Anwara Begum with her grand-daughter Ria of ... - Grameen · PDF fileCOVER Anwara Begum with her grand-daughter Ria of Mirzapur Sherpur Branch, Bogra. She is a member of Grameen

COVER Anwara Begum with her grand-daughter Ria of Mirzapur Sherpur Branch, Bogra. She is a member of GrameenBank for last twelve years.

ANNUAL REPORT 2005 1

ForewordBoard of Directors

Organizational ChartGrameen Bank : 2005

Highlights of 2005Zones’ Location

Loan ActivitiesVillage Phones

Higher Education LoansScholarship Programme [for Members' Children]

Struggling [Beggars] Members Programme2005 : Disbursement of Loans Listed under Broad Categories of Business Activities

2005 : Top 25 Items for which Members took Loans2005 : Disbursement of Microenteprise Loans Listed under Broad Categories of Business Activities

2005 : Top 25 Items for which Members took Microenteprise LoansZone-wise Comparative Statement

Grameen Bank Monthly update, December 2005Past Five Years of Grameen Bank

Comparative Consolidated Statement for Years 2004 & 2005Poverty Alleviation Survey of Grameen Bank Members

Grameen Bank Historical Data Series 1976-2005 (In Million Taka)Grameen Bank Historical Data Series 1976-2005 (In Million US$)

Computerization ProgrammeAuditors' Report and Audited Financial Statements

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Contents

FOREWORD2

Foreword

G R A M E E N B A N K

Twenty-two Years Since We Became a BankIn 2005, Grameen Bank completed its 22 years of operation as an independent bank(1983-2005), and 29 years since we start our work in the village of Jobra. As of 2005Grameen extended its service to 5,579,399 members. Growth of both member and non-member deposit was also noticeable. Deposit balance increased from Tk. 20,718 millionto Tk. 31,660 million. Annual disbursement increased from Tk. 25,873 million to Tk.39,183 million. Number of telephone ladies increased from 92,673 to 187,187 offeringtelecommunication services in nearly two third villages of Bangladesh where this servicenever existed before. Telephone ladies use 19 per cent of the total air-time of grameenphone, the mobile phone company, while their number is only 3 per cent of the totalnumber of the telephone subscribers of the company. Some 8,926 students from Grameenfamilies got higher education loans. Computerisation of accounting and MIS reached itslast leg. Out of 1,735 branches, 1,455 branches have been brought under computerisation.

Photo : Nasir Ali Mamun


Resource Mobilization

Grameen Bank (GB) finances all its loans from its ownfund and funds received from the depositors. Over 72per cent of these deposits come from the bank'sborrowers.

Policy for Opening New Branches

Grameen Bank launched its policy for establishing newbranches with their own money. New branches cannotborrow from the head office of the bank to undertakeon-lending activities. New branches will have to carryout their lending programme with the moneymobilised through deposit collection or loans from thezonal office. This must be repaid within six months.They’ll also have to reach break-even point within ayear of operation. If this succeeds it will becomeanother landmark in microcredit operation. 377branches have been opened in this way during 2005.Impact of the policy will be noticed in the followingyears.

Beggars As Members

Begging is the last resort for survival for a poor person,unless he/she turns towards crime or other forms ofillegal activities. From 2003 Grameen Bank introducedthis programme to reach out to the ultimate poorest.Beggars are given loans to start micro-businesses alongwith begging. They may give up begging if theirbusinesses pick-up and bring enough income to makeit worthwhile, or even necessary to stop begging. Allloans are interest-free. Loans can be very long term, tomake repayment instalments very small. Beggarmembers are covered under life insurance and loaninsurance programmes without incurring any cost. Thebeggars responded very well. A total of 63,122 beggarshave already joined the programme in 2005, out ofthem 59,909 are women. Among these beggars, thereare disabled, blind, handicapped people, as well as oldpeople with ill health. Total amount disbursed stands atTk. 45.92 million, out of which Tk. 23.69 million hasalready been paid off.

Star for Achievements

Creating “Five Star Branches” is the most excitingchallenge for the Grameen Bank staff. In order to doso, they are committed to free Grameen Bankborrowers from poverty and make the children ofGrameen families 100% literate. In 2005, out of 1,735branches, 989 received green stars for maintaining 100percent repayment record, 1,072 branches received bluestars for earning profit and 805 branches earned violetstars for financing their operations from profits anddeposits. The latter branches not only carry out theirbusiness with their own funds but also contribute theirsurpluses to meet the fund requirements of branches indeficit.Apart from the above-mentioned achievements,243 branches received brown stars for ensuringeducation for 100% of the children of Grameenfamilies, and 39 branches received red stars forsucceeding in taking all their borrowers’ families overthe poverty line.

As we reaffirm our commitment to play a strategic rolein ending poverty, we are happy to present the detailedinformation on working of Grameen Bank during2005.

Muhammad Yunus Managing DirectorGrameen BankEmail : [email protected]

BOARD OF DIRECTORS4

Board of Directors



CHAIRMAN

MR.TABARAK HUSAIN Former Foreign Secretary, Government of Bangladesh

House No. 43, Road No. 9, Dhaka Cantonment, Dhaka-1206

DIRECTORS

PROFESSOR MUHAMMAD YUNUS Managing Director, Grameen Bank, Mirpur 2, Dhaka

FERDOUS ARA BEGUM Additional Secretary, Ministry of Establishment, Bangladesh Secretariat, Dhaka

MR. KAMRUL HASAN Additional Secretary, Ministry of Finance, Bangladesh Secretariat, Dhaka

MRS. SREETI KANA BARUA Borrower Member, Unosatturpara Raojan Branch, Chittagong

MRS. FULTARA BIBI Borrower Member, Dewanbazar Balagonj Branch, Sylhet

MOSS.ANOWARA BEGUM Borrower Member, Silimpur Tangail Branch,Tangail

MRS. RABEYA KHATUN Borrower Member, Bason Gazipur Branch, Dhaka

MRS. HASINA BEGUM Borrower Member, Nakol Sreepur Branch, Faridpur

MRS. RAHIMA BEGUM Borrower Member, Sehakathi Patuakhali Branch, Patuakhali

MOSS. SHARIFA BEGUM Borrower Member, Parila Paba Branch, Rajshahi

MOSS. RULI BEGUM Borrower Member, Jaygirhat Mithapukur Branch, Rangpur

MOSS. FEROJA BEGUM Borrower Member,Amorpur Chirirbandar Branch, Dinajpur

Board of Directors Meeting of Grameen Bank

ORGANISATIONAL CHART6

Organizational Chart



GRAMEEN BANK : 20058

Grameen Bank now operates through twenty-one zonal, 166 area, and 1,735branch level offices.

A basic principle of Grameen Bank is that the bank goes to the poor people, since it isdifficult for the poor people to come to the bank.All banking transactions are done inthe centre meetings at the village level, attended by borrowers and the centre managerwho is a bank staff. The branch borrows from the head office whenever it needs funds,at the rate of 4 percent for housing loans (on-lending at the rate of 8 percent) and atthe rate of 12 percent for income-generating loans (on-lending at the rate of 20%declining basis equivalent to 10% flat rate).

Grameen Bank : 2005



The Grameen Generalised System

There was a long period of preparation by the bank staff andmanagement to develop a new flexible

loan system that wasintroduced at the end of 2000.

The new system is amore simplified, more

customer friendly systemthat can work equally wellboth in normal and disaster

situations. TheGrameen GeneralisedSystem offers four types

of loan products : 1)the basic loan, 2) the

housing loan, 3) thehigher education loan,

which runs parallel to thebasic loan, and 4) the

struggling members (beggars) loan programme.

Basic Loan usually has near hundred per cent repayment. A basicloan is converted into a flexible loan or rescheduled loan, if theborrower finds it difficult to pay the weekly amount she hadpromised. Flexible loan allows to reduce her installment size. At theend of 2005, nearly five per cent of the borrowers were on flexibleloans. Flexible loan is not an independent loan. It is only atemporary detour from the basic loan. A borrower will always makeefforts to go back to the basic loan. If a borrower fails to repay thebasic loan and is unwilling to go into flexible loan, she becomes awilling defaulter. 100 per cent provision is made against heroutstanding loans. Flexible loan not paid back in two years becomesoverdue; 100 per cent provision is made in such a case and after threeyears, it is written off.

Housing for the poor

Grameen Bank introduced housing loan in 1984. It became a veryattractive programme for the poor borrowers. The ownership of ahouse infuses people with a sense of confidence, security and

At the end of December 2005, the bank, through its 1,735 branches located in 456 upazilas or sub-districts andall the 64 districts of Bangladesh, was serving 5.5 million members. Cumulatively it had disbursed, by the endof December, 2005, Tk. 256,497.40 million (US$ 5,227.05 million) as loans. Grameen Bank members alsodeposit in various savings accounts and the balance of their savings stood at about Tk. 20,138.37 million. Thebank’s services reached 59,912 villages, out of a total of about 68,000 villages in the country.

GRAMEEN BANK : 200510

self-respect, to begin dreaming for a better life for herself and herfamily. A member can borrow up to Tk. 25,000 for constructinga simple tin-roof house at an interest rate of 8 percent to be paidback over a period of ten years. Over 627,000 houses have beenconstructed with the housing loans averaging Tk. 13,413 (US$222). During 2005, 19,643 houses have been built with housingloans amounting to Tk. 187.08 million (US$ 2.95 million).

Micro-enterprise Loans

Many borrowers are moving ahead in business faster than othersfor many favourable reasons, such as, proximity to the market,presence of experienced male member in the family, etc.Grameen Bank provides larger loans, called micro-enterpriseloans, for these fast moving members. There is no restriction onthe loan size. So far 668,389 members took micro-enterpriseloans. A total of Tk. 14.50 billion (US$ 235 million) has beendisbursed under this category of loans. Average loan size is Tk.21,695 (US$ 352), maximum loan size taken so far is Tk. 0.5million (US$ 7,812) for furniture business. The other major itemsare grocery shop, medicine shop, dairy farm, baby-taxi fortransportation and stone for construction business.

Village Phones

To-date Grameen Bank provides loans to 187,187 borrowers to buymobile phones and offer telecommunication services in nearly halfof the villages of Bangladesh where this service never existed before.It is also generating revenue for Grameen Phone, the largesttelephone company in the country. Village phones use 16 per centof the air time of the company, while their number is only 4 per centof the total of telephone subscribers of the company.

Higher Education Loans

In 1997, Grameen Bank introduced the Higher Education Loanprogramme, in an effort to provide new opportunities for talentedchildren of its borrowers to receive higher education. Children ofborrowers who enroll in medical schools, engineering, honors and

masters degree programmes, agricultural colleges, textileengineering and other higher education programmes, are eligibleto receive financing from this loan window. The loans areintended to cover all expenses incurred by students from thebeginning of their respective courses until completion, includingadmission fees, course fees, required stationery, food andaccommodation and other related necessary expenses. Until theend of the year 2005, 8,926 students from various disciplines haveso far received loans under this programme.

Scholarships

Scholarships are given to the children of Grameen members,with priority on girl children, every year, to encourage them toget better grades in schools. Over 6,000 children, at variouslevels of school education, receive these scholarships every year.So far 23,515 children got scholarship up to December, 2005.

Loan Insurance

Under this programme, in case of death of a borrower, alloutstanding loans are paid off from the insurance fund. Insurancefund is created by the interest generated through a savings accountcreated by an annual deposit of the borrowers. Borrowers arerequired to put amount equal to 3.0 per cent of the loanoutstanding on December 31, in a designated savings account. Ifher/his outstanding amount does not exceed the amountoutstanding in the previous year, shedoes not have to add any moremoney into this account. If itexceeds, then he/she pays 3.0 percent of the incremental amount.Balance of deposits under loaninsurance programme stoodat Tk. 1,990.54 million(US$ 30.26million) as onDecember 31,



2005. Up to that date 40,338 borrowers died and a total outstandingloans and interest of Tk. 308.97 million (US$ 5.04 million) leftbehind was paid off by the bank under this programme.

Life Insurance

Each year families of deceased borrowers of Grameen Bank receivea total of Tk. 8 to 10 million (US$ 0.14 to 0.17 million) in lifeinsurance benefits. Each family receives Tk. 1,000 or Tk. 2,000depending on length of period during which the deceased was aGrameen Bank borrower. A total of 81,750 borrowers died so far inGrameen Bank. Their families collectively received a total amountTk 158.97 million (US$ 3.55 million). Borrowers are not requiredto pay any premium for this life insurance. Borrowers come underthis insurance coverage by being a shareholder of the bank.

‘Stars’ for Achievements

Grameen Bank provides colour-coded stars to branches and staffs for100 per cent achievement of a specific task starting form 2001. Abranch or a staff having five-stars indicates the highest level ofperformance. At the end of 2005, 989 branches got green stars formaintaining 100 per cent repayment record, 1,072 received blue starfor earning profit, 805 branches earned violet stars by meeting alltheir financing out of their earned income and deposits, 243branches have applied for brown stars for ensuring education for100% children of Grameen families and 39 branches applied for redstars indicating branches those have succeeded in taking all itsborrowers families over the poverty line. The stars are confirmedonly after the verification procedure is completed.

Computerized MIS and Accounting System

Accounting and information management of nearly all the branches(1,455, out of 1,735) has been computerized. This has freed the

branch staff to devote more time to the borrowers rather than spendit on paper-work. Branch staffs are provided with pre-printedrepayment figures for each weekly meeting. If every borrower paysaccording to the repayment schedule, the staff has nothing to writeon the document except for putting the signature. Only thedeviations are recorded. Paper work is done only at village level toenter figures in the borrowers’ passbooks.

Policy for Opening New Branches

New branches are allowed to borrow from the head office of thebank only during its first year, to undertake on-lending activities.After the initial year the on-lending fund must come from its owndeposit mobilization. A new branch is expected to break-evenwithin the first year of its operation.

Crossing the Poverty-Line

According to an internal survey, 58 per cent of Grameen borrowers’families of Grameen borrowers have crossed the poverty line. Theremaining families are moving towards the poverty line.

Getting Elected in Local Bodies

Grameen system makes the borrowers familiar with election process.They routinely go through electing group chairman, secretaries,centre-chiefs and deputy centre-chiefs every year. They elect boardmembers for running Grameen Bank every three years. Thisexperience has prepared them to run for public offices. They arecontesting and getting elected in the local governments. In 2003local government (Union Porishad) election 7,442 Grameenmembers contested for the reserve seats for women, 3,059 membersgot elected.

HIGHLIGHTS12

Highlights of 2005



Number of Members : 5,579,399Percent of Women Members : 96%Number of Centres : 99,502Number of Villages covered : 59,912Number of Branches : 1,735Number of Areas : 166Number of Zones : 21Cumulative amount Disbursed since Inception : 256,497.40 (Million Taka)Amount disbursed during 2005 : 39,183.49 (MillionTaka)Amount of loans outstanding : 27,970.31 (Million Taka)Balance of deposits

Members : 20,138.37 (Million Taka)Non-Members : 11,521.19 (Million Taka)

Portfolio Growth Rate : 39.66%

Grameen believes that the povertyis not created by the poor, it iscreated by the institutions and

policies which surround them. Inorder to eliminate poverty, all weneed to do is to make appropriate

changes in the institutions andpolicies, and/or create new ones.

Expanding Microcredit Outreach to Reachthe Millennium Development Goal-SomeIssues for Attention - Muhammad Yunus,presented at the International Seminar on

Attacking Poverty with Microcredit,organized by PKSF in Dhaka, January 8-9,

2003

ZONES’ LOCATION14

Zones’ location



BangladeshLocation of 21 Zones 2005

ChittagongTangail

RangpurDhaka

PatuakhaliBograSylhet

RajshahiDinajpurFaridpurComilla

MymensinghNarayanganj

Khulna

NoakhaliJamalpur

NilphamariHobiganj

PabnaBarisal

Jhenaidah

Grameen has given me a faith, anunshakable faith in the creativity of

human beings. That leads me tobelieve that human beings are notborn to suffer the misery of hungerand poverty. They suffer now anddid in the past because we turnour mind away from the issue.

- by Professor Muhammad Yunus

(Acceptance speech for the Help for Self-helpPrize of the Stromme Foundation, given on

September 26, 1997 in Olso, Norway.)

LOAN ACTIVITIES16

Loan Activities



The concept of Village Phone is an idea which caught people's imagination.Grameen Bank members have entered the age of information technology byleasing and purchasing cellular phones. The mobile phones not only create a

new business opportunity for the poor, but also bring access to information, market,health and other services to the remote rural areas of Bangladesh. With GrameenBank financing a Grameen Bank Borrower buys a mobile phone to become theTelephone Lady of the village. She provides the telecommunication services to thevillage while earning profits for herself. By the end of 2005, there were more thanone hundred eighty-seven thousand village phone ladies who have together takenloans amounting to Tk. 1,743.56 million.

The demand of the Village Phone services is increasing day by day. During the yearnearly 95,000 new phones were distributed and connections were provided to asmany cell phones in the villages. Grameen Bank, in collaboration with GrameenTelecom, a not-for-profit company, has made a plan to finance nearly 1,00,000 newphones to its members during the next year.

The additional income by selling telephoneservices of village phone ladies is almost doublethat of the national per capita income. Zone-wise statistics of village phones financedthrough the Bank’s lending programmeare given in the following page.

18

Village Phones


VILLAGE PHONES


Village Phone has restored the social dignity ofMaran, a crippled beggar

Maran Chandra Sarkar was born in Dayarampur village under Katigram Union ofManikganj District. He lost his father at the age of three. He, along with his twobrothers, was living in a joint family. Financially, they were reasonably solvent. Oneday, about ten years ago, Maran suffered a cut in his ankle while he was working inthe paddy field. It led to serious infection. Gradually, his condition worsened andfinally he had the leg amputated. It was the beginning of a miserable life. Once ajovial and energetic person, he was plunged into utter grief and frustration. Theburden of life began to weigh too heavy on his shoulders. Amid all these, he had toget married to fulfill his aged mother’s last wish. His father-in-law was a poor andhelpless man. Meanwhile, the family expenditure was increasing all the time. As aresult, Maran was forced out of the family. He was facing an uphill struggle to survivewith his wife. Finding no other alternative, he was forced to resort to begging.

With the passage of time, he became a father of two children. He always cherished adesire to educate his children and bring them up as decent human beings. One day, hebecame a member of Grameen Bank’s Katigram Manikganj Branch under its StrugglingMembers Programme in December 2003. He received Tk 1,000 as an interest-free loanfrom the Bank and started his vegetable business in the Katigram market. Somehow, hewas making both ends meet with his business and occasional begging. Then he starteddreaming of having a phone under Grameen Bank’s Polly Phone/Village PhoneProgramme. His dream turned into reality within a few days. In September 2004, Mr.Dipal Chandra Barua, Deputy Managing Director of Grameen Bank, officially handedover a village phone to Maran in a function attended by senior officials of the Bank,journalists, local Chairman and respected persons of the locality. With the phone in hishand, a delighted Maran expressed his feelings, “I am a mere crippled beggar, and Sirhas given me a phone! I am feeling like having the Aladdin’s lamp in my hand!”

The income from village phone made rapid improvements in his living standards. He gotthe opportunity to repay the interest-free loan in instalments, which he took to buy thephone. Every week he is repaying Tk 100 as loan instalment and every month he is earningTk 2,500 to 3,000. Alongside this, he is doing his vegetable business in the weekly villagemarket earning around Tk 50 each week. After meeting all expenses, he has been able tobuild up a deposit balance of Tk 15,000 in the Bank as savings. Now he is dreaming ofhaving his own grocery shop, with his savings, in which he will also carryon with his village phone business. This has been aremarkable turnaround in the fortune of Maran.Grameen Bank has made it possible forMaran to break free from abjectpoverty and lead a dignifiedsocial life with his headheld high.

Progress of Village Phones up to December, 2005.

Zone Number of Number of Village Branches Phones owned by

Bank Members

Chittagong 89 9,030Tangail 78 6,916Rangpur 86 7,888Dhaka 80 12,823Patuakhali 67 4,585Bogra 80 9,776Sylhet 60 10,366Rajshahi 100 15,421Dinajpur 70 5,921Faridpur 85 9,755Comilla 74 10,667Mymensingh 74 11,819Narayanganj 79 14,139Khulna 82 7,510Noakhali 88 13,080Jamalpur 56 6,712Nilphamari 52 4,639Habiganj 44 5,534Pabna 58 7,521Barisal 86 4,857Jhenaidah 78 8,228

Total 1,566 187,187

The higher Education Loan Programme was introduced in 1997 for thechildren of Grameen families so that they can pursue education at the highestlevel. Since its inception, the programme has distributed nearly 9,000 loans

worth Tk. 204 million. In 2005 alone, 3,971 students were sanctioned loans. Dhakazone has the most number of students (1,450) receiving higher education loan, withBogra zone second (940). The Dakshinkhan Uttara branch under Dhaka zone hasgiven the highest number of student loans (73).

HIGHER EDUCATION LOANS20

Higher Education Loans



Md. Nasimuzzaman doing his Post Doc. Research in USA

Md. Nasimuzzaman is the first child of Mrs. Nasima Begum, a member of Centre no. 12/M of KhubjipurGurudaspur Branch, Rajshahi Zone of Grameen Bank. Nasima has been a member of Grameen Bank since 1992.The entire family of 5 members is dependent on the meagre salary of her husband and the income from a smallpiece of land that he owns. The first time Nasima took loan, it was Tk 3,000, half of which she spent on agricultureand poultry business and the rest was spent on her children’s education. She was ever alert to her sons’ education.One of her 3 sons, Nasimuzzaman, passed SSC in 1988 and HSC in 1990, withdistinction and letter marks in four subjects on both occasions. After that, hewent on to study Microbiology at Dhaka University. Having completed hishonours in 1996 and masters in 1998, he went to Japan with an associatescholarship to do his PhD. After completion his PhD, he is now doing PostDoc. Research in California University in USA. Nasima Begum, her proudmother, expressed her feelings, “It was only because of Grameen Bankthat my son got the opportunity for higher studies, and it has givenour family a lot of happiness." The financial assistance and guidanceof Grameen Bank have played a vital role in her son’s pursuit ofhigher education. Today, Nasimuzzaman is the pride of not only hisfamily but also his village.

Most important step to endpoverty is to create employmentand income opportunity for thepoor. But orthodox economics

recognised only wage-employment. It has no room for

self-employment. But self-employment is the quickest and

easiest way to create employmentfor the poor. I have been arguing

that credit should be accepted as ahuman right, because it is soimportant for a person who is

looking for an income.

Commonwealth Lecture, 2003Halving Poverty By 2015--We Can

Actually Make It Happen - Muhammad Yunus

Delivered at the Commonwealth Institute,London on March 11, 2003

Disbursement of Higher Education Loans Up toDecember, 2005.

Degree/Discipline Number Amount (Taka)Masters (General) 550 10,175,524Bachelor degree (Honours) 7,717 175,849,003MBA 31 745,000BBA 102 2,617,350B. Sc. (Engineering) 209 5,733,746M. Sc. (Agriculture) 43 1,011,600B. Sc. (Agriculture) 172 4,403,300Degree in Medicine 102 3,963,050

Total 8,926 204,498,573

In order to facilitate better educational opportunities for the children of Grameenmembers, Grameen Bank launched a scholarship programme for talented studentsin 1999.

To encourage schooling of Grameen children, Grameen Bank introduced scholarshipprogramme so that children from the poor families stay in school, and compete inboth academic and extracurricular activities. Priority is given to girls. In Bangladesheducation for girls is generally considered not as important as for boys. Even today,the general attitude of the society is such that women are supposed to take back seatsand confine themselves in the role of a housewife after marriage.

At least 50% of the scholarship money must go to girls and the remaining 50% willbe given to both boys & girls based on overall performance.

Scholarships are given annually. Up to December, 2005 Taka 19.15 million (US$ 0.33million) was distributed among 23,515 students.

SCHOLARSHIP PROGRAMME 22

Scholarship Programme [for Members’ Children]



Scholarship : 1999-2005

Categories Numbers Total

Girls Boys

Primary 4,339 2,206 6,545Junior Secondary 3,134 1,555 4,689Secondary 4,574 4,317 8,891Higher Secondary 1,213 1,670 2,883Cultural 371 136 507

Total : 13,631 9,884 23,515

A human being is born in thisworld fully equipped not only to

take care of himself (which allother life-forms can do too), but

also to contribute in enlarging thewell-being of the world as a whole

(that's where special role of ahuman being lies).

Commonwealth Lecture, 2003Halving Poverty By 2015--We Can

Actually Make It Happen - Muhammad Yunus

Delivered at the Commonwealth Institute,London on March 11, 2003

Taskia Parveen (Secondary School Level)

Taskia Parveen has the distinction of being selected as the best student in the classand earned the government scholarship in the talent pool category for Class VIII.She also made her parents proud after a similar success in Class V. She is the elderof the two children of her parents. Her mother Mrs. Akhter Banu is a Member ofGaneshpur Manda Branch, Rajshahi Zone of Grameen Bank. Taskia is carrying onwith her studies with the dream of becoming a doctor in future. Akhter Banu, hermother, took a first-time loan of Tk 5,000 from Grameen Bank, which she investedin cow rearing business. The income from that business marked the beginning of aprosperous family. Her daughter’s present success comes in continuation of thatprosperity. Today, Mrs. Akhter Banu is a worry-free mother who knows thatGrameen is solidly behind her daughter’s pursuit of higher studies with its highereducation loan programme.

STRUGGLING (BEGGARS) MEMBERS PROGRAMME24

Struggling (Beggars) MembersProgramme


To reach out to the beggars, Grameen Bank has taken up a special programme,called Struggling Members Programme which started from July 2002.Begging is the last resort for survival for a poor person, unless he/she turns

towards crime or other forms of illegal activities. Among the beggars, there aredisabled, blind, and retarded people, as well as old people with ill health.The objectiveof the programme is to provide financial services to the beggars to help them find adignified livelihood, send their children to school and to make them graduate intobecoming regular Grameen Bank members. We wish to make sure that no one in theGrameen Bank Villages has to beg for survival.

Basic features of the programme are

Existing rules of Grameen Bank do not apply to beggarmembers; they make up their own rules.

All loans will be interest-free. Loans can be of a very longterm, in order to make repayment instalments very small.For example, for a loan to buy a quilt or a mosquito-net,many borrowers are paying Tk 2.00 (3.4 cents US) perweek.

Beggar members are covered under life insurance and loaninsurance programmes without incurring any cost.

Groups and Centres are being encouraged to become patronsof this type of members.

Each member receives an identity badge with her picture andname, and Grameen Bank logo. She can display this as shegoes about her daily life, to let everybody know that she is aGrameen Bank member and this national institution standsbehind her.

Members are not required to give up begging, but areencouraged to take up an additional income-generatingactivity like selling popular consumer items door to door, or atthe place of begging.


As of 31st December, 2005 cumulative number ofmembers under this programme reaches at63,122, out of them 59,909 are women. All thezones have already come under this programme.By this time 1,283 branches of 128 areas haveimplemented the programme. So far Tk.45.92 million has been disbursed and Tk.23.69 million has already been repaid.Repayment rate is 100%.

Grameen believes that charity isnot an answer to poverty. It only

helps poverty to continue. Itcreates dependency and takes

away individual's initiative to breakthrough the wall of poverty.

Unleashing of energy and creativityin each human being is the answer

to poverty.

Expanding Microcredit Outreach to Reachthe Millennium Development Goal-SomeIssues for Attention - Muhammad Yunus,presented at the International Seminar on

Attacking Poverty with Microcredit,organized by PKSF in

Dhaka, January 8-9, 2003

Begum’s struggle in life

Begum is a member of Centre no. 49/M of Rasulpur Ghatail Branch of Grameen Bankunder its Struggling Members Programme. She had a slight congenital deformity in her handsand legs, which gradually deteriorated due to lack of treatment. She lost her father at theage of six. Then her mother married again. Begum had a miserable childhood. She grewup in abject poverty and even had to do begging. She married at the age of 25. Withinone year of marriage, she gave birth to a baby boy. Her husband Rahim abandoned herand left the locality for good. Under these circumstances, she was forced to resort tobegging for survival.

The Manager of Rasulpur Ghatail Branch of Grameen Bank used to notice her at the localbus stand begging to the waiting passengers. The Manager then took the initiative tobringing her under the Struggling Members Programme and giving her an interest-free loanof Tk 500 for the first time. Begum wanted to buy a goat but she could not afford it withthe loan she received. So, she started banana cultivation, along with her son, on a smallpiece of land she owned. Despite damage to the plant caused by storm, she could sellbanana worth Tk 1,000. Her success raised her profile in her locality as a strugglingmember. She successfully repaid the loan with the proceeds from banana sales.

She took a loan of Tk 1,000 in the second cycle. With that and some personal savings,she bought her son a cow. She now repays her loan in weekly instalments and makes aweekly saving deposit of Tk 5. She wishes to give up begging altogether once her sonbecomes capable of earning. The opportunity to come under Grameen Bank’s StrugglingMembers Programme has enhanced her mental strength and will-power by a great deal. Sheis full of praise for Grameen Bank.

DISBURSEMENT OF LOANS26

2005 : Disbursement of Loans Listed underBroad Categories of Business Activities


Female Male TotalCATEGORIES OF ACTIVITIES No. of Amount of No.of Amount of No. of Amount of

Loans Loans Loans Loans Loans Loans

Processing & Manufacturing 46,015 410,821,444 915,527 5,634,549,214 961,542 6,045,370,658Agriculture & Forestry 22,711 242,130,895 605,148 4,519,187,534 627,859 4,761,318,429Livestock & Fisheries 65,223 584,046,317 1,571,217 11,367,391,688 1,636,440 11,951,438,005Services 18,815 145,188,258 279,159 1,890,536,411 297,974 2,035,724,669Trading 53,404 521,109,709 884,859 7,656,712,794 938,263 8,177,822,503Peddling 1,493 12,912,100 48,929 455,657,776 50,422 468,569,876Shop keeping 32,017 361,936,235 547,877 5,185,303,209 579,894 5,547,239,444

Total : 239,678 2,278,144,958 4,852,716 36,709,338,626 5,092,394 38,987,483,584

CATEGORIES OF ACTIVITIES

[15.51%] Processing & Manufacturing

[12.21%] Agriculture & Forestry

[30.65%] Livestock & Fisheries

[5.22%] Services

[20.98%] Trading

[1.20%] Peddling

[14.23%] Shop keeping

[Amount in Taka]


2005:Top 25 items for which Memberstook Loans

F E M A L E M E M B E R S M A L E M E M B E R S

Order Item No. of Loans Amount Order Item No. of Loans Amount

1 Milch cow 741,606 5,803,864,432 1 Milch cow 33,683 334,354,914 2 Cow fattening 616,714 4,170,082,329 2 Cow fattening 27,237 207,628,987 3 Grocery shop 332,765 3,293,398,801 3 Grocery shop 18,075 199,872,314 4 Paddy husking 498,268 2,363,727,524 4 Paddy husking 24,335 191,108,571 5 Rice/Paddy trading 243,776 1,887,435,869 5 Rice/Paddy trading 18,498 157,750,732 6 Stationery shop 137,217 1,185,052,219 6 Stationery shop 9,843 115,392,237 7 Bamboo works 148,196 1,163,231,942 7 Land lease 9,034 105,327,331 8 Land lease 133,684 1,086,633,894 8 Vegetables trading 6,468 61,278,339 9 Paddy cultivation 142,127 868,221,683 9 Rickshaw 7,726 60,647,717 10 Cloths trading 69,859 790,355,686 10 Bamboo works 6,520 59,289,876 11 Vegetables trading 97,544 755,148,143 11 Betelleaf cultivation 3,451 42,142,856 12 Fish trading 98,939 697,205,762 12 Cloths trading 2,961 40,139,677 13 Village Phone 93,383 661,735,798 13 Timber trading 2,671 36,698,200 14 Pisciculture 81,889 646,358,894 14 Fish trading 3,993 36,413,935 15 Rickshaw 94,935 614,844,691 15 Higher education loan 4,981 33,724,829 16 Other business 33,600 541,666,544 16 Weaving (Saree) 2,989 31,242,984 17 Vegetables cultivation 54,427 503,645,257 17 Shop trading 3,956 28,803,412 18 Betelleaf cultivation 49,688 391,715,446 18 Van purchase 3,497 22,037,442 19 Poultry raising 67,455 371,106,014 19 Paddy cultivation 2,656 21,933,974 20 Timber trading 32,659 313,330,560 20 Vegetables cultivation 1,963 21,774,900 21 Land cultivation 37,389 307,806,535 21 Cloths shop 1,957 20,645,744 22 Cane works 35,363 302,604,534 22 Stationery goods trading 2,154 19,778,650 23 Shop trading 35,862 290,706,810 23 Land cultivation 1,855 17,999,200 24 Cloths shop 31,259 280,257,217 24 Salt trading 1,474 17,451,343 25 Farming 46,145 270,813,157 25 Puffed rice making 1,447 17,016,162

[Amount in Taka]

F E M A L E & M A L E M E M B E R S

DISBURSEMENT OF MICROENTERPRISE LOANS28

2005 : Disbursement of Microenterprise LoansListed under Broad Categories of Business Activities


Female Male TotalCATEGORIES OF ACTIVITIES No. of Amount of No.of Amount of No. of Amount of

Loans Loans Loans Loans Loans Loans

Trading 5,090 111,347,209 73,352 2,078,433,284 78,442 2,189,780,493Shop keeping 4,441 86,292,309 53,134 1,572,045,315 57,575 1,658,337,624Livestock & Fisheries 3,405 68,433,366 53,143 1,487,909,839 56,548 1,556,343,205Services 1,565 17,326,688 100,049 826,110,363 101,614 843,437,051Processing & Manufacturing 2,580 43,618,570 23,769 766,652,121 26,349 810,270,691Agriculture & Forestry 2,308 38,694,892 23,804 685,320,083 26,112 724,014,975Peddling 55 1,653,300 5,393 136,662,661 5,448 138,315,961

Total : 19,444 367,366,334 332,644 7,553,133,666 352,088 7,920,500,000

CATEGORIES OF ACTIVITIES

[27.65%] Trading

[20.94%] Shop keeping

[19.65%] Livestock & Fisheries

[10.65%] Services

[10.23%] Processing & Manufacturing

[9.14%] Agriculture & Forestry

[1.75%] Peddling

[Amount in Taka]


2005 :Top 25 items for which Members tookMicroenterprise Loans

F E M A L E M E M B E R S M A L E M E M B E R S

Order Item No. of Loans Amount Order Item No. of Loans Amount

1 Grocery shop 35,290 1,125,956,813 1 Grocery shop 2,844 56,795,1212 Milch cow 26,846 788,161,132 2 Milch cow 2,245 46,501,6383 Village Phone 93,383 661,735,798 3 Rice/Paddy trading 1,386 24,397,9894 Cow fattening 18,500 426,398,872 4 Stationery shop 900 17,401,6085 Rice/Paddy trading 11,950 378,464,770 5 Land lease 915 16,128,0206 Other business 10,255 336,484,709 6 Cloths trading 507 14,547,5007 Cloths trading 4,350 251,354,137 7 Vegetables trading 731 13,194,5008 Stationery shop 10,652 250,903,228 8 Cow fattening 761 11,468,7869 Bamboo works 3,688 174,960,277 9 Paddy husking 661 10,834,10010 Paddy husking 4,355 174,777,457 10 Timber trading 395 10,268,40011 Pisciculture 3,566 174,345,736 11 Village Phone 1,141 9,627,43812 Vegetables trading 6,981 153,531,994 12 Shop trading 299 9,423,10013 Land lease 4,265 151,859,779 13 Betelleaf cultivation 347 6,652,96614 Fish trading 3,407 126,962,845 14 Bamboo works 339 6,532,25015 Vegetables cultivation 2,850 102,686,062 15 Poultry raising 166 5,897,54016 Timber trading 3,929 101,400,551 16 Land cultivation 443 5,651,00017 Shop trading 3,628 86,692,059 17 Cloths shop 353 5,513,04018 Paddy cultivation 2,555 82,049,493 18 Stationery goods trading 149 4,449,50019 Cloths shop 2,307 72,606,096 19 Fish trading 215 4,234,20020 Power Tiller 2,108 72,352,840 20 Vegetables cultivation 224 3,865,80021 Cane works 1,528 66,533,936 21 Paddy cultivation 257 3,850,00022 Betelleaf cultivation 1,950 65,775,405 22 Pisciculture 189 3,715,00223 Onion trading 2,984 61,360,800 23 Cane works 174 3,236,30024 Medicine shop 2,282 56,611,867 24 Weaving (Saree) 142 3,042,50025 Poultry raising 2,158 55,668,431 25 Betelleaf trading 138 3,015,000

[Amount in Taka]

F E M A L E & M A L E M E M B E R S

ZONE-WISE COMPARATIVE STATEMENT 30

Zone-wise Comparative Statement [up to December 31, 2005]


Sl. Zone Amount Outstanding Members Outstanding/ Outstanding MemberNo. Disbursed Amount Zone Zone Female No of Branch Per Loanee per

(In million Taka) (In million Taka) Percentage Numbers Percentage Percemtage Branches (In million Taka) (In Taka) Branch

1 Chittagong 18927.12 1864.95 6.67 265884 4.77 94.02 110 16.95 7527.80 24172 Tangail 18138.67 1542.79 5.52 281425 5.04 85.94 86 17.94 6710.24 32723 Rangpur 13212.59 1466.31 5.24 386285 6.92 90.57 101 14.52 4430.09 38254 Dhaka 24359.48 2730.19 9.76 316868 5.68 94.70 80 34.13 9158.84 39615 Patuakhali 9922.67 1101.71 3.94 202218 3.62 89.47 75 14.69 6218.21 26966 Bogra 14807.33 1444.14 5.16 315599 5.66 96.53 84 17.19 4769.94 37577 Sylhet 6658.67 648.77 2.32 181096 3.25 95.53 70 9.27 4634.72 25878 Rajshahi 15405.97 1224.73 4.38 306295 5.49 99.38 101 12.13 4427.44 30339 Dinajpur 11448.69 1526.14 5.46 338931 6.07 98.48 75 20.35 4763.10 451910 Faridpur 13044.87 1301.10 4.65 270066 4.84 99.70 85 15.31 5003.23 317711 Comilla 13459.66 1692.18 6.05 299324 5.36 99.99 85 19.91 5901.09 352112 Mymensingh 6462.56 989.43 3.54 277163 4.97 100.00 100 9.89 4641.84 277213 Narayanganj 26558.93 2478.18 8.86 332599 5.96 98.54 87 28.48 8560.94 382314 Khulna 7188.19 1093.74 3.91 229440 4.11 99.93 88 12.43 4733.26 260715 Noakhali 11582.01 1254.25 4.48 260741 4.67 99.94 89 14.09 4760.22 293016 Jamalpur 6379.17 893.75 3.20 234334 4.20 95.85 60 14.90 5267.86 390617 Nilphamari 6603.00 908.01 3.25 236367 4.24 90.12 54 16.82 4654.25 437718 Hobiganj 5378.34 648.04 2.32 160356 2.87 99.31 48 13.50 5513.61 334119 Pabna 9642.34 926.81 3.31 223020 4.00 96.32 64 14.48 4797.03 348520 Barisal 11058.48 1343.70 4.80 244390 4.38 98.45 109 12.33 5825.66 224221 Jhenaidah 6258.67 891.40 3.19 216998 3.89 100.00 84 10.61 4238.05 2583

Total 256497.40 27970.31 100.00 5579399 100.00 96.27 1735 16.12 5716.60 3216


Grameen Bank monthly updateDecember, 2005

(a) On the last day of each year, 50 per cent provision is made against the outstandingamounts of flexible loans with age of less than two years, and 100 per cent provisionis made against the outstanding amounts of flexible loans with age of two years andmore. The portions of flexible loans which complete the third year are written offexactly on the date following their completion.

(b) Amount repaid as a percentage of amount due.(c) If a borrower misses ten consecutive instalments, the entire outstanding loan is

treated as an overdue loan.

(d) On the last day of each year, 100 per cent provision is made against all overdueloans. Entire outstanding amount of overdue loans are written off one year afterthey became overdue.

(e) In case of one-year loan, if the borrower fails to repay half the loan amount, withinterest, within 26 weeks, entire unrepaid amount becomes overdue. In case ofloans with longer duration, if the borrower fails to repay the total principalamount and interest scheduled to be repaid within each segment of 26 weeks,entire unrepaid amount falls overdue.

Note : Current Exchange Rate : 1 US$ = Taka 65.79.

SL. NO. PARTICULARS [In million Taka] SL. NO. PARTICULARS [In million Taka]

1.0 Cumulative Amount Disbursed Since Inception 256,497.402.0 Cumulative Amount Repaid Since Inception 228,527.093.0 Amount Disbursed this Month 4,231.704.0 Amount Repaid this Month 3,220.565.0 Outstanding Loans

5.1 Basic Loan 25,678.545.2 Flexible Loan (a) 1,431.805.3 Housing Loan 613.255.4 Other Loans 246.725.5 Total : 27,970.31

6.0 Rate of Recovery (b) 99.017.0 Total Outstanding of Borrowers

Missing 5 to 9 Consecutive Installments (c)

7.1 Basic Loan 70.767.2 Flexible Loan 171.457.3 Total : 242.21

8.0 Overdue Loan (d)

8.1 Basic Loan (e) 104.418.2 Flexible Loan 307.228.3 Housing Loan 67.338.4 Other Loans 0.008.5 Total : 478.95

9.0 Microenterprise Loan (Cumulative)9.1 No. of Microenterprise Loanees 668,3899.2 Amount Disbursed 14,500.769.3 Amount Repaid 8,347.53

10.0 Balance of Deposits10.1 Members' Deposit 20,138.3710.2 Non-Members' Deposit 11,521.1910.3 Total : 31,659.56

11.0 Deposits to Outstanding11.1 Deposits as Percentage of Outstanding Loans 11311.2 Deposits and Own Resources as Percentage of

Outstanding Loans 13511.3 No. of Branches with more in Deposits than in

Outstanding Loans 978

12.0 Beggar Members12.1 No. of Beggar Members 63,12212.2 Amount Disbursed (Cumulative) 45.9212.3 Amount Repaid (Cumulative) 23.6912.4 Amount of Savings (Balance) 3.52

13.0 Cumulative Number of Village Phones 187,18714.0 Cumulative Number of Houses Built with Housing Loans 627,05815.0 Life Insurance Fund (Cumulative)

15.1 No. of deaths among all Borrowers 81,75015.2 Amount paid out from Life Insurance Fund 158.97

16.0 Loan Insurance16.1 Balance in Loan Insurance Savings 1,990.5416.2 No. of deaths among Insured

Borrowers (Cumulative) 40,33816.3 Amount of Outstanding Principal and Interest

of the Deceased Borrowers paid out from Insurance Fund (Cumulative) 308.97

17.0 Higher Education Loan (Cumulative)17.1 No. of Female Students 1,73917.2 No. of Male Students 7,18717.3 Total : 8,92617.4 Amount Disbursed (Female) 37.2317.5 Amount Disbursed (Male) 167.2717.6 Total : 204.50

18.0 Scholarship (Cumulative)18.1 Scholarship Recipient (Female) 13,63118.2 Scholarship Recipient (Male) 9,88418.3 Total : 23,51518.4 Scholarship Amount (Female) 10.9218.5 Scholarship Amount (Male) 8.2418.6 Total : 19.15

19.0 Number of Members19.1 Female 5,371,15619.2 Male 208,24319.3 Total : 5,579,399

20.0 Number of Groups 877,14221.0 Number of Centres 99,50222.0 Number of Villages 59,91223.0 Number of Branches 1,73524.0 Number of Branches with Computerised Accounting and MIS 1,455

Past Five years of Grameen Bank

In 2005, Grameen Bank had atotal of 1,944 offices, includingbranch offices, area offices,zonal audit offices, zonal officesand the head office. Comparedto the previous year, this is a27% increase in the number ofoffices. The number of officesincreased due to the expansionof the number of branches ofGrameen Bank.

NUMBER OF OFFICES

The number of full time staffexcluding ManagementTrainees was 14,108 in 2005;while, the number of traineeswas 2034. The increase in thenumber of full time staff in2005 was 17% compared tothe previous year. Overall, thetotal number of employees inGrameen Bank stood at16,142 in 2005, a 24%increase compared to theprevious year.

NUMBER OF FULL-TIME STAFF, TRAINEES & EMPLOYEES

Up to 2001, the cumulativenumber of members was 2.38million. In 2005, this figurestood at 5.58 million. Itrepresents an increase of134.59% from 2001 to 2005and an average annualgrowth of 26.92% during thefive-year period.

GROWTH OF MEMBERSHIP (CUMULATIVE)

Up to 2001, the cumulativenumber of branches was 1,173.Up to 2005, this figure reached1,735. It represents an increaseof 49.57% from 2001 to 2005and an average annual growthof 9.91% during the five-yearperiod. Growth of number ofbranches in 2005 is 27.76%over the previous year.

NUMBER OF BRANCHES (CUMULATIVE)

Historically, the majority ofmembers of Grameen Bank havebeen women. The years underconsideration are no exception.The percent of womenmembers throughout 2001 to2005 was within close proximityof the 95% mark.

PERCENT OF WOMEN MEMBERS

In 2005, the number ofborrowers per branch (year-end)was 2,912, a 7% increasecompared to the previous year.In 2004, the number stood at2,722, a 13% increasecompared to the previous year.

NUMBER OF BORROWERS PER BRANCH (YEAR-END)

PAST FIVE YEARS OF GRAMEEN BANK32


[Number in Million]


Up to 2001, the cumulativenumber of villages covered was40,447. In 2005, this figure stoodat 59,912. It represents an increaseof 48.94% from 2001 to 2005 andan average annual growth of9.79% during the five-year period.Concurrently, with the increase inthe number of branches there wasa 24% increase in the number ofvillages covered compared to theprevious year (2004).

NUMBER OF VILLAGES COVERED (CUMULATIVE)

The highest amount of loanwas disbursed in the month ofDecember (Tk. 4,231 million).On the other hand, the lowestamount of loan was disbursedin January (Tk. 2,286 million).The average amount of loandisbursed per month duringthe twelve months was Tk.3,265 million.

2005: DISBURSEMENT OF LOANS

Up to 2001, the cumulativenumber of housing loanswas 545,121. Up to 2005,this figure reached 627,058.It represents an increase of17.64% from 2001 to 2005and an average annualgrowth of 3.53% during thefive-year period.

CUMULATIVE NUMBER OF HOUSING LOANS

Up to 2001, Tk. 154,105million was disbursed as loans.Up to 2005, this figure reachedTk. 256,497 million, whichtranslates to an increase of85.77% during the five-yearperiod. The average annualgrowth of cumulativedisbursement of loans duringthis time was 17.15%.

CUMULATIVE DISBURSEMENT OF LOANS

Up to 2001, Tk. 7,567 millionwas disbursed as housing loans.In 2005, this figure stood at Tk.8,343 million, which translatesto an increase of 11.09%during the five-year period. Theaverage annual growth ofcumulative disbursement ofhousing loans during this timewas 2.22%.

CUMULATIVE DISBURSEMENT OF HOUSING LOANS

In 2005, the total assets ofGrameen Bank stood at Tk.44,624 million, a 33%increase compared to theprevious year. In 2004, totalassets increased 23%compared to the previousyear. This upward trend in theassets of Grameen Bank is theresult of healthy loan portfoliogrowth.

TOTAL ASSETS

[Amount in thousand Million Taka]

[Amount in Million Taka][Amount in Million Taka]

[Amount in Million Taka]

COMPARATIVE CONSOLIDATED STATEMENT34

Comparative Consolidated Statementfor the Years 2004 & 2005


Sl. Particulars 2004 2005 Increase/Decrease During 2005

1 Basic Loans : Disbursed 72,642.6 110820.2 38,177.6Repaid 55,517.4 85141.6 29,624.2

2 Flexible Loans Disbursed 6,223.3 6894.4 671.1Repaid 4,604.4 5462.6 858.2

3 Housing Loans : Disbursed 8,147.3 8334.3 187Repaid 7,013.3 7721.1 707.8

4 Other Loans : Disbursed 130,300.8 130448.5 147.7Repaid 130,170.7 130201.8 31.1

5 Outstanding : Loans 20,008.2 27970.3 7962.1Interest 2766.2 2393.6 -372.6

Average Outstanding per Loanee (In Taka) 5,412 5,714 2006 Overdue Loans : 368.5 479 110.57 Overall Repayment percentage 99.05 99.01 -0.048 Deposits Balance : GB Members 13,793.1 20,138.4 6,345.39 Number of Members : Female 3,883,383 5,371,156 1,487,773

Male 176,249 208,243 31,994Total 4,059,632 5,579,399 1,519,767

10 Number of Loanees 3,696,812 4,892,818 1,287,35011 Number of Centres 81,609 99,502 17,89312 Number of Villages Covered 48,472 59,912 11,44013 Number of Branches in Operation 1,358 1,735 37714 Number of Areas 130 166 3615 Number of Zones 18 21 317 Information Management Centres 126 152 2618 Education Loans Disbursed 100.2 204.5 104.319 Number of Education Loanees 5,257 8,926 3,66920 Number of GB Scholarships 14,550 23,515 8,96521 Amount of GB Scholarships 12.3 19.2 6.9

[Amount in million Taka]


Poverty Alleviation Survey on Grameen Bank Members(In order of cumulative percentage of members free from poverty)

Zone No. of Free from No. of poverty free Members after Members left group No. of Members (%) of Members Completely free Members poverty last Members crossing poverty line after overcoming still below free from from povertysurveyed year's target (No. again fell below poverty poverty line poverty No. of No. of

of Members) Current Cumulative Current Cumulative Current Cumulative Current Cumulative Centres Branches

Comilla 57,850 12,530 13,148 52,654 - - 2,805 5,196 5,196 23 91 2,018 39Noakhali 48,534 19,960 10,910 41,942 - 268 2,044 10,879 6,592 22 86 1,252 21Chittagong 90,095 12,562 11,474 71,206 - 108 181 2,374 18,889 13 79 848 17Dhaka 117,796 13,081 8,898 91,767 - 4,010 1,285 10,467 26,029 8 78 1,655 24Khulna 34,908 10,982 6,873 26,404 - 83 1,215 3,587 8,504 20 76 809 13Jhenida 29,683 8,177 7,060 21,977 - - 650 1,763 7,706 24 74 914 17Barisal 51,968 10,480 8,303 38,440 - - 1,140 6,127 13,528 16 74 231 -Patukhali 49,737 7,932 5,383 36,240 - 35 221 6,275 13,497 11 73 319 -Faridpur 81,367 16,188 14,012 59,117 8 662 1,576 4,444 22,250 17 73 1,067 13Rajshahi 70,636 15,050 10,145 51,143 - 303 3,086 15,694 19,493 14 72 1,291 12Narayanganj 153,820 22,366 11,656 99,090 - 481 715 11,052 54,730 8 64 1,059 18Tangail 161,350 30,002 13,770 100,530 50 2,473 87 1,304 60,820 9 62 275 -Pabna 83,535 11,717 9,173 50,478 - 256 1,203 15,480 33,057 11 60 51 -Bogra 149,133 17,813 6,864 83,584 17 230 1,496 11,048 65,549 5 56 32 -Sylhet 71,603 13,772 5,370 37,392 - 373 333 2,299 34,211 8 52 51 -Rangpur 185,849 22,120 10,207 86,520 - 454 60 407 99,329 5 47 87 -Dinajpur 146,654 16,253 5,840 64,032 - - 89 748 82,622 4 44 23 -Hohiganj 67,507 8,189 1,810 28,223 85 237 1,651 1,711 39,284 3 42 - -Nilphamari 103,129 13,633 8,272 40,509 - 869 143 1,504 62,620 8 39 2 -Jamalpur 111,376 14,594 11,082 39,391 - 1,500 - 249 71,985 10 35 - -Mymensingh 93,687 12,504 5,759 24,167 - 44 369 2,401 69,520 6 26 8 -

Total 1,960,217 309,905 186,009 1,144,806 160 12,386 20,349 115,009 815,411 9 58 11,992 174

Surveyed year : 2005

Cumulative percentage of Members free from poverty

HISTORICAL DATA SERIES : 1976-200536

Grameen Bank Historical Data Series :1976-2005


Performance Indicator 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

Cumulative Disbursement (All Loans) 0.01 0.08 0.35 3.06 20.17 53.7 95.61 195 499.31 927.76 1469.5 2279.5 3560 5328.2 7590.7 10230.3 15434

Disbursement During the Year (All Loans) 0.01 0.07 0.27 2.71 17.11 33.53 41.91 99.34 304.36 428.45 541.73 810.03 1280.4 1768.3 2262.5 2639.6 5203.7

Year-end Outstanding Amount 0.01 0.05 0.24 1.88 13.19 21.32 31.63 72.07 177.03 225.68 301.51 457.74 723.87 996.95 1270.8 1585.42 3168.88

Housing Loan Disbursement During the Year - - - - - - - - 3.6 17.2 5.7 140.7 170.4 236.3 224.6 301.9 559.3

Number of Houses Built (cumulative) - - - - - - - - 317 1581 2042 23408 44556 67841 91157 118717 157334

Total Deposits (Balance) - - 0 0.22 1.48 4.23 7.37 18.51 38.33 79.82 122.67 221.88 324.46 566.65 851.43 1381.03 2176.32

Deposits of GB Members (Balance) - - 0 0.22 1.48 4.23 7.37 18.51 38.33 71.62 112.39 217.37 285.39 415.77 543.52 951.8 1386.46

GB Members' Deposit as % of Total Deposit - - - 100 100 100 100 100 100 90 92 98 88 73 64 69 64

Number of Groups - 4 45 377 2935 4818 6243 11667 24211 34324 46869 67831 98073 132452 173907 213286 284889

Number of Members 10 70 290 2200 14830 24128 30416 58320 121114 171622 234343 339156 490363 662263 869538 1066426 1424395

Percentage of Female Members 20 14 24 41 31 39 39 46 56 65 74 81 86 89 91 92 94

Number of Villages covered 1 2 4 17 363 433 745 1249 2268 3666 5170 7502 10552 15073 19536 25248 30619

Number of Branches 1 1 1 6 24 24 54 86 152 226 295 396 501 641 781 915 1015

Profit/Loss (For the Year) - - - - - - - -3.26 4.25 0.4 0.36 0.44 1.17 2.25 3.1 -8.31 -5.65


1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

26056.1 39968.5 53632 65509.8 81780.4 100899.8 116597.7 130559.1 146538.2 162286.24 183575.33 209166.76 248163.17

10622.1 13912.4 13663.5 11877.8 16270.6 19119.4 15697.9 13961.4 15979.1 15748.04 21289.09 25591.43 38996.41

6166.98 7933.38 8298.88 8639.68 10590.28 12316.68 11035.58 10435.98 11068.08 11395.12 15086.21 18874.64 27357.06

1673 1338.6 712.96 168.7 687.7 973.9 222.7 73.29 56.3 120.62 177.66 282.05 187.08

258194 295702 331201 329040 402747 506680 511583 533041 545121 558055 578532 607415 627058

3150.21 4132.56 4767.2 5211.95 5804.35 5404.45 6013.62 6611.85 7697.14 9424.15 14715.75 20717.79 31659.56

2722.01 3413.67 4047.99 3782.94 4562.86 4844.45 5523.95 5243.55 3827.6 7305.08 9972.15 13793.14 20138.37

86 83 85 73 79 90 92 79 50 78 68 67 64

372298 412145 424993 433791 465384 486870 494044 503001 504651 513141 577886 685083 877142

1814916 2013130 2065661 2059510 2272503 2368347 2357083 2378356 2378601 2483006 3123802 4059632 5579399

94 94 94 94 95 95 95 95 95 95 95 96 96

33667 34913 35533 36420 37937 39045 39706 40225 40447 41636 43681 48472 59912

1040 1045 1055 1079 1105 1137 1149 1160 1173 1178 1195 1358 1735

9.56 21.67 15.03 19.02 14.32 10.43 76.93 11.14 58.45 59.67 357.52 422.13 1000.44

(Amount In Million Taka)

HISTORICAL DATA SERIES : 1976-200538

Grameen Bank Historical Data Series :1976-2005


Performance Indicator 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

Cumulative Disbursement (All Loans) 0.001 0.006 0.026 0.21 1.31 3.37 5.46 9.63 21.83 38.33 56.51 83.04 124.16 179.35 248.08 322.43 459.37

Disbursement During the Year (All Loans) 0.001 0.005 0.02 0.18 1.1 2.06 2.09 4.17 12.2 16.5 18.18 26.53 41.12 55.19 68.73 74.35 136.94

Year-end Outstanding Amount 0.0003 0.004 0.016 0.12 0.83 1.17 1.44 3.03 7.1 8.69 10.09 14.94 23.17 31.02 38.6 44.43 83.06

Housing Loan Disbursement During the Year - - - - - - - - 0.14 0.66 0.19 4.59 5.45 7.35 6.82 8.46 14.72

Number of Houses Built (cumulative) - - - - - - - - 317 1581 2042 23408 44556 67841 91157 118717 157334

Total Deposits (Balance) - - - 0.01 0.1 0.26 0.37 0.78 1.54 3.07 4.1 7.24 10.39 17.63 25.86 38.71 57.05

Deposits of GB Members (Balance) - - - 0.01 0.1 0.26 0.37 0.78 1.54 2.76 3.76 7.1 9.14 12.94 16.51 26.68 36.34

GB Members' Deposit as % of Total Deposit - - - 100 100 100 100 100 100 90 92 98 88 73 64 69 64

Number of Groups - 4 45 377 2935 4818 6243 11667 24211 34324 46869 67831 98073 132452 173907 213286 284889

Number of Members 10 70 290 2200 14830 24128 30416 58320 121114 171622 234343 339156 490363 662263 869538 1066426 1424395

Percentage of Female Members 20 14 24 41 31 39 39 46 56 65 74 81 86 89 91 92 94

Number of Villages covered 1 2 4 17 363 433 745 1249 2268 3666 5170 7502 10552 15073 19536 25248 30619

Number of Branches 1 1 1 6 24 24 54 86 152 226 295 396 501 641 781 915 1015

Profit/Loss (For the Year) - - - - - - - -0.0059 0.0068 0.0008 0.0003 0.0003 0.0013 0.0022 0.0027 -0.0064 -0.15


1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

725.39 1072.77 1405.94 1691.74 2062.96 2471.61 2792 3060.44 3347.98 3620.5 3986.46 4416.82 5025.61

266.02 347.38 333.17 285.8 371.22 408.65 320.39 268.44 287.54 272.52 365.96 430.36 608.79

157.56 198.33 206.44 213.54 233.01 253.95 216.38 193.26 194.18 196.81 258.1 312.96 415.82

41.9 33.42 17.39 4.06 15.69 20.81 4.54 1.41 1.01 2.09 3.05 4.74 2.95

258194 295702 331201 329040 402747 506680 511583 533041 545121 558055 578532 607415 627058

79.49 103.11 117.56 125.14 132.27 115.21 122.52 126.78 137.92 162.77 227.66 343.52 481.22

68.69 85.17 99.83 90.83 103.98 103.27 112.54 100.54 68.58 126.17 170.61 228.7 306.1

86 83 85 73 79 90 92 79 50 78 68 67 64

372298 412145 424993 433791 465384 486870 494044 503001 504651 513141 577886 685083 877142

1814916 2013130 2065661 2059510 2272503 2368347 2357083 2378356 2378601 2483006 3123802 4059632 5579399

94 94 94 94 95 95 95 95 95 95 95 96 96

33667 34913 35533 36420 37937 39045 39706 40225 40447 41636 43681 48472 59912

1040 1045 1055 1079 1105 1137 1149 1160 1173 1178 1195 1358 1735

0.24 0.54 0.37 0.46 0.33 0.22 1.57 0.21 1.05 1.03 6.15 7.00 15.21

(Amount In Million US$)

A completely new world can be createdby making space for the social

entrepreneurs and the social investors inthe business world. This is a veryimportant agenda for all of us.

Eliminating poverty will become somuch easier if social entrepreneurs can

take up the challenge of ending poverty,and social investors can put their

investment money to support the workof the social entrepreneurs.

Commonwealth Lecture, 2003 Halving Poverty By 2015--We Can Actually Make It Happen - Muhammad YunusDelivered at the Commonwealth Institute, London on March 11, 2003

COMPUTERIZATION PROGRAMME40

Computerization Programme



ComputerizationProgramme

COMPUTERIZATION PROGRAMME42

Computerization Programme


Since its modest beginning in 1993, GB computerization programme has come a longway. At the end of 2005, 1,455 branches have been compurterized. To increase theoperational efficiency of any financial institution, it is important to minimise paper

work at all levels particularly at branch level. Given the limitations of power supply, it isstill not possible to derive maximum benefit from the computerization of Grameenmanagement information system, especially in the rural areas.

During the year 2005, we set up another 26 Information Management Centres at the arealevel utilising the existing 239 computers, which were earlier installed in the branches. Inaddition, 282 new computers were also added in last seven years. At the InformationManagement Centres, three branches are served by one computer. All branches within anarea receive services from the centre. Each centre provides all types of loan monitoringand accounting services on a regular basis. Therefore, it has been possible to both reducecosts and increase the efficiency of the computerization programme.

When the Information Management Centres attain their full capacity to serve 3 brancheswith one computer, it would be possible to serve all the branches at the end of 2006.

Information regarding the progress of the computerization programme for the end of 2005through the area level Information Management Centres is furnished in the next page.

During the year, all the zonal offices were brought under Internet network. As a result, datatransfer has become both easy and less expensive. Grameen Communications, anindependent company, provides necessary technical assistance for supporting thecomputerization programme of Grameen Bank.


Sl.No. Zones No. of No. of No. of Centres Computers Branches

1 Chittagong 9 31 922 Tangail 7 29 843 Rangpur 7 30 864 Dhaka 8 27 805 Patuakhali 6 22 536 Bogra 7 28 847 Sylhet 7 22 618 Rajshahi 8 30 869 Dinajpur 7 25 7410 Faridpur 8 28 8311 Comilla 7 25 6312 Mymensingh 9 28 7113 Narayanganj 8 25 7214 Khulna 8 22 5715 Noakhali 8 29 8816 Jamalpur 5 15 4517 Nilphamari 5 16 4718 Hobiganj 4 14 4119 Pabna 6 21 6120 Barisal 9 30 5621 Jhenaidah 9 24 71

Total : 151 521 1,455

Branch Coverage Scenario underComputerization Programme

Computerized [84%] Non-computerized [16%]

I strongly feel that ICT can changethe fate of the poor dramatically, if

we can ensure access to ICT forthe poor. ICT has the wonderful

capacity to empower an individualperson, even the poorest.

Petersberg Prize, 2004 - AcceptanceSpeech - Professor Muhammad Yunus

received the award on June 27, 2004, at theDevelopment Gateway Forum 2004, held

at Petersberg Conference Center,Konigswinter, Germany.

AUDITORS’ REPORT AND AUDITED FINANCIAL STATEMENTS44

AUDITORS’ REPORT AND AUDITED FINANCIAL STATEMENTSOFGRAMEEN BANKFOR THE YEAR ENDED 31ST DECEMBER 2005

Hoda Vasi Chowdhury & CoChartered Accountants BTMC Bhaban (8th level)7-9 Karwan Bazar Dhaka –1215

S. F. Ahmed & CoChartered Accountants House 25, Road 13/A Block – D, Banani Dhaka –1213

Submitted by:


Auditors' Report of Grameen Bank


We have audited the accompanying Balance Sheet of Grameen Bank (GB) as at 31 December 2005 and the related Profitand Loss Account, Cash Flow Statement, Statement of Changes in Equity and notes (1 to 30) to the Financial Statements forthe period then ended.

Respective Responsibilities of the Bank and Auditors

Grameen Bank management is responsible for preparing these financial statements, which give a true and fair view inaccordance with Bangladesh Accounting Standards (BASs). Our responsibility is to express an independent opinion based onour audit on those financial statements and to report our opinion to the members.This responsibility is established byBangladesh Standards on Auditing (BSAs.)

Basis of Audit Opinion

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs). Our audit includes examining, on atest basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit also includes an assessmentof the significant estimates and judgments made by the management of the GB in the preparation of the financial statements,and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequatelydisclosed.

We planned and performed our audit so as to obtain all the information and explanations, which we considered necessary inorder to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from materialmisstatement. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in thefinancial statements. We believe that our audit provides a reasonable basis for our opinion.

Opinion

The financial statements, prepared in accordance with International Accounting Standards, give a true and fair view of thestate of affairs of Grameen Bank as of 31 December 2005 and of the results of its operations and its cash flow for the yearthen ended and comply with the Grameen Bank Ordinance 1983 (as amended up to 1995) and other applicable laws andregulations.

We also report that

1. we have obtained all the information and explanations which to the best of our knowledge and belief were necessaryfor the purpose of our audit and made due verification thereof;

2. in our opinion, proper books of account as required by the ordinance have been kept by the Bank so far as itappeared from our examination of those books and proper returns adequate for the purpose of our audit have beenreceived from branches not visited by us;

3. the Bank's Balance Sheet and Profit and Loss Account together with the annexed notes (1 to 30) dealt with by thereport are in agreement with the books of account and returns;

4. the expenditure incurred and payment made were for the purpose of the Bank's business;

AUDITORS' REPORT OF GRAMEEN BANK 46

Auditors' Report of Grameen Bank


5. read in conjunction with the notes to the Financial Statements, the financial position of the Bank as on 31 December2005 and the profit for the year then ended have been properly reflected in the financial statements, the financialstatements have been prepared in accordance with the Generally Accepted Accounting Principles;

6. adequate provisions have been made for loans and advances and other assets which are, in our opinion, doubtful ofrecovery;

7. the Financial Statements have been drawn up in conformity with Grameen Bank Ordinance 1983 and in accordancewith the accounting rules and regulations;

8. the Financial Statements conform to the prescribed standards set in the accounting regulations issued by theBangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

9. the records and statements submitted by the branches have been properly maintained and consolidated in the financialstatements;

10. the information and explanations required by us have been received and found satisfactory.

Hoda Vasi Chowdhury & Co. S.F.Ahmed & Co.Chartered Accountants Chartered Accountants

Dated, 21 June 2006.Dhaka, Bangladesh


Balance SheetAs at 31 December 2005


Note 2005 2004Taka Taka

PROPERTY AND ASSETS

Cash in hand 2,163,889 2,880,604Balances with Bangladesh Bank-in local currency 1,229,329 1,098,298Balances with other Banks and Financial Institutions 4 976,724,775 793,647,103Investments-at cost 5 9,987,216,945 7,225,785,942Loans and advances-without collateral 6 28,896,759,122 20,846,367,700Fixed Assets including premises, furniture and fixturesnet off accumulated depreciation (Annexure-A) 7 955,305,291 906,487,507Other Assets 8 3,804,663,322 3,876,880,355

44,624,062,673 33,653,147,509CAPITAL AND LIABILITIES

Borrowings from banks and other institutions 9 1,917,392,329 2,895,818,585Deposits and other funds 10 34,611,089,384 22,477,474,158Members Deposit 20,277,412,272 13,905,186,423Non-Members Deposit 11,493,596,898 6,928,465,020Other Funds 2,840,080,214 1,643,822,715Other Liabilities 11 3,381,398,082 3,565,671,888Shareholders' Fund:Share Capital 12 318,000,000 318,000,000Capital and other reserves 13 4,396,182,878 4,396,182,878

4,714,182,878 4,714,182,878

44,624,062,673 33,653,147,509Contingent Liabilities

Guarantee 14 16,642,453 20,641,029

These Financial Statements should be read in conjunction with the annexed notes.

(M. Shahjahan) (Dr. Muhammad Yunus)General Manager Director Director Managing Director

Hoda Vasi Chowdhury & Co. S. F.Ahmed & Co.Chartered Accountants Chartered Accountants

Dhaka, 21 June 2006

PROFIT AND LOSS ACCOUNT48

Profit and Loss AccountFor the year ended 31 December 2005


Note 2005 2004Taka Taka

Interest income 15 4,746,095,835 3,489,865,707Less: Interest/Profit paid on deposits & borrowings etc. 16 (2,285,683,525) (1,583,123,375)Net Interest Income 2,460,412,310 1,906,742,332Income from Investments in Fixed Deposits 851,952,678 655,432,120Other income 17 1,796,728,252 550,423,619Total Operating Income 5,109,093,240 3,112,598,071

Less: operating expensesSalaries and other related expenses 18 1,668,479,375 1,246,463,140Rent, taxes, insurance, utilities etc. 19 48,714,353 41,693,248Legal and professional expenses 20 45,372,155 3,419,590Auditors’ fees 21 537,130 486,970Stationery, printing, advertisement etc. 22 72,754,916 51,920,388Managing Director's salary & allowances 23 408,420 317,820Directors’ remuneration 168,000 162,000Repairs & maintenance of fixed assets 24 22,459,673 20,745,885Depreciation of fixed assets 25 39,557,019 34,763,058Other expenses 26 480,837,241 271,920,540Total Operating Expenses 2,379,288,282 1,671,892,639Profit before provision 2,729,804,958 1,440,705,432Provision for loans and advances 11.2 & 27Specific Provision 1,476,494,272 838,217,364General Provision 252,868,700 180,360,993

1,729,362,972 1,018,578,357Net Profit 1,000,441,986 422,127,075

Appropriations:Net profit transferred to rehabilitation fund 1,000,441,986 422,127,075



Hoda Vasi Chowdhury & Co. S. F.Ahmed & Co.Chartered Accountants Chartered Accountants

Dhaka, 21 June 2006


Cash Flow StatementFor the year ended 31 December 2005


Note 2005 2004 Taka Taka

A) CASH FLOW FROM OPERATING ACTIVITIES Interest received 5,598,048,513 4,145,297,827 Interest paid (2,285,683,525) (1,583,123,375)Cash paid to employees (1,669,055,795) (1,246,942,960)Other Expenses (670,675,468) (390,186,621)Other Income 1,796,728,252 550,423,619

Cash generated from operating activities 2,769,361,977 1,475,468,490

Loans and advances (8,050,391,422) (4,022,658,613)Other Assets 28 72,217,033 (260,527,768)Deposits and other funds 11,133,173,240 7,349,159,138 Other Liabilities 29 (1,913,636,778) (1,118,625,210)

1,241,362,073 1,947,347,547

Net cash received from operating activities 4,010,724,050 3,422,816,037

B) CASH FLOW FROM INVESTING ACTIVITIESInvestments (2,761,431,003) (1,890,461,154)Additions to Tangible Fixed Assets (68,181,906) (39,396,335)Sales proceeds of Tangible Fixed Assets (20,192,897) 9,069,216

Net cash outflow from investing activities (2,849,805,806) (1,920,788,273)

C) CASH FLOW FROM FINANCING ACTIVITIES Share capital - 26,971,100 Borrowings from Banks and Foreign Institutions (978,426,256) (1,316,976,597)Capital and other reserves - -

Net Cash/(out flow) from financing activities (978,426,256) (1,290,005,497)D) Net increase/(decrease)in cash and cash equivalents (A+B+C) 182,491,988 212,022,267 E) Opening cash and cash equivalents 797,626,005 585,603,738

F) Cash and bank balances at end of the period 30 980,117,993 797,626,005



STATEMENT OF CHANGES IN EQUITY50

Statement of changes in equityfor the year ended 31 December 2005


Particulars Share Capital Capital reserve Other reserve TotalTaka Taka Taka Taka

Balance at 1 January 2005 318,000,000 4,280,409,577 115,773,301 4,714,182,878Increase during the year 2005 - - - -Balance as at 31 December 2005 318,000,000 4,280,409,577 115,773,301 4,714,182,878




Statement of Liquidity (analysis of maturity of assets & liabilities)

As at 31 December 2005


Particulars Up to 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total

Assets

Cash in hand 2,163,889 - - - - 2,163,889Balances with Bangladesh Bank 1,229,329 - - - - 1,229,329Balances with other Banks and Financial Institutions 107,439,725 869,285,050 - - - 976,724,775Investment at cost 672,045,343 1,846,515,024 7,258,156,578 190,000,000 20,500,000 9,987,216,945Loans and advances 1,803,157,769 3,603,425,863 16,274,654,738 6,932,332,513 283,188,239 28,896,759,122Fixed Assets including premises, furniture and fixtures - - - 109,191,395 846,113,896 955,305,291net off accumulated depreciationOther assets 466,832,190 67,723,007 1,009,377,179 1,685,085,385 575,645,561 3,804,663,322Non-Banking Assets

Total Assets (A) 3,052,868,245 6,386,948,944 24,542,188,495 8,916,609,293 1,725,447,696 44,624,062,673

Liabilities

Borrowings from banks and other institutions - 31,028,966 31,028,966 248,231,730 1,607,102,667 1,917,392,329Deposits and other funds 1,443,282,427 5,153,591,209 14,536,657,541 9,241,160,866 4,236,397,341 34,611,089,384Other liabilities 435,524,073 - 910,610,503 2,035,263,506 - 3,381,398,082

Total Liabilities (B) 1,878,806,500 5,184,620,175 15,478,297,010 11,524,656,102 5,843,500,008 39,909,879,795

Net Liquidity Gap (A-B) 1,174,061,745 1,202,328,769 9,063,891,485 (2,608,046,809)(4,118,052,312) 4,714,182,878



COMPARATIVE VALUE ADDED STATEMENT52

Comparative Value Added StatementFor the year ended 31 December 2005


Description 2005 2004Taka Taka

Income from Banking ServicesInterest income 4,746,095,835 3,489,865,707Interest income from investment 851,952,678 655,432,120Other operating income 1,796,728,252 550,423,619

7,394,776,765 4,695,721,446Less: Cost of services & Supplies

Interest paid on deposits & borrowings 2,285,683,525 1,583,123,375Rent, taxes, insurance & electricity etc 56,719,993 41,693,248Legal and professional expenses 45,372,155 3,419,590Auditors' fees 537,130 486,970Stationery, printing, advertisement etc. 72,754,916 51,920,388Repairs & maintenance of fixed assets 22,459,673 20,745,885Directors’ remuneration 168,000 162,000Other expenses 472,831,601 271,920,540

2,956,526,993 1,973,471,996

Value added by the Banking Services 4,438,249,772 2,722,249,450

Less: loan loss and provisionsProvision for bad and doubtful debts (1,729,362,972) (1,018,578,357)

Value Added 2,708,886,800 1,703,671,093

Distribution of value additionEmployees-as salaries and other related expenses 1,668,887,795 1,246,780,960Contribution to Rehabilitation Fund 1,000,441,986 422,127,075Depreciation 39,557,019 34,763,058

2,708,886,800 1,703,671,093




Notes to the financial statementsfor the year ended 31 December 2005


1.00 BACKGROUND

1.01 Legal form of the enterprise

Grameen Bank was established as a body corporate under the Grameen Bank Ordinance 1983. Initially the authorized capital of thebank was Tk 100 million and paid-up capital was Tk. 30 million.At present the bank’s authorized capital is Tk. 500 million and paidup capital is Tk. 318 million. Members hold 94.34 percent of Grameen Bank shares.The remaining 5.66 percent is held by theGovernment of Bangladesh.The board of the bank consists of 13 members: the Managing Director, three members including thechairman nominated by the government and nine members elected from the borrower shareholders.

1.02 Nature of business

The principal activity of the bank is to provide credit without collateral to landless persons for all types of economic activities.Thebank also accepts deposits but excluding business in foreign exchange transactions, carries out survey and research, issue publicationsand maintaining statistics with a view to improving the economic condition of the landless persons.The bank undertakes income-generating projects for landless persons, invests its funds in Government Securities and provides professional counseling to landlesspersons regarding investments in small business and cottage industries. Grameen Bank now operates 21 Zonal Offices, 166 AreaOffices and 1747 branch offices including 12 sub-branch Offices.The bank offers four types of loans such as basic loans, housingloans, higher education loans and struggling members’ loans. Loans and advances and deposits as at 31 December 2005 were Tk.28,896,759,122 and 31,771,009,170 respectively.As on 31 December 2005, out of 1747 branches 1432 registered profits.Theremaining 315 branches were not profitable. However, it must be taken into consideration that during the year the bank opened 377new branches.

2.00 RISK MANAGEMENT

In the ordinary course of business, the bank is exposed to a variety of risks the most important of which are credit risk, operationalrisk, and solvency risk.These risks are being identified, measured and monitored through various control mechanisms across the bankin order to assess the quality of products offered.

2.01 Internal audit

Internal audit is a part of the internal control system, which is introduced in large business entities to detect any error or fraud at anearly stage.At present, the Internal Audit Division of Grameen Bank is characterized by two-tier structure namely central audit andzonal audit. Central audit conducts the audit of different divisions at the head office, zonal offices and their area offices. Moreover,Central audit office supervises, advises, directs and provides necessary guidance to zonal audit offices.The zonal audit office audits allbranches within the zone. Central and zonal audit offices execute complete audits and brief audits to monitor operations and reviewcompliance of statutory requirements.The Internal Audit Division works under the direct supervision of the Managing Director;however, it is completely independent in its work.

3.00 SIGNIFICANT ACCOUNTING POLICIES

3.01 Basis of preparation and presentation of financial statements

The accompanying financial statements comprising the Balance Sheet, Profit and Loss Account, Cash Flow Statement, Statement ofChanges in Equity, Comparative Value Added Statement and Notes thereto have been prepared in accordance with InternationalAccounting Standards (IASs) on a going concern basis under the historical cost convention.

NOTES TO THE FINANCIAL STATEMENTS54



3.02 Basis of consolidation

A separate set of records for consolidation of the statement of affairs and income & expenditure account of the branches aremaintained at the head office of the bank based on which these financial statements have been prepared.

3.03 Tax exemption

Grameen bank is presently enjoying tax exemption of income tax, super tax and business profit tax till 31 December 2005 subject tothe conditions that the Bank will transfer its entire profit to a Rehabilitation Fund to be established by Grameen bank for thepurpose.This is contained in the Ministry of Finance notification vide SRO no. 36/Law/2003 dated 1 February 2003.

3.04 Rehabilitation fund

Rehabilitation fund consists of transfer from general reserve and tax provision made for 1997 and 1998 and transfer of entire revenueprofit from 1999 to 2005 in order to comply with the requirement for tax exemption allowed by the Ministry of Finance.TheRehabilitation Fund is to be utilized for the purpose of rehabilitation of members affected due to natural disasters.

3.05 Foreign fund

Foreign funds were received from the foreign donor agencies (IFAD 41 BA, IFAD 161 BA, IFAD 239 BA, NORAD, SIDA, DutchGrant and JBIC) under the subsidiary loan agreement with the Government of the People’s Republic of Bangladesh.The terms forrepayments, interest rates, grace periods etc. have been set out in those agreements.The funds were disbursed to Grameen Bank inequivalent Taka currencies and were accounted for at cost as and when those funds were received. Consequently, no accountingtreatment is required in respect of exchange differences on foreign currencies and Grameen Bank need not to account for exchangerate gain/loss on such differences as well.

3.06 Accruals & deferrals

Deferrals and accruals have been made as per the guidance of the IAS 1 Presentation of Financial Statements. In order to meet theirobjectives, financial statements except for cash flow statement and related information are prepared on accrual basis of accounting.Under the basis, the effects of transactions and other events are recognized when they occur (and not when cash or its equivalent isreceived or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to whichthey relate.

3.07 Reconciliation of inter-branch transactions

Books of account with regard to inter-branch transactions are reconciled. Unreconciled entries are caused by mismatching oforiginal figures with corresponding ones, lack of original advice and incomplete advice from branches.

3.08 Cash Flow Statement

IAS 1 presentation of Financial Statement requires that a cash flow statement is to be prepared as it provides information about cashflows of the enterprise that is useful in providing users of financial statements with a basis to asses the ability of the enterprise togenerate cash and cash equivalents and the needs of the enterprise to utilize those cash flows.

Cash flow statement has been prepared under the direct method for the period, classified by operating, investing and financingactivities as prescribed in paragraph 10 and 18(a) of IAS 7.




3.09 Provision for loan impairment

As per the guideline of paragraph 43 of IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions,specific provisions are made against non-performing and problem loans on the basis of best estimate up to such amount as it isexpected to cover for the loss from non-performing and impaired loans and advances. No specific credit risk provision for loanimpairment is established to provide for management's estimate of loan losses as soon as the recovery of an exposure is identified asdoubtful.

As per the requirement of paragraph 49 of IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutionswhen a loan is deemed uncorrectable, it is written off against the related provision for impairments.The bank writes off its non-performing and problem loans after one year on overdue loan. Subsequent recoveries of such loans are credited to the incomestatement.

Provisions for loans & advances are made on the basis of year-end review by the management and instructions contained in boardresolution.The calculation rate is given below:

a) Basic loansBasic loan provision has been made @ 100% on overdue loan Basic loan provision has been made @ 1% on regular loan

b) Flexible loansProvision has been made on flexible loans at the following rates:Principal outstanding from the signing of first contract period below 2 years 50%Principal outstanding for 2 years and beyond from the signing of first contract period 100%Overdue flexible loan 100%

c) Housing loans (Members)Provision has been made on Housing loans (Members) at the following rates:Loans outstanding from the loan disbursement below 10 years 5%Loans outstanding for 10 years and beyond from the loan disbursement 100%

d) Education loanNo provision has been made on education loan

3.10 Provision for interest receivable

a) Interest receivable on basic loansInterest receivable on basic loan provision has been made @ 100% on overdue interest of basic loan

b) Interest receivable on flexible loansProvision has been made on interest receivable on flexible loans at the following rates:Interest receivable outstanding from the signing of first contract period below 2 years 50%Interest receivable outstanding for 2 years and beyond from the signing of first contract period 100%Overdue flexible loan 100%

c) Interest receivable on Housing loans (Members)Provision has been made on interest receivable on Housing loans (Members) at the following rates:Interest receivable outstanding from the loan disbursement below 10 years 10%Interest receivable outstanding for 10 years and beyond from the loan disbursement 100%




3.11 Fixed assets

The major categories of property and equipment held by the bank are property land, buildings & other structures, equipment,furniture and fixtures, vehicles, capital work in progress etc.

As guided in paragraph 28 of IAS 16 Property Plant and Equipment: all property and equipment except land are stated at historicalcost less accumulated depreciation. No depreciation has been charged on land and the carrying amounts are the same as those wereinitially recognized.The opening and closing carrying amounts of all property and equipment are presented including the amount ofadditions, disposals and depreciation charged during the year as required by paragraph 60 (e) of IAS 16.

3.12 Depreciation

As required by IAS 16, property, plant & equipment depreciation has been charged on property and equipment at the following ratesusing straight-line method.

Property & Equipment Depreciation Rate

Building and other structures 1.7%Office House (Semi-Pucca and Tin shed) 7.5%Development of leasehold property 10%Vehicles 20%Office equipment 15%Electrical equipment 10%Furniture & fixtures 10%Library books 10%

Depreciation at the applicable rates is charged proportionately on additions made during the year from the date of their acquisitionon straight-line method. Disposal on assets during the year, depreciation charged is required on actual date.

3.13 Investments

Value of investment is presented below:

Nature of Investments Applicable Accounting

FDR Face ValueShares in CDBL At costGrameen Mutual Fund At cost

3.14 Revenue recognition

Revenue is recognized on an accrual basis which complies with the conditions of revenue recognition as provided in IAS 18Revenue.a) Income on investments is accounted for consistently on an accrual basis.b) Interest on loans and advances (including bad and doubtful loans and advances) is accounted for on an accrual basis.c) Service charge on guarantees issued by the bank in favour of other institutions is accounted for on cash receipt basis.

3.15 Interest paid and other expenses

In terms of the provision of the IAS 1 Presentation of Financial Statements, the interest paid and other expenses are recognized onaccrual basis.




3.16 Retirement benefits to the employees

a) Grameen Bank Superannuation fundThe bank operates a superannuation fund scheme, provision in respect of which is made annually @ 60% of annual basic salary. It isoperated by a separate Board of Trustees consisting of ten members.

b) Non-contributory provident fundProvident fund benefits are given to the employees of the bank in accordance with non-contributory provident fund rules.The fundis operated by a Board of Trustees.All confirmed employees of the bank are contributing 10% of their basic salary as subscription ofthe fund. Interest earned from the investments is credited to the members account on accrual basis.

3.17 Comparative Information

As required by paragraphs 38 and 40 of IAS 1 Presentation of Financial Statements comparative information in respect of theprevious year have been presented in all numerical information in the financial statements and the narrative and descriptiveinformation where it is relevant for understanding of the current year's financial statements.

3.18 General

Previous year’s figures have been rearranged, wherever considered necessary, for the purpose of comparison.Figures appearing in these accounts have been rounded off to the nearest Taka.




2005 2004Taka Taka

4.00 BALANCES WITH OTHER BANKS AND FINANCIAL INSTITUTIONS

On short term deposit accounts (in local currency) 918,599,330 767,318,053On current deposit accounts (in local currency) 58,125,445 26,329,050

976,724,775 793,647,103

5.00 INVESTMENTS-AT COST

Fixed deposits with other banks (Note 5.01) 9,966,716,945 7,209,785,942Grameen Mutual Fund-One (Note 5.02) 16,500,000 12,000,000Share (Note 5.03) 4,000,000 4,000,000

9,987,216,945 7,225,785,942

5.01 Fixed deposits with other banks

Rupali Bank Limited - 20,000,000Southeast Bank Limited 1,520,249,725 1,513,165,874Arab Bangladesh Bank Limited - 209,995,000National Bank Limited - 165,456,983Prime Bank Limited 1,221,128,225 583,405,278Dutch Bangla Bank Limited 1,216,336,098 618,898,276State Bank of India 438,641,789 509,786,234NCC Bank Limited 469,849,739 386,636,448Mercantile Bank Limited 264,389,715 380,000,000One Bank Limited 489,789,504 399,735,000EXIM Bank Limited 930,790,680 260,000,000First Security Bank Limited 341,606,349 130,000,000Mutual Trust Bank Limited 685,648,231 562,706,849Standard Bank Limited 463,580,225 220,000,000Premier Bank Limited 414,256,540 400,000,000Bank Asia Limited 277,091,953 350,000,000Trust Bank Limited 130,795,000 300,000,000Commercial Bank Limited - 100,000,000National Bank of Pakistan - 100,000,000Dhaka Bank Limited 897,063,172 -Jamuna Bank Limited 205,500,000

9,966,716,945 7,209,785,942

5.02 Grameen Bank has invested Tk. 1.65 crore in Grameen Mutual Fund (GMF)-One as sole sponsor.The fund was listed in Dhaka andChittagong Stock Exchange as on 04 September 2005.

5.03 Four shares of Central Depository Bangladesh Limited (CDBL) which were subscribed @ Tk. 1,000,000 each.




2005 20045.04 Maturity grouping of investments Taka Taka

On demand - -Up to 1 month 672,045,343 190,000,000Over 1 month but not more than 3 months 1,846,515,024 341,162,993Over 3 months but not more than 1 year 7,258,156,578 5,135,757,475Over 1 year but not more than 5 years 190,000,000 1,542,865,474Over 5 years 20,500,000 16,000,000

9,987,216,945 7,225,785,942

6.00 LOANS AND ADVANCES-UNSECURED (Inside Bangladesh)

Loans:Basic loans 25,665,086,065 17,145,684,030Flexible loans 1,465,371,175 1,606,284,907Housing loans (Members) 619,792,010 1,121,473,512Education loans 206,471,714 100,707,115Social Venture Capital Fund (SVCF) loans 110,509,380 128,283,533Center house building loan 16,830,541 -Loan freeze 209,832 -Other loans 24,298,438 24,566,035

28,108,569,155 20,126,999,132Advances:Housing loans (Staff) 113,110,952 116,482,639Household commodities loans 188,840,436 178,397,115Salary advances 52,556 95,721Bicycle advances 9,533,183 5,722,007Motor cycle advances 6,416,192 4,278,579Calculator advances 927,751 684,578P. F. advances 463,103,032 408,372,470Medical loans 4,712,652 4,111,346Staff welfare loans 1,493,213 1,224,113

788,189,967 719,368,568

28,896,759,122 20,846,367,7006.01 Maturity grouping of loans and advances

Repayable on demand - -Up to 1 month 1,803,157,769 1,299,813,906Over 1 month but not more than 3 months 3,603,425,863 2,599,719,395Over 3 months but not more than 1 year 16,274,654,738 11,740,735,075Over 1 year but not more than 5 years 6,932,332,513 5,001,277,617Over 5 years 283,188,239 204,821,707

28,896,759,122 20,846,367,700




2005 20047.00 FIXED ASSETS including premises, furniture & fixtures Taka Taka

(net off accumulated depreciation):Land 39,694,558 38,498,951Building and other structures 756,109,675 764,421,137Development of leasehold property (Fully depreciated) - -Vehicles 29,930,269 15,931,438Office equipment 52,764,773 53,321,083Electrical equipment 14,624,057 15,453,785Furniture and fixtures 39,627,747 15,503,567Library books - 37Capital work in progress 22,554,212 3,357,509

Annexure-A 955,305,291 906,487,507

8.00 OTHER ASSETS

Interest receivable (Note 8.01) 3,182,281,303 3,302,503,765Advance income tax for employees 2,400,000 1,500,000Printing stationery on hand 17,283,901 14,173,468Office stationery on hand 264,179 143,596Zone/Area control account 48,614 (3,607)Advance income tax (Note 8.02) 201,476,872 201,423,614Security deposits 583,104 457,502Prepaid expenses 2,520,261 2,610,303Advance against TA/DA 157,670 308,777Advance against purchases and others 49,435,238 11,496,236Advance against house rent 2,353,454 1,422,051Stock & stores (General) 1,799,518 752,405Suspense account 6,245,464 5,128,757Advances to contractors 2,005,596 3,681,865Inter-branch adjustments (Note 8.03) 137,833,388 173,178,448G.B. superannuation fund-current account (Note 8.04) 6,998,428 130,441,027Workshop 268,251 237,615Rent receivables 27,423,847 24,493,690Service charge receivables 163,284,234 2,930,843

3,804,663,322 3,876,880,355




2005 20048.01 Interest receivable Taka Taka

From investmentsFixed deposits with other banks 674,537,826 431,095,017

From LendingBasic loans 1,081,866,526 1,004,223,086Flexible loans 966,636,434 1,108,281,478Housing loans (Members) 323,994,344 633,446,287Education loans 1,611,791 1,064,699Other loans 19,521,550 19,202,093Interest freeze 11,864

From StaffStaff loan and advances 39,852,524 35,345,395P.F. advances 39,626,572 33,950,766Medical loans 783,178 752,361Household commodities loans 33,838,694 35,142,583

3,182,281,303 3,302,503,7658.02 Advance income tax

Advance income tax represents tax deducted at source by Scheduled Banks and others from the income of Grameen Bank. GrameenBank is a non-taxable entity as per Grameen Bank Ordinance 1983 but due to late receipts of the exemption orders fromGovernment, Grameen Bank had faced such deduction.The tax deducted as such, at source remains to be refundable.

8.03 Inter-branch adjustments

Inter-branch adjustment account balance Tk.137, 833,388 represents outstanding in branch and Head Office transactions (Net)originated but not responded at the balance sheet date. However, unadjusted items are being subsequently adjusted.

8.04 Grameen Bank Superannuation Fund

Opening balance on 1 January 130,441,027 138,168,732Add: Paid during the year 296,303,340 267,357,177

Interest payment for the year 14,440,070 18,889,818Adjustment 524,653 230,086

441,709,090 424,645,813

Less: Subscription made during the year (434,275,702) (291,931,478)Subscription for staff on deputation - (1,058,208)Adjustment (434,960) (1,215,100)

(434,710,662) (294,204,786)

Closing balance at 31 December 6,998,428 130,441,027




2005 20048.05 Maturity grouping of other assets Taka Taka

On demand - -Up to 1 month 466,832,190 475,826,102Over 1 month but not more than 3 months 67,723,007 68,853,530Over 3 months but not more than 1 year 1,009,377,179 1,028,880,591Over 1 year but not more than 5 years 1,685,085,385 1,716,918,035Over 5 years 575,645,561 586,402,097

3,804,663,322 3,876,880,355

9.00 BORROWINGS FROM BANKS AND FOREIGN INSTITUTIONS

3% IFAD 41 BA (Note 9.01) - 13,260,7752% IFAD 239 BA (Note 9.02) 273,009,955 281,282,984NORAD (Note 9.03) 267,918,176 267,918,176SIDA (Note 9.04) 238,848,625 238,848,625Ford Foundation 18,075,066 18,075,066Dutch Grant Loan (Note 9.05) 44,283,298 44,283,298Other banks - 220,000,000Bonds and debentures (Note 9.06) - 710,000,000Japan Bank of International Co-operation (OECF) (Note 9.07) 1,075,257,209 1,102,149,661

1,917,392,329 2,895,818,585

9.01 3% IFAD 41 BA

The loan received from International Fund for Agricultural Development (IFAD) in 1981 is payable on 15 March and 15 Septembereach year in 17 semi annual installments commencing from 15 September 1997 and ending on 15 September 2005. Installments andinterest falling due in 2005 have been duly paid.

9.02 2% IFAD 239 BA

A subsidiary loan agreement for an amount in taka equivalent of SDR 6,200,000 was made with the Government of the People'sRepublic of Bangladesh on 8 January 1990.The loan received in 1990 and 1992 is repayable on 15 March and 15 September eachyear in 80 equal semi annual instalments commencing on 15 March 1999 and ending on 15 September 2039. Instalment and interestfalling due in 2005 have been duly paid.

9.03 Norwegian Agency for International Development (NORAD)

A subsidiary loan agreement for an amount in taka equivalent of Netherlands' Kroner 5,500,000 was made with the Government ofthe People's Republic of Bangladesh on 4 August 1986.The loan received in 1986 is payable with interest rate 2% per annum inMarch and September each year in 40 equal semi annual instalments during a period of 30 years including a grace period of 10 yearscommencing in March 1997. Instalment and interest falling due in 2005 have been duly paid.




9.04 Swedish International Development Authority (SIDA)

A subsidiary loan agreement for an amount in taka equivalent of SEK 60,000,000 was made with the Government of the People'sRepublic of Bangladesh on 30 November 1986.The loan received in 1986 is repayable with interest rate 2% per anuam in Marchand September each year in 40 equal semi annual instalments during a period of 30 years including a grace period of 10 yearscommencing in March 1997. Instalments and interest falling due in 2005 have been duly paid.

9.05 Dutch Grant Loan

The loan of DFL 2,000,000 equivalent of Tk. 44,283,298 received in 1986 under a subsidiary loan agreement with Bangladesh Bankis repayable on 15 December each year in 15 equal annual instalments within 16 years from the date of receiving the loan includinga grace period of one year.As per section 11 of the loan agreement the amount of instalments of the principal loans amount repaidby Grameen Bank is allowed to be used in perpetuity for financing its housing loan scheme on the same terms and condition asstated above. Instalments and interest falling due in 2005 have been paid.

9.06 Bond and debenture

As at 31 December 1994 and in the year 1999 the Bank issued bonds and debentures of Taka 6,500,000,000 and Taka 2,000,000,000respectively with rate of interest 4% to 10% which are guaranteed by the Government.The rest of the Bonds and debentures to theextent of Tk. 723,388,219 with interest have already been fully paid in 2005.

9.07 JBIC (OECF)

A subsidiary loan agreement for an amount of taka equivalent of Yen 2,986,000,000 was executed with the Government of thePeople’s Republic of Bangladesh on 7 March 1996.The loan is repayable on 15 March and 15 September each year with the interestrate of 2% per annum in semi annual instalments in 30 years including a grace period of 10 years in accordance with amortizationschedule, first instalments being due on 15 September 2005.Tk. 393,133,462,Tk. 419,216,041 and Tk. 289,800,159 were received in1996, 1997 and 1998 respectively. Instalments and interest falling due in 2005 have been duly paid.

9.08 Maturity grouping of borrowing from banks and financial institutions2005 2004Taka Taka

Repayable on demand - -Up to 1 month - 220,000,000Over 1 month but not more than 3 months 31,028,966 10,766,904Over 3 months but not more than 1 year 31,028,966 748,320,641Over 1 year but not more than 5 years 248,231,730 316,902,560Over 5 years 1,607,102,667 1,599,828,480

1,917,392,329 2,895,818,585




2005 200410.00 DEPOSITS AND OTHER FUNDS Taka Taka

Members deposits:Current deposits 25,540,143 20,342,087Fixed deposit (Note 10.01) 67,554,239 51,539,268Savings deposit 3,631,245,384 2,792,671,109Special Savings 30,733 1,293,265Children welfare fund 73,838 1,390,750Grameen pension scheme-10 years (Note 10.02) 8,937,444,702 5,707,924,933Special Savings account 2,739,327,152 2,441,994,949Double in 7 years deposit (Note 10.03) 1,043,117,199 755,510,873Double in 7 years deposit (Note 10.03) 52,954,776 39,486,539Polly phone deposit 1,088,476,902 533,950,010Centre welfare fund 486,704,992 463,183,732Disaster fund - 709,988Central emergency fund 120,269,587 119,081,114Loan insurance savings fund 1,981,120,345 876,180,599Grameen pension scheme-5 years 54,042,780 96,092,107Share money deposit 49,509,500 3,835,100

20,277,412,272 13,905,186,423Non-Members deposits:Current deposit 19,109,223 14,768,408Short term deposit 80,778 105,444Fixed deposit 631,292,938 440,508,719Saving deposit 5,198,977,938 3,434,102,742Grameen pension scheme-10 years (for staff) 236,290,967 169,822,121Double in 7 years deposit 4,115,495,259 2,149,332,661Monthly profit scheme 1,257,407,800 669,903,169Technology project deposit 3,114,779 23,204,171Forestation fund 3,509,884 2,422,673Grameen pension scheme-5 years (for staff) 1,034,989 2,077,443Employee loan insurance savings fund 27,282,343 22,217,469

11,493,596,898 6,928,465,020Other Funds:Employees welfare fund 66,220,410 60,395,926Struggling member welfare fund 48,643,194 57,880,422Award fund 29,847,287 28,237,404Maintenance reserve 44,701,205 43,630,300Cafeteria 1,691,983 1,563,073Leasing insurance fund 5,612,440 5,612,440Contingency fund (Note 10.04) 143,919,475 120,152,011Byabosa Bikash risk coverage fund 163,876,957 52,515,597Loan repaid by Byabosa Bikash 253,474 137,040Employees loan insurance fund 2,935,810 1,837,793Animal insurance fund 20,513,138 16,900,870Grameen Bank Disaster Relief Fund 2,205,884 2,203,764Members welfare fund 5,941,220 5,940,236Polly phone risk coverage fund 46,304,764 48,154,207Revolving fund-special programme 7,994,441 7,896,693Revolving fund-SIDE 17,632,889 10,110,144Revolving fund (Note 10.05) 96,243,212 113,875,750Rehabilitation fund (Note 10.06) 2,135,542,431 1,066,779,045

2,840,080,214 1,643,822,715Total 34,611,089,384 22,477,474,158




10.01 Fixed Deposit

Grameen Bank started "fixed deposit scheme" vide its circular no. 02/2000 dated 16 May 2000 which is for minimum of 1 yearand maximum of 3 years. Interest rates of fixed deposit are 8.75%,9.25% and 9.50% for 1 year, 2 years and 3 years respectively.Depositors can get interest after matured date of fixed deposit.

10.02 Grameen pension scheme

Grameen Bank Started " Grameen pension scheme" of 5 years and 10 years vide its circular no. 2-06/2000 dated 30 August 2000for the financial assurance of their members and employees. Under this scheme Grameen Bank motivates its members andemployees to small savings by opening "GPS Account" in the respective branches which rate of interest is 10% for 5 years and 12%for 10 years. Both are payable on yearly basis.

10.03 Double in 7 years deposit

Grameen Bank started "Double in 7 years deposit" scheme vide its circular no 2-07/2000 dated 30 August 2000 for makingfinancial strengths of rural civil society by increasing saving mentality.Any person can open his/her account by depositingminimum of Tk. 1,000.00(One thousand) or its general multiplying amount for 7 years.After 7 years account holder for carryinghis/her account fulfilling the all criteria will get double amount (consolidated principal and interest) of his/her investment.

10.04 Contingency fund

Grameen Bank has created " Contingency Fund" to cover the loss (if any) arising from forgery, theft, lost, assault, robbery etc.

2005 200410.05 Revolving fund Taka Taka

Revolving fund from G.T.Z 14,621,090 14,621,090Revolving fund from K.F.W 6,729,042 6,729,042Revolving fund for SVCF 70,067,461 87,700,000Revolving fund for housing rehabilitation 4,825,619 4,825,619

96,243,212 113,875,751

10.06 Rehabilitation fund

Opening Balance 1,066,779,045 755,438,841Payment during the year (2,622,138) (167,277,927)Reimbursement during the year 70,943,538 56,491,056Profit for the year 1,000,441,986 422,127,075

2,135,542,431 1,066,779,045

10.07 Maturity grouping of deposit and other funds

Repayable on demand - -Up to 1 month 1,443,282,427 938,091,607Over 1 month but not more than 3 months 5,153,591,209 3,347,722,535Over 3 months but not more than 1 year 14,536,657,541 9,438,069,183Over 1 year but not more than 5 years 9,241,160,866 6,002,531,957Over 5 years 4,236,397,341 2,751,058,876

34,611,089,384 22,477,474,158




2005 2004Taka Taka

11.00 OTHER LIABILITIES

Interest payable on borrowing 10,998,360 13,448,011Interest sundry 1,881,083 -Bills or other payable 574,590,476 390,169,105P.F. trustee board-current account 9,903,552 125,163,566Accounts for other institutions (Note 11.01) 4,859,763 4,471,547SIDE programme-sundry deposit 191,160 191,160Retention money 1,031,486 1,692,754Earnest money 1,921,920 2,588,350Claimable deposits 12,572,243 10,269,157Unpaid salary 76,010 65,150Tax deducted at source 142,104 44,823Sundry receipts 90,969 58,003Farewell grant provision for fixed salary staff 14,231,644 2,300,000Miscellaneous 41,530,987 39,348,771Advance house rent 2,152,944 -Provision reserves (Note 11.02) 2,705,223,381 2,975,861,491

3,381,398,082 3,565,671,888

11.01 Accounts for other institutions

Grameen Telecom 1,000 200,017Grameen Fisheries & Livestock Foundation 3,409,315 3,156,773Grameen Communications 104,404 97,881Grameen Shikkha 554,703 285,648Grameen Kalyan 790,341 731,228

4,859,763 4,471,54711.02 Provision reserves

Provision for loans and advances (Note 11.03.1) 1,810,166,265 1,858,852,661Provision for interest receivable (Note 11.03.2) 895,057,116 1,117,008,830

2,705,223,381 2,975,861,491




2005 200411.03.1 Provision for loans and advances Taka Taka

Balance as at 1 January 1,858,852,661 1,965,961,930Provision made during the year 1,014,174,929 642,758,581Debt written off against provision made earlier (Note 11.03.1.1) (1,062,861,325) (749,867,850)

1,810,166,265 1,858,852,661a) Specific provision against loans & advances

Balance as at 1 January 1,688,344,262 1,965,961,930Provision made during the year 781,453,172 472,250,182Debt written off against provision made earlier (Note 11.03.1.1) (1,062,861,325) (749,867,850)

1,406,936,109 1,688,344,262b) General provision against unclassified loans & advances

Balance as at 1 January 170,508,399 -Provision made during the year 232,721,757 170,508,399

403,230,156 170,508,399

Total 1,810,166,265 1,858,852,661

11.03.1.1 Debts written off against provision made earlier

Basic loans 71,379,576 645,809Flexible loans 624,089,873 486,820,162Housing loans 367,391,876 262,401,879

1,062,861,325 749,867,85011.03.2 Provision for interest receivable

Balance as at 1 January 1,117,008,830 1,580,833,233Provision made during the year 715,188,043 375,819,776Interest receivable written off against provision made earlier (Note 11.03.2.2) (937,139,757) (839,644,179)

895,057,116 1,117,008,830

a) Specific provision against loans & advancesBalance as at 1 January 1,107,156,236 1,580,833,233Provision made during the year 695,041,100 365,967,182Debt written off against provision made earlier (Note 11.03.2.2) (937,139,757) (839,644,179)

865,057,579 1,107,156,236

b) General provision against unclassified loans & advancesBalance as at 1 January 9,852,594 -Provision made during the year 20,146,943 9,852,594

29,999,537 9,852,594

Total (a)+(b) 895,057,116 1,117,008,830




2005 200411.03.2.2 Interest receivable written off against provision made earlier Taka Taka

Basic loans 42,353,993 282,594Flexible loans 577,681,364 620,979,483Housing loans 317,104,400 218,382,102

937,139,757 839,644,17911.04 Maturity grouping of other liabilities

Repayable on demand - -Up to 1 month 435,524,073 459,369,370Over 1 month but not more than 3 months - -Over 3 months but not more than 1 year 910,610,503 960,204,002Over 1 year but not more than 5 years 2,035,263,506 2,146,098,516Over 5 years - -

3,381,398,082 3,565,671,88812.00 SHARE CAPITAL

12.01 Authorized5,000,000 Ordinary Shares of Tk. 100 each 500,000,000 500,000,000

12.02 Paid up Capital

3,180,000 (2003: 2,910,289) ordinary shares of Tk. 100 each issued for cash 318,000,000 318,000,000

Shareholders For Year Ended December 2005 % No. of shares Nominal value of Share

Government of Bangladesh 3.78 120,000 12,000,000 12,000,000Sonali Bank 0.94 30,000 3,000,000 3,000,000Bangladesh Krishi Bank 0.94 30,000 3,000,000 3,000,000Borrowers:Men 4.28 136,163 13,616,300 13,616,300Women 90.06 2,863,837 286,383,700 286,383,700Total 100 3,180,000 318,000,000 318,000,000




2005 200412.03 Capital Adequacy Ratio Taka Taka

Tier-I (Core Capital)Paid up Capital 318,000,000 318,000,000Capital & other reserves 4,396,182,878 4,280,409,577Surplus Retained Earnings - -

4,714,182,878 4,598,409,577Tier-II (Supplementary capital)General Provision 433,229,693 181,855,926

Total Capital (A) 5,147,412,571 4,780,265,503

Total Assets 44,624,062,673 33,653,147,509Total Risk Weighted Assets (B) 38,394,920,970 28,956,114,200Required Capital based on Risk Weighted Assets (9% of RWA) (C) 3,455,542,887 2,606,050,278Core Capital (Tier-I) 4,714,182,878 4,598,409,577Supplementary Capital (Tier-II) 433,229,693 181,855,926Total 5,147,412,571 4,780,265,503Surplus/(Shortage) (A-C) 1,691,869,684 2,174,215,225

Capital to Risk Weighted Assets (A/B) 13.41% 16.51%

13.00 CAPITAL AND OTHER RESERVES

Capital reserves (Note 13.01) 4,280,409,577 4,280,409,577Other reserves (Note 13.02) 115,773,301 115,773,301

4,396,182,878 4,396,182,878

13.01 Capital reserves

Revolving fund (Note 13.01.1) 3,732,311,704 3,732,311,704Grants 527,997,873 527,997,873M.E.D. Revolving fund 20,100,000 20,100,000

4,280,409,577 4,280,409,577

Capital reserve includes outstanding balances of revolving funds and grant as at 31 December 1999 which are no longerrefundable.

13.01.1 Revolving fund

Revolving fund for G & C 1,544,811,573 1,544,811,573Revolving fund for house loan 2,065,346,276 2,065,346,276Revolving fund for staff house loan 122,153,855 122,153,855

3,732,311,704 3,732,311,704




2005 200413.02 Other reserves Taka Taka

Special reserve 992,043 992,043Training reserve fund 3,017,748 3,017,748Training revolving fund 10,387,868 10,387,868Publication fund 2,807,045 2,807,045Assets replacement reserve 49,697,943 49,697,943SIDE programme-sundry deposit 19,020,037 19,020,037SIDE fund revolving account 3,238,095 3,238,095Special programme-GTZ 26,612,522 26,612,522

115,773,301 115,773,301

14.00 CONTINGENT LIABILITIES

There are contingent liabilities for bank guarantees executed by Grameen Bank in favour of the following :

2005 2004Guarantee Loan outstanding Guarantee Loan outstanding

amount including interest amount including interestat 31-12-05 against at 31-12-04 against

which guarantees which guaranteesare given are given

Taka TakaGrameen Fisheries & Livestock Foundation Tk. 8,000,000 8,000,000 Tk. 10,000,000 10,000,000Grameen Shakti US$ 119,785 8,642,453 US$ 173,306.66 10,641,029

16,642,453 20,641,029

15.00 INTEREST INCOME

Loans and advances (Note 15.01.1) 4,726,756,601 3,481,499,311Deposits 19,339,234 8,366,396

4,746,095,835 3,489,865,707




2005 200415.01.1 Interest on loans and advances Taka Taka

Members loanBasic loans 4,231,282,248 3,002,407,734Flexible loans 327,329,024 309,717,484Housing loans 79,019,892 111,232,717Education loans 3,287,959 692,162Other loans 2,758,375 1,410,307

4,643,677,498 3,425,460,404Employees AdvancesStaff loans & advances 12,407,555 9,634,442P.F. advances 41,572,919 37,490,059Household commodities loans 25,639,922 8,636,432Medical loans 3,458,707 277,974

83,079,103 56,038,907

4,726,756,601 3,481,499,311

16.00 INTEREST EXPENSES

Interest on deposits (Note 16.01) 2,230,790,541 1,430,562,305Interest on borrowings (Note 16.02) 54,892,984 152,561,070

2,285,683,525 1,583,123,375

16.01 Interest on deposits

Members deposit (Note 16.01.1) 1,483,165,078 1,015,813,072Non-Members deposit (Note 16.01.2) 722,443,807 386,803,704Others (Note 16.01.3) 25,181,656 27,945,529

2,230,790,541 1,430,562,30516.01.1 Members deposit

Fixed deposit 7,865,044 5,384,258Saving deposit 225,112,219 183,431,845Special savings 408,714 1,019,518Children welfare fund 88,133 577,127Central emergency fund 13,522,973 13,271,242Central welfare fund 36,677,400 35,609,399Polly phone deposit 55,784,736 27,666,205Grameen pension scheme-10 years 701,940,452 427,692,669Special savings account 190,072,818 167,491,632Double in 7 year deposit 87,926,849 62,449,921Monthly profit deposit scheme 14,088,031 7,545,812Loan insurance savings fund 142,420,928 77,152,874Grameen pension scheme-5 years 7,256,781 6,520,570

1,483,165,078 1,015,813,072




2005 200416.01.2 Non-Members deposit Taka Taka

Fixed deposit 45,471,367 25,198,994Savings deposit 274,478,777 164,610,262Technology project deposit 974,948 2,384,700Grameen pension scheme-10 years (for staff) 21,813,926 17,637,620Double in 7 year deposit 291,633,074 134,420,023Monthly profit deposit scheme 83,565,175 38,726,537Grameen pension scheme-5 years (for staff) 165,479 261,505Loan insurance savings fund 3,384,531 2,690,914Forestation and other fund 956,530 873,149

722,443,807 386,803,70416.01.3 Others

Contingency fund 10,203,805 8,835,061Struggling member welfare fund 4,294,305 5,282,699Employees welfare fund 5,142,041 4,708,651P.F. trustee board-current account 3,060,308 6,006,023Grameen award funds 1,987,380 2,240,130Accounts of other organizations 368,952 684,643SVCF fund - 36,929Cafeteria 124,865 112,633Miscellaneous - 38,760

25,181,656 27,945,52916.02 Interest on borrowings

3% IFAD 41 BA 179,838 578,2562% IFAD 161 BA - 1,498,8942% IFAD 239 BA 5,534,996 5,700,705NORAD 5,358,363 5,358,363SIDA 4,776,973 4,776,972JBIC (OECF) 21,883,849 22,042,994Non-institutional borrowings - 46,088Interest on short term loans 3,627,857 6,240,611Dutch grant loan 442,889 442,777Interest on bond and debentures 13,088,219 105,875,410

54,892,984 152,561,070




2005 200417.00 OTHER INCOME Taka Taka

Service charges 35,568,282 23,794,819Bad debts recovery 852,491,346 154,446,266Rent received 25,084,727 18,645,627Polly phone service charge receipt 793,658,587 292,313,097Sale proceeds of old newspapers 518,728 387,634Income from Health Program 196,842 -Rebate from Byabosa Bikash 7,589,282 -Sale proceeds of tender forms 203,050 137,765Miscellaneous receipts (Note 17.01) 81,417,408 60,698,411

1,796,728,252 550,423,619

17.01 Miscellaneous receipts

Income from properties,Profit on sale of plant and equipment 1,453,338 538,187Income from accounts closing 47,656,970 28,430,881Others 32,307,100 31,729,343

81,417,408 60,698,411

18.00 SALARIES AND OTHER RELATED EXPENSES

Salaries 784,055,653 523,113,875Compensation for surrendering leave 20,655,960 9,299,673Personal allowances 16,440 44,026Dearness allowances 2,284,510 48,779,250House rent allowances 214,663,929 208,939,426Medical allowances 53,337,952 44,452,971Conveyance allowances 39,426,948 35,120,133Washing allowances 481,869 406,952P. F. Subscription 6,775 -Overtime 1,361,871 1,304,936Watch and ward allowances 161,991 173,095Bonus 117,749,775 82,897,325Pension & Gratuity 434,275,702 291,931,478

1,668,479,375 1,246,463,140

19.00 RENT,TAXES, INSURANCE, UTILITIES ETC.

Rent, rates & taxes 30,920,196 27,553,388Insurance 695,804 596,377Water, electricity & gas 17,098,353 13,543,483

48,714,353 41,693,248




2005 200420.00 LEGAL & PROFESSIONAL EXPENSES Taka Taka

Legal expenses 697,145 1,072,123Other professional expenses 44,675,010 2,347,467

45,372,155 3,419,590

21.00 AUDITORS' FEES

Statutory audit 524,590 474,430Special-PF audit 12,540 12,540

537,130 486,97022.00 STATIONERY, PRINTING & ADVERTISEMENT

Printing & StationeryPrinting Stationery 50,072,773 37,387,257Work Aid 4,810,160 4,044,622Printing & photocopy 5,550,664 -Office Stationery 11,825,443 9,984,386

72,259,040 51,416,265Publicity & Advertisement 495,876 504,123

72,754,916 51,920,388

23.00 MANAGING DIRECTOR'S SALARY & ALLOWANCES

Basic salary 264,000 180,000House rent allowances 72,000 72,000Medical allowances 4,800 4,200Dearness allowances 9,000 18,000Domestic aid allowance & entertainment 13,620 13,620Bonus 45,000 30,000

408,420 317,820

24.00 REPAIR & MAINTENANCE OF FIXED ASSETS

Repair & maintenanceProperty & assets 11,118,187 10,484,488Vehicles 8,116,406 6,918,261Office/Electric Equipment 3,225,080 3,343,136

22,459,673 20,745,885

25.00 DEPRECIATION OF FIXED ASSETS

Depreciation (Annexure-A)Fixed Assets 39,557,019 34,763,058

39,557,019 34,763,058




2005 200426.00 OTHER EXPENSES Taka Taka

Traveling & conveyance expenses 40,938,639 34,082,297Postage, telegram and telephone 11,603,305 8,544,421Entertainment 4,507,472 3,266,030Liveries and uniform 522,986 533,721Washing expenses 336,926 262,304Welfare and recreation 15,245,887 4,062,655Books and journals 45,542 32,869Computer expenses 92,697,659 65,137,912Bank charges 21,152,213 13,966,527Provision for contingency fund 14,032,891 10,042,035Training expenses 34,329,177 18,070,620Special programme 2,106,452 15,076Seminar & conference 1,810,840 -Film and development 589,196 540,352Lunch subsidy 117,608,924 72,385,975Income tax 5,350,654 3,103,896Group insurance 2,654,986 2,596,205Holiday work allowance 227,355 38,654Special subsidy 1,073,685 101,792Felicitation allowance 40,453,513 -Scholarship 7,073,492 4,800,228Miscellaneous expenses 66,475,447 30,336,971

480,837,241 271,920,54027.00 PROVISIONS

Provision for loans and advances (Note 27.01) 1,014,174,929 642,758,581Specific Provision 781,453,172 472,250,182General Provision 232,721,757 170,508,399Provision for interest receivable (Note 27.02) 715,188,043 375,819,776Specific Provision 695,041,100 365,967,182General Provision 20,146,943 9,852,594

1,729,362,972 1,018,578,35727.01 Provision for loans and advances

Basic and Flexible loans 760,911,268 446,894,927Housing loans 253,263,661 195,863,654

1,014,174,929 642,758,581




2005 200427.02 Provision for interest receivable Taka Taka

Basic and Flexible loans 490,533,413 167,930,607Housing loans 224,654,630 207,889,169

715,188,043 375,819,776

28.00 OTHER ASSETS (item-wise) 2005 2004 Increase/(Decrease)Taka Taka Taka

Interest receivable (Note 8.01) 3,182,281,303 3,302,503,765 (120,222,462)Advance income tax for employees 2,400,000 1,500,000 900,000Printing stationery on hand 17,283,901 14,173,468 3,110,433Office stationery on hand 264,179 143,596 120,583Zone/Area control account 48,614 (3,607) 52,221Advance income tax (Note 8.02) 201,476,872 201,423,614 53,258Security deposits 583,104 457,502 125,602Prepaid expenses 2,520,261 2,610,303 (90,042)Advance against TA/DA 157,670 308,777 (151,107)Advance against purchases and others 49,435,238 11,496,236 37,939,002Advance against house rent 2,353,454 1,422,051 931,403Stock & stores (General) 1,799,518 752,405 1,047,113Suspense account 6,245,464 5,128,757 1,116,707Advances to contractors 2,005,596 3,681,865 (1,676,269)Inter-branch adjustments (Note 8.03) 137,833,388 173,178,448 (35,345,060)G.B. superannuation fund-current account (Note 8.04) 6,998,428 130,441,027 (123,442,599)Workshop 268,251 237,615 30,636Rent receivables 27,423,847 24,493,690 2,930,157Service charge receivables 163,284,234 2,930,843 160,353,391

3,804,663,322 3,876,880,355 (72,217,033)




29.00 OTHER LIABILITIES (item-wise) 2005 2004 Increase/(Decrease)Taka Taka Taka

Interest payable on borrowing 10,998,360 13,448,011 (2,449,651)Interest sundry 1,881,083 - 1,881,083Bills or other payable 574,590,476 390,169,105 184,421,371P.F. trustee board-current account 9,903,552 125,163,566 (115,260,014)Accounts for other institutions (Note 11.01) 4,859,763 4,471,547 388,216SIDE programme-sundry deposit 191,160 191,160 -Retention money 1,031,486 1,692,754 (661,268)Earnest money 1,921,920 2,588,350 (666,430)Claimable deposits 12,572,243 10,269,157 2,303,086Unpaid salary 76,010 65,150 10,860Tax deducted at source 142,104 44,823 97,281Sundry receipts 90,969 58,003 32,966Farewell grant provision for fixed salary staff 14,231,644 2,300,000 11,931,644Miscellaneous 41,530,987 39,348,771 2,182,216Advance house rent 2,152,944 - 2,152,944Provision reserves (Note 11.02) 2,705,223,381 2,975,861,491 (270,638,110)

3,381,398,082 3,565,671,888 (184,273,806)

Provision for loans & advances (1,729,362,972)(1,913,636,778)

2005 2004Taka Taka

30.00 CASH & BANK BALANCE (at the end of the period)

Cash in hand 2,163,889 2,880,604Balances with Bangladesh bank (in local currency) 1,229,329 1,098,298Balances with other banks and financial institutions 976,724,775 793,647,103

980,117,993 797,626,005




CATEGORY OF ASSETS Balance on Additions Transferred Disposals/adjustment Balance at 1 January 2005 during the year during the year during the year 31 December 2005

Taka Taka Taka Taka Taka T

Land 38,498,951 1,204,767 358,270 367,430 39,694,558

Building & other

Structures 919,214,691 7,265,793 4,523,588 4,194,593 926,809,479

Development of

leasehold property 987,576 - - - 987,576

Vehicles 54,789,204 19,724,930 1,888,600 11,913,903 64,488,831

Office equipment 178,683,696 10,058,664 3,231,494 4,388,324 187,585,530

Electric equipment 49,555,776 2,244,262 160,058 376,676 51,583,420

Furniture & fixtures 79,146,018 27,675,157 1,192,173 949,352 107,063,996

Library books 9,141 - - - 9,141

Capital work in progress 3,357,509 8,333 26,134,082 6,945,712 22,554,212 -

2005 Taka 1,324,242,562 68,181,906 37,488,265 29,135,990 1,400,776,743

2004 Taka 1,296,216,439 39,396,335 11,813,503 23,183,715 1,324,242,562

C O S T

S TAT E M E N T O F F I X E D A S S E T S A S AT 3 1 D E C E M B E R 2 0 0 5




Rate of Balance on Charge for Depreciation Disposals/Adjustments Balance at 31 Written DownDep. % 1 January 2005 the year transferred during the year December 2005 Value at 31

during the year December 2005

Taka Taka Taka Taka Taka Taka

- - - - - - 39,694,558

1.7 154,793,554 16,079,202 2,485,872 2,658,824 170,699,804 756,109,675

10 987,576 - - - 987,576 -

20 38,857,766 5,728,171 1,885,000 11,912,375 34,558,562 29,930,269

15 125,362,613 10,612,926 2,148,023 3,302,805 134,820,757 52,764,773

10 34,101,991 3,035,731 187,722 366,081 36,959,363 14,624,057

10 63,642,451 4,100,952 1,175,760 1,482,914 67,436,249 39,627,747

10 9,104 37 - - 9,141 -

- - - - - - 22,554,212

417,755,055 39,557,019 7,882,377 19,722,999 445,471,452 955,305,291

385,292,993 34,763,058 11,123,888 13,424,884 417,755,055 906,487,507

D E P R E C I A T I O N

A N N E X U R E - A

ANNUAL REPORT 200580

Notes


Documents

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