My experience at - Reserve Bank of Fiji by Mr...My experience at Jitendra Singh Chief Manager...

Presentation to the

National Microfinance Workshop

4 November 2009

My experience atMy experience at

Jitendra Singh

Chief Manager (Economics)

Reserve Bank of Fiji

My experience atMy experience at

OutlineOutline

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

4. Lessons for Fiji4. Lessons for Fiji

OutlineOutline

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

4. Lessons for Fiji4. Lessons for Fiji

• Originated in 1976 in Jobra;

founded by Prof. Md. Yunus

• research project to examine the

possibility of designing a credit

delivery system to provide banking

services targeted at the rural poor

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

services targeted at the rural poor

• Extended to several districts

thereafter

• In October 1983, became an

independent bank

• Owned by borrowers (90%) and

Govt. of Bangladesh (10%)

• 97% of borrowers are women (also shareholders)

• 100% loans financed from deposits (no donor

money); give US$100m loan every month

• US$19.5 million profit in 2008

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

• 98% recovery rate

• Interest Rates

• 20% for income generating loans,

• 8% for housing loans,

• 5% for student loans, and

• 0% (interest-free) loans for Struggling Members

• Deposit interest rates (8.5 – 12%)

What makes GB different from conventional Banks?

• Credit is accepted as a human right!

• Objective not to maximise profit, but bring financial services to the poor

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

services to the poor

• One who does not possess anything gets the highest priority

• Based on potential, rather than achievement

• Located close to the poor; GB goes to the poor (to the

doorstep), rather than the poor going to the bank

• GB takes on more admin work, rather than the poor

What makes GB different from conventional Banks?

• no collateral; no legal instrument between the lender and borrower; just good database on every borrower (7.95 million of them)

• GB actively assists borrowers to meet repayments - loan

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

• GB actively assists borrowers to meet repayments - loan repayments are easily rescheduled

• helps families of borrowers with building their pension funds

• In case of death of borrower, built-in insurance system clears the debt fully

• encourages borrowers to adopt some goals in social, educational, health areas (16 goals) – brings about improvements in other aspects of life

Struggling Members Programme

• Started in 2002; Includes disabled, blind and retarded people

• 112,000 joined the program (almost 17% have left begging now)

Basic features:

• 1) They make up their own rules

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

• 1) They make up their own rules

• 2) All loans are interest-free, can be very long term, with very small installments

• 3) Members are covered under life/loan insurance programmes

• 4) Groups/Centres are encouraged to become patrons of the beggar members

• 5) Each member receives an identity badge with GrameenBanklogo

• 6) Members are not required to give up begging, but are encouraged to take up an additional income-generating activities

OutlineOutline

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

4. Lessons for Fiji4. Lessons for Fiji

2. What I saw and learnt2. What I saw and learnt

ABSOLUTELY GENUINE and PASSIONATE

in their desire to help the poor!

• Objective: not to maximise profit, but bring financial

services to the poor

• They lessen the burden of accessing financial services

• Will work very closely with the poor to help them up

• Will do their best not to let the poor fail; ensure their

self-esteem is not affected

• Support borrowers’ families – sustainable method of

keeping people out of poverty – database is critical

2. What I saw and learnt2. What I saw and learnt

1) Grameen Phone Ltd

2) Grameen Telecom

3) Grameen Communications

4) Grameen Cybernet Ltd

11) Grameen Shikkha (Education)

12) Grameen Capital Mngmt Ltd.

13) Grameen Business Promotion

14) Grameen Trust

Much bigger than we thought!

4) Grameen Cybernet Ltd

5) Grameen Solutions Ltd

6) Grameen Information Highways Ltd

7) Grameen Bitek Ltd

8) Grameen Uddog (Enterprise)

9) Grameen Shamogree (Products)

10) Grameen Knitwear Ltd

15) Grameen Health Care Trust

16) Grameen Health Care Service

17) Grameen Danone Food Ltd

18) Grameen Veolia Water Ltd

19) Grameen Shakti

20) Grameen Kalyan

21) Grameen Motsho (Fisheries) Fn.

2. What I saw and learnt2. What I saw and learnt

GRAMEEN CLINICS

48 Grameen Clinics (GCs)

GRAMEEN CLINICS

48 Grameen Clinics (GCs)

MICRO-INSURANCE

PROGRAM

MICRO-INSURANCE

PROGRAMGRAMEEN EYE GRAMEEN EYE

48 Grameen Clinics (GCs)

have been established

across Bangladesh that

include a laboratory and

pharmacy, and satellite

camps along with

community health

outreach, and emergency

services.

48 Grameen Clinics (GCs)

have been established

across Bangladesh that

include a laboratory and

pharmacy, and satellite

camps along with

community health

outreach, and emergency

services.

PROGRAM

A vital component of

these health programs is

the accompanying micro-

health insurance scheme

to encourage positive

health seeking practices.

PROGRAM

A vital component of

these health programs is

the accompanying micro-

health insurance scheme

to encourage positive

health seeking practices.

GRAMEEN EYE

HOSPITAL

Opened in 2008, the

first Grameen Eye

Hospital is modeled

after the successful

Aravind eye hospitals in

India. These targeted to

perform 50,000 eye

examinations and

10,000 cataract

operations per year.

GRAMEEN EYE

HOSPITAL

Opened in 2008, the

first Grameen Eye

Hospital is modeled

after the successful

Aravind eye hospitals in

India. These targeted to

perform 50,000 eye

examinations and

10,000 cataract

operations per year.

Journey Towards Green Energy Revolution

Our mission is to

empower the rural

people with access to

Green Energy and

income.income.

We envisage a future

where rural households

of Bangladesh would

have access to

environment friendly

and pollution free

energy at affordable

costs.

Journey Towards Green Energy Revolution

Journey Towards Green Energy Revolution

Journey Towards Green Energy Revolution

Journey Towards Green Energy Revolution

Journey Towards Green Energy Revolution

Journey Towards Green Energy Revolution

OutlineOutline

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

4. Lessons for Fiji4. Lessons for Fiji

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

• A completely new way to use

the creative vibrancy of business

to tackle social problems…

• Currently….• Currently….

“We will do the socially

responsible thing as long as it

doesn’t prevent us from making

the largest possible profit”

Source: Creating a World Without Poverty, Prof. M Yunus, 2008.

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

• Not to achieve limited personal gain, but to pursue

specific social goals (but run as a business)

• Cause-driven, rather than profit driven, with potential to

act as a change agent for the world

• Businesses recover investment and then re-invest all • Businesses recover investment and then re-invest all

profits in the business thereafter

• Examples:

• Nutritious food products for poor children

• Health insurance policies that provide

affordable medical care to the poor

• Renewable energy to those without electricity

• Waste management companies

Source: Creating a World Without Poverty, Prof. M Yunus, 2008.

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

Social Business:

BASF Grameen Ltd.

Grameen Danone Foods has

placed social and environmental

concerns at the heart of its

business model. Although theBASF SE and Grameen

Healthcare Trust establish the

Joint Venture BASF Grameen

Ltd. in Bangladesh. The

purpose of the company is to

improve the health and

business opportunities of the

poor of Bangladesh. BASF is

the first DAX30 company and

the first chemical company in

the world to set up a social

business with Grameen.

business model. Although the

company has to be profitable –

profits from the first plants are

needed to finance the

construction of new plants – the

success of the project will above

all be judged on non-financial

criteria: the number of direct and

indirect jobs created (milk

producers, small wholesalers,

door to door sellers),

improvements to children's

health, protection of the

environment etc.

GSL is continuously creating

partnerships with industry

leaders to innovate and create

Business and Information and

Technology solutions that are

affordable and sustainable.

GSL offers business services,

management consulting,

software development,

business and technology

process and service

outsourcing.

OutlineOutline

1. About 1. About GrameenGrameen Bank (GB)Bank (GB)

2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt2. What I saw and learnt

3. The concept of ‘Social Business’3. The concept of ‘Social Business’

4. Lessons for Fiji4. Lessons for Fiji

4. Lessons for Fiji4. Lessons for Fiji

• As a country, we need to be more passionate

about helping the poor

• “The poor will always need money – demand can

be created!!” (Prof. Yunus)be created!!” (Prof. Yunus)

• Don’t let financial illiteracy affect financial access

• Use role models in awareness programmes

• Manage Failures – allow experimentation

• Social Business. An idea for Budget 2010?

Finally…Finally…

“Do not

measure our

progress by

how much we

have have

achieved, but

rather by

how far we

still have to

go”

Prof. Md. Yunus

August 2009