Bank For Needy Has Possible Niche In S'pore

Source : The Business Times, August 14, 2007

SINGAPORE) A Grameen Bank in affluent Singapore? And why not, since there is a low-income group - deemed uncreditworthy by 'normal' banks - who otherwise have to turn to loan sharks and other lenders who charge exorbitant interest.

A talk yesterday by the bank's founder, Nobel Laureate Muhammad Yunus, brought out the social-minded and bleeding heart activist-types who wanted to know, among other things, how a Grameen 'bank for the poor' - which requires no collateral and turns banking practices on their head - could be set up in Singapore.

Professor Yunus and Grameen Bank, which he started in 1976, received the 2006 Nobel Peace Prize for their efforts to 'create economic and social development from below'.

It all started in his homeland Bangladesh where he was appalled by the rural poor's lack of access to financing. 'The banking system is utterly wrong. It is totally unjust because it rejects those who need the money most,'- Prof Yunus , he told a packed hotel ballroom in a lecture organised by the Institute of Policy Studies.

Grameen Bank reverses conventional banking principles. With most banks, 'the more you have, the more you can get'. Which also means, you get nothing if you have little or nothing. Grameen Bank goes on the basis that the poorest and penniless get the highest priority in getting a loan. It requires no collateral, guarantor or any legal instrument, but urges its borrowers to adopt '16 decisions' in social, educational and health areas, including giving and taking no dowry.

Today, the bank has more than 7.21 million borrowers, of whom 97 per cent are women, who are also its owners. It lends out of its borrowers' deposits. Its 2,430 branches are located mostly in Bangladesh villages, because 'the bank should go to the people'. And Grameen has spawned the concept of micro-credit to numerous countries, including the United States.

As for building a Grameen in Singapore, Prof Yunus - whose numerous accolades include making the list of BusinessWeek's 30 Greatest Entrepreneurs of All Time - didn't say no. 'Start small and build it up,' he said.

Grameen is popularly dubbed Bank of the Poor, but Prof Yunus hopes to change it by 2015 to Bank of the Former Poor, he quipped. After all, 64 per cent of its borrowers crossed the poverty line last year, he said.