THE GRAMEEN BANK - GB

A Landmark towards Elimination of Poverty

NAJAM KHAN, Research Associate
May 21 - 27, 2007

The founder and MD Dr. Muhammad Yunus once said, 'these millions of small people with their millions of small pursuits can add up to create the biggest development wonder.' Rationale behind these lines to serve and eliminate poverty and to raise the standard of the people who are living below the poverty line by granting them an avenue to get on in to their own feet. The Bank itself reveals Dr. Yunus succeeding mark towards prosperity of poor people. It's a microfinance bank providing credit to needy citizen of Bangladesh's rural areas with out any collateral.

Grameen means 'rural' or 'village' in Bangla where the borrowers don't need to undergo signing any legal instrument to get feat of his need. In case of non-repayment by the borrower the bank doesn't wish to take him/her to court of law, true picture to help poor improving their socio-economic conditions, which over all reduce poverty from the country.

CREDIT RECOGNITION TO DIFFERENT COURSE GROUP

As of April 2007, it has 7.11 million members 97 percent of whom are women with 2414 branches all across Bangladesh. As of today bank is providing services to 77,458 no. of villages amounted US$487.99 million in terms of outstanding loans with an existing total numbers of outstanding beggar members are 83,118. Endowment to facilitate higher education in a country grant of US$16,194 million has been decorated this year.

AS OF APRIL 2007

MILLION US$

LOANS - OUTSTANDING

Basic Loan

446.79

Flexible Loan

28.10

Housing Loan

3.86

Other Loans

9.24

Total

487.99

No. of Beggar Members

83,118

HIGHER EDUCATION LOAN (CUMULATIVE)

Female Students No.

3,205

Male Students No.

12,989

Total

16,194

SCHOLARSHIP RECEIPTS (CUMULATIVE)

Female

28,738

Male

20,464

Total

49,202

NUMBER OF MEMBERS

Female

6,887,254

Male

229,923

Total

7,117,177

Number of Groups

1,127,549

Number of Centres

126,039

Number of Villages

77,458

Number of Branches

2,414

 


FINANCIAL HIGHLIGHTS & INFORMATION

 

31-Dec-05

31-Dec-04

31-Dec-03

31-Dec-02

US$

66.225

59.6

57.013

55.928

Exchange Rate used for Conversion

BDT/USD

BDT/USD

BDT/USD

BDT/USD

BALANCE SHEET

Total Assets (in US$)

646,489,830

514,718,843

413,882,828

337,448,935

Savings (in US$)

194,707,645

147,694,632

112,089,634

92,159,114

Total Equity(in US$)

98,964,539

93,179,419

89,531,228

104,218,716

FINANCING STRUCTURE

Debt / Equity Ratio

553.25%

452.40%

362.28%

223.79%

Deposits to Total Assets

30.12%

28.69%

27.08%

27.31%

OVERALL FINANCIAL PERFORMANCE

Return on Assets (%)

0.32%

0.18%

0.77%

n/a

Return on Equity (%)

1.95%

0.92%

2.99%

n/a

Revenues

       

Profit Margin (%)

2.19%

1.20%

5.07%

-3.87%

EXPENSES

Total Expense Ratio (%)

14.41%

14.89%

14.41%

n/a

Financial Expense Ratio (%)

5.94%

7.08%

6.41%

n/a

Operating Expense Ratio (%)

8.05%

6.04%

7.09%

n/a

RISK

Risk Coverage Ratio (%)

250.58%

115.72%

174.58%

85.88%

The bank has embarked health profitable upshots over the years. Total assets equity and savings stood at US$646.489, US$194.707 and US$98.964 million dollars during CY05 showing an increase of 25.6%, 32% and 6% respectively as compare to preceding year depicting higher debt to equity ratio of 553% in CY05 comparing CY04 indicating higher risk. In contrast with CY04 return bank has generated from its asset is of 0.18% as against 0.32% in CY05. Current year ROE of 1.95% portrays profitability's picture as of last year 0.92%. Declining expense ratio indicating showing active management encountering reduction of debt to 14.41% compared to 14.89% in CY04.

CURRENT SCENARIO

Borrowers of the bank at present own 94% of the total equity of the bank remaining 6% owned by government of Bangladesh. The bank has changed the lives of nearly 7 million impoverished people of Bangladesh. According to a recent internal survey, 64 per cent of Grameen borrowers' have crossed the poverty line. The remaining families are moving steadily towards the poverty line from below hence stepping towards elimination of poverty.