Today, we are accustomed to a variety of credit areas, ranging from mortgage loans to short-term loans to salaries. In particular, the variety of financial organizations that provide such services is also striking.
Therefore, remote online personal loans are no longer news for anyone, but on the contrary, customers are actively developing and using microloans more and more often. At the same time, few people know the history of the first microcredit.
Microcredit “fatherhood” or did it come from
Payday loans are an alternative form of the usual for all bank loans. This debt form was created with the aim of raising the financial position of the vulnerable segments of the population, since for large banks such an audience was considered unreliable from the point of view of their solvency. Due to the lack of financial support, the poor were deprived of the opportunity to improve their standard of living.
This was the reason for the emergence of the main motivation in the fight against poverty. The founder of microcredit was a professor of economics and an entrepreneur – Muhammad Yunus, who in 2006 received the Nobel Peace Prize for his decision in this matter.
An experiment that really worked out
The idea of Yunus was accompanied by a long-standing problem of poverty. The scientist believed that the poor strata of the population have a sufficient number of perspectives, ideas and opportunities, but cannot realize them due to the insufficient amount of the material base.
Four main stages of microcredit development:
- The famine of 1974 in Bangladesh was the last straw, and put an end, which delimited thought and vigorous action to solve the problem.
- The entrepreneur created a financial organization called Grameed Bank, which means “Bank of Villages”. This institution, at the beginning of its work, functioned exclusively in test mode, because it was important to understand from practice: whether microcredit services will be in demand.
- But very quickly, the theory received its confirmation, and already in 1976 from his personal funds, Yunus issued the first loan of $ 27 to women who were engaged in making furniture from bamboo. Previously, entrepreneurs did not have much success in their business, because their net earnings amounted to about 2 cents, which even by the standards of the 20th century cost nothing.
- Since then, the main target audience of Grameed Bank has been women. Indeed, in the opinion of its founder, unlike men, a woman makes more rational use of funds for the welfare and development of their own families. Interesting fact: today, the ratio of ownership of shares of this bank is 94% owned by local residents, mainly women. The remaining 6% belong to the state.
Independence of the first microcredit institution
The financial structure met its expectations in a test mode, so in 1983 Grameed Bank received the status of an independent bank.
Further, Yumus began active efforts to develop his business. One of the innovations was the group responsibility system. The technology of such work was as follows: microcredits were issued not to a single borrower, but to a whole group of 5 people. Each of them was a guarantor of each other. If the client did not pay his debts on time, the other participants were deprived of the right to receive money on credit.
Also, as an increase in the client audience – to very poor people, the loan was given out interest-free and with a few “sparing” terms. Such a system very well influenced the return statistics, since it was 98.5%, which was quite an effective indicator.
The above factors have influenced the fact that the bank was twice at the closing stage, but fortunately, the management was able to cope with the troubles. Therefore, to date, the company has managed to help 50 million borrowers, and issued loans worth more than $ 5 billion. Now, the bank has more than 2 thousand branches with 17 thousand employees. Yunus still plans to share his success with the poor and spend the money received from the Nobel Prize on a new business for the production of cheap high-calorie food for the poor.