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The Microfinance Program |
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Some recipients of the Microfinance Program
In August 2010 the Microfinance Program was started with the Help of Jack and Pam Callahan from First Scots Presbyterian Church in Charleston, SC. The principles of the Grammen Bank are being applied in this project.
The Grameen Bank is a microfinance organization and community development bank started in Bangladesh that makes small loans (known as microcredit or "grameencredit") to the impoverished without requiring collateral. The word "Grameen" is derived from the word "gram" and means "rural" or "village" in Bangla language. The system of this bank is based on the idea that the poor have skills that are under-utilized. A group-based credit approach is applied which utilizes the peer-pressure within the group to ensure the borrowers follow through and use caution in conducting their financial affairs with strict discipline, ensuring repayment eventually and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. Another distinctive feature of the bank's credit program is that a significant majority of its borrowers are women.
The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, a Fulbright scholar at Vanderbilt University and Professor at University of Chittagong, launched a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor.
The methodology being applied with LAMB's Microfinance Program is the following: Each group of women has a group coordinator. The group coordinator collects money from each woman on a daily basis plus a savings fee $0.26/day. Each Saturday the groups make a deposit in a LAMB bank account and they also have a savings account where they deposit $9/week as a requirement of the Microfinance Program. When the program grows we will create a separate bank account.
The plan is to give them more credits and also have more women’s groups in order to lend more money.
LAMB is receiving 3% in interest which goes back to providing more loans. The women are expanding their micro-businesses and growing financially. As of fall 2011, there are 25 groups of 5 women currently participating in the program.
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