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The Grameen Lending Model |
Grameen America uses the Grameen group lending and savings model that has been developed and refined over thirty years by the Grameen Bank. The basis of the system is a peer group model in which borrowers encourage, support and learn from each other.
The group model requires prospective borrowers to form or join 5 member “Groups”. Groups are then organized into Centers with up to 8 Groups to a Center. Center meetings take place on a weekly basis and are facilitated by Center Managers who are employed by Grameen. The Group meetings and Grameen’s lending standards promote successful repayment and also provide a valuable forum for best-practice sharing and training on financial issues such as credit scores, savings and related needs like health and insurance.
The Grameen model also incorporates required savings into all loan relationships so that borrowers build financial resources for the future. Savings are required in several ways and savings are promoted throughout the borrower relationship because Grameen believes that savings are an essential ingredient to the future financial stability of its borrowers.
The Grameen model targets women because Grameen’s experience around the world has shown that women are more comfortable with the group lending model, are more likely to repay their loans, and are more likely to direct their earnings to providing better clothing, housing, nutrition, health care and education to their families.
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