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Written by Aaron Konen
on Thursday, 04 March 2010
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24th and Q Street, the heart of South Omaha, is an unlikely spot to find a New York City businessmen and a Bangladeshi economist. A crowd of several hundred packed into the retired City Hall building to welcome world-renowned Professor Yunus and Grameen America’s CEO Stephen Vogel, who were in town to celebrate the grand opening of Grameen America’s second U.S. branch office.
Although the United States is a new and unique market for Grameen, Yunus said, “people across the globe are the essentially the same, with similar wants, needs, and aspirations.”
While Omaha’s less densely populated demography will be a challenge to Grameen’s proven model, success in the area may lead to expansion into many diverse metropolitan areas across the United States.
“May Omaha start the chain of expansion,” said Yunus as he wrapped up his opening speech.
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Let’s Become One of the Top Ten Ideas for Change in America |
Written by Julie Gerstein
on Tuesday, 02 March 2010
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Grameen America has been chosen out of more than 2,500 entries as a semi-finalist in the Ideas for Change in America contest.
The Ideas for Change in America is a grassroots social change competition that encourages people to identify and support the great organizations and ideas that they believe will help the world.
The ten most popular ideas will be presented to members of the Obama Administration and will garner the support and benefit of the Change.org community. Change.org is committed to helping push good ideas and organizations forward.
Grameen’s mission to provide low-cost loans for working poor helped us make it to the semi-finals. Since the program’s inception in 2007, we’ve helped 2000 borrowers raise themselves and their families out of poverty.
And now we need your help! Vote to keep us on top of Change.org’s list! Final voting is on now until March 12, and every vote counts!
Once you’ve voted, encourage your friends and family to cast a ballot in favor of Grameen America on Facebook and Twitter.
VOTE NOW
SHARE ON FACEBOOK
TWEET ABOUT IT
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St John's and Grameen America |
Written by Chris Honess, St John's University student, intern at Grameen America
on Monday, 01 March 2010
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In an article “Microloan Program Fits Well With St. John's Vincentian Spirit” in Catholic New York in August 2009, Ron Lajoie captures the essence of one of St. John’s University’s most amazing days, a day that would affect my future forever. On April 15, 2009 I was visiting the St. John’s University campus for the first time. It was there that I was invited to a huge festival where Nobel Peace Prize Laureate Muhammad Yunus would be speaking and where I could buy tons of items to help the borrowers of his famous microfinance institution Grameen America, not “Grameen Bank America” as the article calls it. I listened to Muhammad Yunus talk about his dreams for poor people all over the world. He then announced a new partnership with St. John’s that would allow “students an opportunity to learn and work in the field of microfinance as they support Grameen America's pioneering plans to expand throughout New York and the country.” I had no idea that day in April of 2009 that I would be one of those “students” learning and helping such a great organization.
St. John’s is a Catholic and Vincentian university located in New York City. It seeks to provide students with a strong and distinctive spiritual, values-based education. At St. John’s they have a department called the Vincentian Institute for Social Action (VISA) where students can serve towards a greater cause of pursuing social justice. VISA fosters development of a worldview that recognizes global interdependence and the need for all peoples to work together toward universal social justice. It was this aspect that brought me to the school. I knew that St. John’s would be a place where I would be able to serve different people and work for social justice. And now I am here at Grameen America a new partner with St. John’s, working for just that.
The experience as an intern has totally changed my perspective on how poor people handle money. I had always thought that most poor people just throw their money away at pointless things but I soon found that New York’s poor are some of the best investors in their businesses and they do things with a $1500 loan that I could never do with that amount. I have learned so much about the concepts of microfinance and community and how that blend makes Grameen America so great. I am a true believer in the values and vision of Grameen America and of St. John’s and I realize that if it had not been for that day back in April 2009 I would not be where I am today.
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Charging For Risk vs. Mitigating the Risk |
Written by Jenene Allison
on Monday, 22 February 2010
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This month the Credit CARD Act of 2009 will make some changes to the credit card industry, but will not cap the interest rate that companies are allowed to charge customers. High-risk customers, those with no credit history or a bad credit history, are charged the highest rates—rates that can be as high as 79.9%. Why so high? Credit card companies explain that they are “pricing for the risk” associated with these types of customers. http://finance.yahoo.com/banking-budgeting/article/108839/issuer-of-79.9-interest-rate-credit-card-defends-its-product?mod=bb-creditcards
Yet charging high interest rates on credit cards does not seem to be succeeding in mitigating the risk associated with high-risk customers. Banks know this. Just this week the Chief Executive at J. P. Morgan stated that “We know we are going to lose a lot of money next year in cards and it could be north of $1 billion in both the first quarter and the second quarter.” (http://www.heraldtribune.com/article/20100217/COLUMNIST/2171020/2127?p=2&tc=pg)
But there are ways to mitigate the risk of lending to high-risk customers, as Grameen America is proving in this country today. Customers of Grameen America qualify as high risk by any standard: they have no collateral and no credit history. Most of them are recent immigrants. And yet they receive loans—and they repay these loans at a rate of 99%. The secret is building relationships through the group lending model. Borrowers form groups of 5 who will learn financial literacy, start savings accounts, and borrow money as a unit. Each individual develops a plan to start a small business. The group decides who gets the first loan to start their business. If any one borrower is ever late repaying, loans to everyone in the group are suspended. Borrowers know each other, and the banker knows the borrowers personally. With branches in New York City, Omaha, Nebraska, and soon San Fransisco, Grameen America has reached over 1,700 high-risk customers and recouped 99% of the money lent.
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