It is with humble honor and respect that I submit my internship report on "Grameen Bank Loan Disbursement Evaluation and Recovery Procedures". BBA1701010033 from Sonargaon University I solemnly declare that this report on “Loan Disbursement Assessment and Recovery Procedures of Grameen Bank” has been authentically prepared by me.
Different Types Of Loan 34
Loan Disbursement and Recovery procedure
CHAPTER - I Introduction
Introduction
- Introduction of the study
- Origin of the report
- Significance of the study
- Objectives of the study
My study is on micro credit system of Grameen bank with reference to Kadamtali branch in Keraniganj district. Economic development of Bangladesh depends on rural development. To complete this internship program I have chosen a bank named "Grameen Bank" and my internship report is the best "Grameen Bank Loan Disbursement and Recovery Procedures Assessment".
General Objective
It plays an important role in students of business studies and also in the completion of theoretical studies, such a student may be a service owner or a business person in the future. It provides a guide to what type of administrative skills are required to run an institution.
Specific objectives
Scope of the study
Methodology
- Sources of information
Limitations of the study
CHAPTER - II
AN OVERVIEW OF GRAMEEN BANK
An Overview of Grameen Bank
- Brief history
- Objectives of Grameen Bank
Nobel Laureate Muhammad Yunus, founder of the bank, Yunus developed the principles of the Grameen Bank (literally, "Bank of the Villages" in Bengali) from his research and. Proving successful, the Bank's project, with the support of Bangladesh Bank, was extended in 1979 to Tangail district (north of the capital, Dhaka). The success of the bank continued and its services. Bankers Ron Grzywinski and Mary Houghton of Shore Bank, a community development bank in Chicago, helped Yunus with the formal incorporation of the bank under a grant from the Ford Foundation.
The bank's repayment rate suffered from the economic disruption following the 1998 Bangladesh flood, but recovered in subsequent years. At the beginning of 2005, the bank had lent more than $4.7 billion and by the end of 2008 $7.6 billion to the poor. The bank continues to expand across the country. In the mid-1990s, the bank began obtaining most of its financing from the Central Bank of Bangladesh.
The bonds are implicitly subsidized, as they are guaranteed by the Government of Bangladesh, and yet they are sold above the bank rate. In 2016, the parliament of Bangladesh passed the 'Grameen Bank Act' which replaces the Grameen Bank Ordinance, 1983, empowering the government to set rules for every aspect of running the bank.
The objectives of Grameen Bank are as under
- Grameen Bank Mission
- Grameen Bank Vision
- Principles of Grameen bank
- Program & Characteristics of Disbursement Micro-credit of Grameen Bank
Reverse the age-old vicious circle of 'low income, few savings and low investments' to a virtuous circle of 'low income, credit injection, investments, more income, more savings, more investments, more income'. Their housing is better and the use of sanitary latrines is higher than among non-members. Their participation in social and political activities is greater than that of non-members, and all reflect how seriously members implement these decisions.
Owned by the poor
No Collateral, No Legal Instrument, No Group-Guarantee or Joint Liability
- Nature of the organization
- Number of the employees
- Number of branches
- Number of Centers
- General features of Grameen Bank Micro-credit
- Formation of group and center
This was used to purchase a truck driven by the borrower's spouse. Under this program, an insurance fund is created by the interest generated on a savings account created by borrowers' deposits made for loan insurance purposes, at the time the loans are received. An amount equal to 3 percent of the loan amount is always deposited into this account.
If the current balance on the insurance savings account is equal to or more than the 3 per cent of the loan amount, the borrower does not need to deposit more money into this account. If it is less than 3 percent of the loan amount, she must pay enough money to make it even. The coverage of the loan insurance program has also been extended to Men with additional deposits in the loan insurance deposit account.
At the end of the period, the investor receives almost twice the amount of money she saved. A Grameen borrower receives a handset with funding from Grameen Bank and becomes a village telephone lady selling telephone services to villagers, usually in areas where landlines previously did not exist.
CHAPTER – III
Theoretical Background
Theoretical Background
- What is Micro credit?
- Let me suggest a broad classification of micro credit
- Grameen credit
- General features of Grameen credit are
No one is now shocked if someone uses the term "microcredit" to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from savings and credit associations, or credit unions, or moneylenders. When someone claims that microcredit has a history of a thousand years, or a history of a hundred years, no one sees it as an exciting piece of historical information. I think this is creating a lot of misunderstanding and confusion in the discussion about micro credit.
I suggest that we put labels on different types of microcredit, so that at the beginning of our discussion we can clarify which microcredit we are talking about. The point is - whenever we use the word "microcredit", we should make it clear what type (or cluster of types) of microcredit we are talking about. I argue that we should stop using the term "microcredit" or "microfinance" without identifying it.
I suggest that we identify the category or categories of microcredit that each organization provides while publishing this data. I call on the Microcredit Summit Campaign Secretariat to present the information they already collect on the number of clients, the number of the poorest among them, the number of the poorest clients who are women, the number of clients who have. crossed the poverty line—broken down for each of the categories of microcredit.
Chapter – V
The Credit Policy of Grameen Bank
- Definition of credit policy
- Major characteristic of credit Policy
- Objectives of credit policy
- The Credit Policy of Grameen Bank
- Types of credit policy
Credit policy means lending money to individuals or firms with specific terms related to interest and repayment. The amount of credit thus extended is controlled in part by the discount rate set by the Federal Reserve Board. Microloan: Microloan is the small size of the loan, which is found to be from Tk 15000 to Tk 20000, disbursed on the condition of weekly repayment with interest.
Credit: Usually lends money to individuals or firms on specific terms related to interest and repayment. Education Loan Programmer, in an effort to provide new opportunities to talented children of its borrowers who enroll in medical schools, honors schools and master's degree programmer. Agricultural colleges, textile engineering and other higher education programmers are eligible to receive financing from this loan window.
The loans are intended to cover all costs incurred by students from the start of their studies to completion, including admission fees, courses, necessary stationery, food and accommodation and other related necessary costs.
Main Activities of Grameen Bank
There will be five types of Loan in Grameen bank Loan operation
- Basic loan
- Different Types Of Loan
- Micro-enterprise Loans
- Flexible Loan
- Housing Loan
- Struggling Beggar Loan
- Higher education loan
This is also called "contract" or "Renegotiated" loan, because the bank, the group and the borrower must go through a process of renegotiation to arrive at a new contract with a new repayment schedule for a borrower who has the flexible loan. In flexible loan borrower can get exemption from payment of installment for a certain period of time until his good time comes. If a Flexible Loan is not repaid within two years, it is considered overdue; after three years it was completely written off.
The Bank's engineers and economists couldn't believe it themselves when their $300 house was awarded a prestigious Architecture Prize by the jury of the Swiss-based Aga Khan Foundation. Grameen Bank established a special program in 2002 called Struggling Members Program exclusively for the beggars. This loan is intended for private individuals who currently do not have the option to take out a basic loan.
Existing Grameen Bank rules do not apply to beggar members; they make their own rules. This loan is offered with the objective of promoting education among the villagers and also to prevent the number of dropouts from such needy families.
LOAN FOR HIGHER EDUCATION
- Loan Disbursement and recovery Mechanism
- Eligibility of borrower for getting loan
- Loan application
- Loan Disbursement And Recovery Procedure
- Loan Approval
- Denial of loan Application
- Loan money withdrawal
- Loan and interest payment system
After observing the success of the recovery of the first two over a period of 6 to 8 weeks, the other members remain in the line of credit and are considered alternately. Each group member is responsible for loan recovery in settlements sanctioned to any group. GB also collects Tk 2 per day from each member during the training period.
Earlier, the number of installments was 46, if any borrower delays repayment, other members including the heads of the groups and centers create pressure on him. A committee of five members headed by Zonal manager will approve the loan with annual breakdown. The area manager will re-approve the loan from the annual allocation on the basis of a status report for the student's studies.
Although loan is approved in the name of the student, the money will be transferred to the current account. The money allocated for the payment of fees and the purchase of materials and equipment can be taken in one go at the beginning of the year.
Analysis Result on Different Micro Credit Program
Basic Loan (Amount in Billion BDT)
Analysis Result on Different Micro Credit Program
- Housing Loan (Amount in Billion BDT)
- Micro-enterprise Loans (Amount Billion in BDT)
- Cumulative Disbursement and Recovery (Amount Billion in BDT)
These statistical figures show the incremental flow each year in each different microcredit program. However we may see a little different in 2020 due to the Corona virus, if we look individually at different programs we will see some programs that show a decreasing flow. The basic loan recovery rate for the basic loan is the highest since 2016, which is 97.52 in 2020 even though there is a big lag in the home loan area mainly due to the Covid effect recovery rate 93.60% where in 2019 about 99.66% has been seen.
Chapter – VI
Finding, Recommendation and Conclusion
Major Finding
I have gathered knowledge about microcredit systems and Grameen Bank's activities from being an intern. Before internship, I have only a vague idea about Grameen Bank and its activities. The task of Grameen Bank as an intern was to know the whole process of micro credit lending, repayment etc. The main result of my related topic “To identify the micro credit activities of Grameen Bank”.
There are various types of loans such as basic loan, home loan, micro enterprise loan, and higher education loan, etc. Most of the respondents of the respondent agreed that they can easily take the loan. Most of the respondents of the respondent are satisfied because they can easily get their loan within a short time.
Last year's statistical graph shows a significant change in loans to micro-enterprises because they paid special attention to that loan in that particular year. We see that some borrowers are also members of another microfinance institution because they have borrowed more money.
Recommendations
Conclusion
It seems to me that the government needs to provide a better communication system throughout Bangladesh. If the communication system is developed and somehow the monetary value of the land increases, Grameen Bank may be forced to reduce their service costs as well.
Bibliography
Books and reference
Web site
