Grameen Bank has been replicated in more than 40 counties in the world. At the Head Office, I worked on different replications as well. I found that cultural, economic and legislative structures were enormously challenging for GB’s operation abroad. China, Turkey, Italy and finally America are no exception. My research and first-hand interviews with the Branch and Project Managers working overseas show that GB’s job abroad is much harder than what it does in Bangladesh.
Grameen America; a completely different cultural and economic setting. If I quote from one of the branch managers’ statement from New York City, you will see what I mean.
“People in New York are very private and busy. Both male and women are working for earning. In the daytime, nobody is staying in their houses. They don’t like to talk about their work places. At night they come back to their houses but become busy in preparing food, taking care of their children. People here also don’t like to talk much and give their information (income, abilities or if they are interested to take loan) to an unknown person at their houses, work places and streets. Even vendors and shopkeepers are not willing to talk much. Migrant people are working very hard for their settlement. As work/job is available here so they are mostly found to be doing part time job along with their regular job.”
As you can see in this quotation, this is the challenging environment that I was talking about. There is no doubt that a Branch Manager from Bangladesh has to have some skills to challenge these difficulties.
At Grameen America, for loan disbursement a staggered approach is used. The staggered approach means, first, two most needy group members receive their loan. Group members decide who these two people are. After a couple of payments, the rest of the group start receiving their loans. The staggered basis kind of replaces the group pressure in Bangladesh. Only after the first two members of a circle has been approved, received their money, and begin to pay it back, does the other members become eligible for a loan. Thus, the granting of loans proceeds on a gradual basis and develops a kind of solidarity and control in terms of watching other members’ business plans and payment routine.
Like in other countries where GB method is replicated, in NY too, there is an obvious pressure on Branch Managers and of course centre managers to reach the number of new members indicated in their 5 year business plan. In order for any micro credit program to be financially sustainable, it has to expand quickly, this and likelihood of the exclusion of poorest members from group formation may limit bank’s objective abroad.
GA is focused on poor women especially immigrant women. Who is a poor person? In Bangladesh, there are some criteria in the loan application form, criteria such as size of land owned and other properties etc. GA takes the legal definition of poor of the country where the program is being replicated as its basis to locate the poor. For example, the US Census Bureau defines poverty as a function of number individuals living in a household and the amount of income that the household generates. Generally speaking any individual earning less than $10.000 annually or 5000 per individual in a family unit of 2 or more is considered to be at the poverty level in the States. In this case, GB’s main target group falls in this category. Let alone some problems with the legal definition of poverty, the way groups are formed tend to exclude the poorest of the poor. At the end of the day, who would want to deal with a troubled member in their group and take a risk? There should be another component added to the current existing system that does not allow such exclusion
Branches in New York City face several issues. One issue is space problem. The rents are high in NY and it is hard to find a good location that is central and accessible for everyone for centre meetings. People live in apartments that are not big enough for centre meetings. Advertising is another challenge. Stopping people and talking to them on the streets of NY is a difficult job. As expected, people are more reluctant to talk about their financial issues and share information with other people due to confidentiality. This makes things very hard. In Bangladesh, however, one does not even have to ask someone if he or she needs any financial help. Poverty is very visible and there is no shame or anything to hide, because, pretty much everyone in villages is poor. So, advertising is a big challenge. Laundromats, churches, community centers, parking lots and shops are main locations for advertising. Members living in NY City have a different profile. Most of them have a job, sometimes more than one odd job, which makes it too hard for centre meetings to happen at a time that is convenient for other groups. Because people living in big cities like NY do not know their neighbors even though they live in same buildings, group formation is very tough. Another, maybe something that GB did not foresee,before they opened their first branch was that some of the members are on social assistance. Getting a loan from GB could cause some problem with the Social Assistance Administration. Things have to be worked out to prevent such unexpected outcomes.
Having said all these, it is not surprising to know that fist loan group happened to be a group with Bangladeshi origin. However, GB has made a huge progress by reaching out more than 5000 thousand members.
