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| What is Grameen America? |
Grameen America is a nonprofit microfinance organization based in New York and founded by Nobel Peace Prize recipient Muhammad Yunus. Grameen America is dedicated to alleviating poverty and encouraging entrepreneurship through micro-credit. Grameen America provides small, low-cost loans to people living below the poverty line in the United States. These loans support income-generating activities.
Grameen America launched its first branch in Jackson Heights, Queens in January 2008. As of August 15, 2009, Grameen America has disbursed over $2.3 million in loans to over 1,000 borrowers. Grameen America currently maintains a repayment rate of over 99%.
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| How does Grameen America help its borrowers escape poverty? |
Grameen America provides small loans to low-income individuals for income generating activities. For example, a borrower might use a loan to invest in equipment for a food-cart, purchase a sewing machine for a tailoring business, or start a home-based day-care business. Grameen America loans offer borrowers an alternative to predatory payday lenders, and allow them to start or expand income-generating activities that help provide for their families. Grameen America also helps build credit by reporting to Experian, one of the three major credit rating bureaus. [Top]
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| What are the amounts and terms for Grameen America’s loans? |
Grameen America’s Basic Loan has a term of six months or one year. The interest rate is 15% on a declining basis, a fraction of rates charged by check cashers, pay day lenders and other predatory lenders. There are no other fees. No collateral is required. Each week the borrower repays a portion of the principal and interest, and also makes a deposit into a personal savings account. [Top]
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What is the "group lending model"?
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Grameen America requires prospective borrowers to form or join a group of five members, who meet weekly. These groups are organized into “centers”, with 3 to 6 groups to a center. Centers meet weekly in borrowers’ homes or a local community center. The group and center model encourages a culture of financial responsibility where peer-support leads to 99% rate of repayment. The group also serves as a social network of voluntary mutual support, as members are individually responsible for their own loans, they are expected to voluntarily provide assistance to their peers where needed. [Top]
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| What is Grameen America’s approach to encouraging savings by its borrowers? |
Grameen America puts a strong emphasis on the importance of regular savings. Grameen America borrowers must demonstrate a pattern of savings as part of their qualification for loans. Savings are required during the life of each client’s loan relationship with Grameen America. More specifically, Grameen America requires savings during the client’s initial “group training” period of $2 per day for 5 days and $2 per week during the program. On average, borrowers have deposited more than this minimum.
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| Who are Grameen America’s borrowers? |
Grameen America’s borrowers are individuals who fall below the poverty line and do not have access to mainstream credit. They are predominantly women, though the company will also serve men. Many of our borrowers are single mothers and recent immigrants to the United States.
It has been Grameen’s experience that women are more likely to repay their loans regularly, participate in weekly group meetings, and direct their entrepreneurial earnings to providing better clothing, housing, nutrition, health care and education to their families. This results in a multiplier effect in which each individual loan positively affects an entire family. [Top]
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| Where does Grameen America operate? |
Grameen America launched its first branch in Jackson Heights in January 2008, and is currently expanding to other locations throughout New York City. Grameen America has recently opened a location in Omaha, Nebraska, and as of August 2009 center managers have recruited over 100 borrowers. Grameen America now serves communities in Brooklyn and Washington Heights as well. Grameen America is reviewing other potential branch locations across the United States. Some areas currently under study are North Carolina, Arkansas, Washington DC, California, Massachusetts, and New Jersey. [Top]
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| How does Grameen America decide where to open a branch? |
Grameen America will open a branch in any city or neighborhood with a substantial underserved population and a supportive community that can commit approximately $2 million of start-up capital. [Top]
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| What about cultural differences? Will the Grameen model, which developed in rural Bangladesh, work in the United States? |
Professor Muhammad Yunus, founder of the Grameen Bank, always says that poor people are the same everywhere, and that you can always trust them to pay back. It is the concept of trust in poor people that has made Grameen programs successful with its borrowers worldwide. The same holds true of Grameen America in the U.S., where 36 million people live below the poverty line. Grameen microcredit programs have succeeded all over the world, demonstrating that the concept of credit as a basic human right transfers easily across cultures. We have not changed the Grameen group-lending model at all; the only difference is the average loan size. [Top]
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| How is Grameen America funded? |
Grameen America currently relies on grants, charitable contributions, and long-term loans from individuals, corporations, and foundations. Grameen America is a registered 501c3 nonprofit organization, and can receive tax-deductible contributions.
Over the next five years, Grameen America’s objective is to become a sustainable social business not dependent upon external grants or donor capital. [Top]
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| How does Grameen America make money? |
Grameen America’s principal source of revenue is the loan interest paid by borrowers. Interest income provides revenue to support management costs and fund additional loans.
Grameen America is a social business. Our goal is to become a sustainable organization that supports itself. Any profit will be re-invested in the company to disburse more microloans. [Top]
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| How does Grameen America ensure that loans are being utilized for business purposes? |
Grameen America center managers regularly monitor borrower activities. Center Managers audit the receipts of every purchase that the borrower makes with the loan, assuring that the proceeds of the loan are utilized to purchase income-producing items in accordance with the business plan presented. Center Managers also conduct site-visits to the borrower’s workplace and home to see how business is going. [Top]
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| What is microcredit? |
Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor. [Top]
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| How has Grameen America’s repayment rate been affected by the economic downturn? |
Grameen America’s repayment rate has not been negatively affected by the economic downturn. It remains very strong – over 98%. [Top]
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| Is demand for Grameen America’s loans increasing? |
Yes, demand is growing. With the larger problems in the economy, particularly growing unemployment, more people find themselves in a marginal economic position. With fewer jobs to be had, Grameen America loans offer a good opportunity to generate income from self-employment. [Top]
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| How does Grameen America measure the impact its loans have on borrowers lives? |
We use a survey to track key social metrics and measure the difference our loans are making in borrowers lives. Because we are still a relatively new organization, we will have more data as time goes on. We are actively developing a set of social metrics to capture this data over time. [Top]
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| What does ‘Grameen’ mean? |
It means ‘rural,’ literally ‘of the village.’ Muhammad Yunus started lending to impoverished people in the rural villages of Bangladesh in 1976. [Top]
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| How does Grameen America recruit borrowers? |
Center Managers rely on word-of-mouth and grassroots networking to recruit borrowers. We do not advertise or market in traditional ways. Center Managers are hired based on strong local knowledge and ties to the community. [Top]
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| What is the relationship of the Manhattan office to the Queens Branch? |
The Manhattan headquarters office is responsible for raising capital, corporate development, and providing resources for our branches. The Manhattan office is also responsible for raising funds to expand to new communities.
The Queens office manages repayment and disbursal processes, as well as the recruiting of new borrowers. [Top]
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| What are Grameen America’s plans for growth? |
Grameen America intends to become a national, sustainable social business. There is need for our microlending services in all 50 states. We would like to see a Grameen America branch wherever there is an underserved community that can benefit from our model of microfinance. [Top]
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| How can I get involved? |
There are a few options:
1) To make a donation, visit: www.grameenamerica.com/get-involved/contribute.html
2) To learn more about Grameen America, check out our website, join our Cause on Facebook, Follow us on Twitter, or subscribe to our monthly newsletter.
3) If you would like to volunteer, host an event or information session, or explore a partnership with your company or organization, email Dan Brodhead at
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