Hartford Needs A Branch Of The Grameen Bank 

Even when the name “Grameen Bank” is mentioned among bankers they look puzzled. That has been my experience working recently with a group of Carolinians to bring a branch of the international bank to the Carolinas. They have already established branches in New York and Omaha, Nebraska. In the latter case, Mrs. Warren Buffett simply wrote a check for $2M to capitalize the bank in that city. When senior executives at Bank of America were approached to garner their support because they could over time benefit from the bank’s programs, they unabashedly said they never heard of such a bank. But the bank, since its founding in 1976, has made loans internationally totalling nearly nine billion dollars.

Jamaican-born Patrick Chang, took the initiative to invite the president of Grameen America, Dr. Vidar Jorgensen, to take a look at Charlotte as a possible site for the branch in North Carolina. Patrick saw it as an opportunity to put an economic safety net under the lives of refugees and immigrants who could not qualify for a business loan under any other circumstances. Patrick works with these groups via a mental health agency and identifies and channels resources to enable them to move quickly to economic self-sufficiency and independence.

But Grameen is very well known in Bangladesh the place where it was founded and traces its origin to Economics Professor Muhammad Yunus, Nobel Prize Winner and Head of the Rural Economics Program at the University of Chittagong. He launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor; the very poor. The Grameen Bank Project (Grameen means "rural" or "village" in Bangla language) came into operation with very specific objectives to extend banking facilities to poor men and women.

The intent was to eliminate the exploitation of the poor by moneylenders and create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh who were mostly women from the poorest households within the fold of an organizational format, which they can understand and manage by themselves.

Why Hartford? With a population of 121,000 where 25 percent of adults live below the poverty line of $24,000 annually and a high immigrant population, many of whom have skills that may be marketable and with a very high unemployment rate, the city is right for a program like that offered by the Grameen Foundation. This enterprise presently operates in 23 countries and is very experienced and competent in helping to lift the poor out of poverty assisting millions of the world’s poorest, especially women, improve their lives and escape poverty through access to microfinance and technology. In short, they create economic opportunities for the world’s marginalized and Hartford is America’s second poorest city. 

Last week, Wells Fargo & Company and Grameen America announced a $1 million equity-equivalent investment by Wells Fargo in Grameen America, at a limited below market rate loan reserved for community development organizations that have a growing business relationship with Wells Fargo. The investment will help Grameen America launch its operations in the San Francisco Bay Area beginning this summer. Branch Managers from Grameen Bank in Bangladesh will relocate to San Francisco to open and manage branch operations. Grameen America, in addition to the Omaha branch, currently has three branches in New York where Morgan Stanley Corporation has been advising them on their capital requirements. 

Grameen uses a business model comparable to what is known in the English-speaking Caribbean community as “Partner” or “Su-su.” It is centered on a group lending and savings model that is a peer group model in which borrowers encourage, support and learn from each other. The 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 and they each hold each other accountable. 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. So, who is going to call Grameen America and speak with Dr. Jorgensen and begin the process of bringing hope to many in Hartford? You may reach him on 781-939-2572.

Patrick Chang did and Charlotte Grameen anticipates opening for business by year’s end.