rural areas has been a major problem for new water treatment companies in Bangladesh. It surfaced regularly in some of our conversations in the villages when people explained that “the government protects” them from harmful water.

Enter: Veolia Water Ltd.

Veolia Water is a French company that has set the world benchmark in water and waste water services. Working in Africa, the Middle East and India, it has spent the last 150 years working towards its mission of helping to safeguard public health by ensuring a clean and safe water supply. On the other side, is the aforementioned Grameen Health Care Services Ltd. Launched in 2006 as a sister company of the Grameen Bank, GHS seeks to provide quality health care services to the lower income group of Bangladesh at an affordable cost. In order to fight arsenic contamination in the country’s groundwater, GHS and Veolia combined forces in a 50/50 joint venture in April 2008, to construct and operate water treatment plants in rural Bangladesh. These plants seek to provide the local populations with potable drinking and cooking water for their basic needs at very affordable rates.

Started as a research and development project of Veolia, the initial plan was to build five plants by 2012 to serve drinking water to 100,000 people. Following the same social business model as many of Grameen’s sister companies, Grameen Veolia Water Ltd. Is a non-loss, non-dividend venture and is sustained by the low rates collected from customers, with all profits being reinvested for further expansion and improvement.

Goalmari Plant: How it Works

With an ambitious plan to replicate the model across the country if the pilot project is a success, GV has begun targeting the most vulnerable regions in Bangladesh affected by high concentrations of arsenic. The first GV plant was constructed in the village of Goalmari, 50 km east of the capital city of Dhaka and began working in April, 2009. According to the Department of Public Health Engineering of Bangladesh, nearly 83% of the groundwater tube wells in the village are contaminated with arsenic.

With an initial investment of 18 million taka, the water treated at the Goalmari plant is taken from the nearby Meghna river, and undergoes traditional antibacterial treatment via activated carbon filtration and chlorination to be rendered potable. The plant’s capacity is 10,000 L  per hour, and the water is distributed through 4km pipelines serving 11 taps throughout Goalmari Union. This pipeline network is to be expanded in order to serve the neighboring villages of Padua. At each of these taps a dealer (called a Grameen Lady) is in charge of selling the purified water at the rate of 2.5tk (roughly USD 0.40) per 10 liters. This rate ought to be compared to the price of a 1.5L bottle of water here in Dhaka, which is typically 20tk (unless they notice I’m American and I get a lovely discount of 100% mark-up).

When the CEO of Veolia initially approached Professor Yunus with the proposal of a joint venture, he was turned down until he agreed to working towards the goal of selling the treated water for 1tk per 10L. Since then, GV is working towards sustainability—amidst their many challenges—with the hopes of someday decreasing the current 2.5tk cost.

It was emphasized frequently that the water cannot be provided for free, as GV is a social business and not a charity, with many expenses such as manpower and treatment costs. However they have a joint agreement to bring the costs down low enough that no one should question the decision to buy water. Currently they have 21 Grameen Ladies who control the tap points throughout the region, and sell the water to the village people. For each 20L she sells, she gets 1tk, while the company gets 4tk. In this way, they have been able to provide some employment opportunities and provide the women a small commission. However, as many of your minds are probably racing as mine did to calculate the typical daily wage, it should be noted that these women manage these taps in addition to their other IGAs. The distribution points are often next store to their homes, so that in addition to selling the water they can operate additional businesses inside of their home. It is estimated that each GL can serve up to 50-200 households around the tap, and often sell 30L per household, per day.

The Year’s Challenges

Grameen Veolia has covered 2 villages, reaching almost 40,000 people so far, but have been presented with many great challenges as it is a very new concept. They have to create a culture of buying water in order to be sustainable. Many are aware of arsenic but its elusive long-term effects make it difficult for them to reconcile making the extra purchase. Therefore their three key challenges today include combating generations of habitually drinking arsenic water, tackling the price of the water to be available for the poorest of the poor, and working alongside a government that toys with the information that reaches the people.

It’s extremely important to the future growth and presence of GV that their outreach campaigns are strong, and that they gain the necessary support within the communities. Therefore they have been utilizing orientations designed for students, school teachers, local government, religious leaders and workers. Many of the promotional materials and posters that they use were strewn about the office, and were refreshingly clear in their message—despite only using pictures and diagrams to communicate with the mostly illiterate population. The Program Director explained that they have been fortunate enough to leverage Grameen Bank’s existing network in Goalmari, and encourage branch and center managers to educate the borrowers are arsenic, and explain the presence of GV in the community. He also placed special care to emphasize that they do not have a formal partnership with Grameen Bank that leads them to use Branch managers to push borrowers into buying from GV. It is more like means of encouragement and information from a respected source. Similarly to the inception of Grameen Bank, GV has been spending significant amounts of time working and orienting religious leaders about their business, as these leaders are perfect figures to disseminate information throughout the villages, and their trust is a nonnegotiable necessity. GV’s campaign dominates their agenda, as without it they will not have a market. After their opening ceremony of the wells, only 10% of the potential market was buying water, and that number in the past couple of years has only risen to 15-20% (oftentimes higher in the summer as the heat demands hydration). Therefore, current projections predict that at this rate they will not achieve sustainability for about 10 years. However, GV’s communication system has been steadily growing and uses an assortment of mediums to catch the villager’s ear. They have associates going to people’s homes, door to door, hold courtyard meetings and orientations, and invite strong figures in the villages to attend meetings.

When asked for a current evaluation of the pilot project, the program director said with a shy smile that it needs some time to be sustainable, as they are fighting the conventional system to provide water for free. However, the technology in place and the actual treatment process of the plant is running flawlessly, it is merely a behavioral change that the company must now work to produce.

I  asked my supervisor Mr. Humuan if we can visit the Goalmari plant while we’re in Bangladesh, and he is currently arranging for us to visit their operations next week. I’m hoping to have an opportunity to speak with the teams orchestrating the orientations, as well as the Grameen Ladies that manage GV’s entire distribution network. And, even if Bangla or chance prevents me from any concrete conversation, I always chase after the opportunity to sneak away from Dhaka for a few hours.

A follow up from yesterday's social business funds: exhibit A--Grameen Fund

Ello all! Kelly and I once again spent our days traveling from one conference room to another. Today we spoke with Grameen Kalyan (Grameen's healthcare provider), Grameen Shikka (a new effort to enhance education for poor children), and Grameen Fund. To help one of the Japanese students get better quality notes each day, and to help myself keep track of all incoming information, I've begun typing thoughout meetings this week. Just a quick explanation for the sudden outbursts of academically focused blog postings this week! Hopefully it's useful for some folks back home, and I promise it won't always consume my writing.

Also, Kelly and I will be switching off and on with summarizing different models of Grameen's sister companies, so if you are interested in following visit her blog @ http://www.sanmasa.tumblr.com/

Grameen Fund is dedicated to promoting, managing and financing various enterprises, which aim to create wealth for poverty alleviation in the country. It was incorporated in 1994 by Muhammad Yunus as a nonprofit social venture capital finance organization—now seen as the pioneer of venture financing in Bangladesh.

Their main strategy lies in venture capital finance, especially in technology based ventures. It equally lays stress on providing fixed capital and working capital loans to the micro-enterprises run by those who are newly emerging out of poverty. The company places a strong emphasis on financing risky ventures with untested technology/products that are generally denied credit from more traditional lending institutions.

Their two key objectives include providing equity in companies trying to innovate in various sectors that hold promise for future growth with direct or indirect impact on poverty alleviation; in addition to providing loans, equity or both to new or existing companies for balancing, modernization or expansion. Grameen Fund also tries to promote or develop enterprises which have high prospects for export or import substitution that will use indigenous materials, provide employment to rural poor or help upgrade the skills of rural or urban poor.

The fund’s three main activities include venture finance, a microenterprise loan scheme and a deposit loan scheme that is steadily attracting clients.

1.       Microenterprise loan scheme—similar to the activities of Grameen Bank. GF finances micro enterprises in the rural areas run by non members of Grameen Bank that require working capital as well as fixed capital for its on-going small-scale enterprises. They are not specifically the poorest of the poor, but people who already have an enterprise and marketing network, or business background. However, if they still need additional capital they can go to any lending institution, Grameen Bank or Grameen Fund.

One key difference from Grameen Bank is that the money goes directly towards an individual’s business, rather than utilizing group lending. The loan amounts are also much larger—typically 50,000-500,000tk, with 20% interest p. a. on declining balance. The repayment schedule can be anywhere from 1 to 3 years, with a grace period that is dependent upon the business’s cash flow.

In selecting micro enterprises, GF gives priority to businesses that create value, which operate in the non-traditional sector, and those that apply local inventions, products or processes. They also try to select enterprises that use indigenous materials, have potential for rapid growth, enhance skills, provide eco-friendly products, and especially those that create social benefits or job opportunities.  To date, they have financed over 2,000 different projects with a cumulative loan disbursement of over TK 200 million. Typical sectors financed include fishery, poultry, dairy, agro processing, workshop, small business, service, handicrafts etc….

2.       Venture finance:  Participation in other people’s relatively larger projects.

Utilizing selection principles similar to the microenterprise loan scheme, GF provides equity financing to over 13 different companies as of 2008, including Grameen Knitwear Limited, Grameen Bitek Limited and Grameen Capital Management Limited. The fund prefers to take 51% of the equity in a project, but will settle for a lower ratio depending upon the company. They also lend substantial amounts of capital to organizations within the Grameen family of enterprises.  Grameen Fund may also provide bridge loans, loan guarantees and management assistance.

3.       Deposit Loan Scheme: Available for nonmembers of Grameen Bank who hold deposits in the bank. They are able to take loans against their deposits at 80% of their total savings and interest earned.

Grameen Fund has seen a significant rise in the number of clients participating in their deposit loan scheme.  However, they tend to go to larger commercial banks when the loan amount exceeds Grameen Fund’s capacity, but for lower amounts they come to the fund because of the lower interest rates and high level of flexibility.

The fund itself got its own financing from Grameen Bank, which gave its loan portfolio from Grameen Bank’s Social Venture Capital Fund. They also received financing from the Calvert Foundation—a US based socially responsible investment organization that supports community development organizations—and UBICO—a UAE-Bangladesh Investment Company.

It is the fund’s responsibility to be cautious as it cannot risk tying up a lot of its money in one unsuccessful project. Therefore their priorities are currently to improve existing relationships, rather than seek new ones, so for the last 2 years they have not invested in new ventures.

Current challenges also include the default rate of the microenterprise loan scheme. For the past 2 years they’ve been modestly profitable, and with that income they’ve been able to diversify their operations and move away from dependence on Grameen Bank. Strengthening their own infrastructure, personnel and finances has been a significant step for the fund in the past 2 years.

Most companies we've been spending our time with give us hard copies of their annual reports, brochures and business cards for future contact and discussions--all of which will  hopefully be kept in the Social Enterprise Institute at Northeastern for a more indepth look into the companies and their structures.

Tomorrow we finally head back into the field--which I've already missed after spending the past 4 days in Dhaka. We will be visiting various projects of Grameen Shakti--an environmentally conscious energy company that seeks to spread the use of solar panels and biogas ovens throughout the rural areas of Bangladesh. I'm really excited as we've had 2 different meetings with some of their management, but beyond using the branch manager's Shakti oven we have seen little of their operations in the field--where the bulk of the company operates.

ALSO, today our supervisor casually told us that we have a meeting with Professor Yunus this Thursday! He said it so nonchalantly that I had to ask "who!?". And then act cool and calm when he repeated himself. Here I've been plotting my 2 minute elevator pitch for marriage, and now I have to squeeze all of my thoughts into 30 minutes with him. Oh the horror/dream!

Goodnight Boston! I miss you