What this is all about?

Grameen means "rural" or "village" in Bangla, so literally this translates to 'Stories from the Village.' I travelled to Bangladesh in 2010 and did an Internship with the Grameen Bank and was amazed by the people there especially in its rural villages. The 'desh' and its people are an inspiration and will always have a special place in my heart.

Since then, I continually see how important villages are, be it in rural Bangladesh, or in urban core neighbourhoods in Canada. A strong village is what brings people together and welcomes newcomers and supports those in need. Villages are what I fight for and this blog is how I do it.

Monday, June 7, 2010

The SME Finance Gap and Our Project

Ok, after a week of Ross sitting in the Grameen Fund's office and my failed week of trying to get a second village trip planned, we finally have a trip with Grameen Fund happening!

Ross and I will be going to one of Grameen Fund's booths in Noakhali, and Melanie (one of the other interns at the Bank) and an intern from Grameen Fund will be going to Feni. Feni and Noakhali are both about 5-6 hours south east of Dhaka and about an hour apart from each other.

So, what does the Grameen Fund do? They provide, among other things, financing to small and medium enterprises (SME). This is very important because these businesses are often unserved by both the commercial banks and microfinance banks. They are not poor enough to be accepted by MFIs and they require more services than they can provide. Commercial banks generally do not consider SME financing important since it is much more profitable for them to focus on much larger clients. Thus there is the 'SME finance gap' between these two groups of banks.

This is where Grameen Fund and other SME financing institutions such as BRAC and Basic Bank come in. They provide their clients with loans and other services to help them grow and expand their businesses. This is very important for a country to continue is development. It is all great if everyone in the country has a cow and a rice paddy field, but some of these businesses must keep growing for substantial growth to occur.

The Grameen Fund used to operate through Grameen Bank branches, however just 9 months ago they left and started operating through their own branches or 'booths'. Now they find, appraise, disburse and collect their own loans. It is our job to make profiles of the two branches that we are visiting and asses the progress that they have made and make recommendations on how they can improve! We also want to do a couple case studies of some of their clients, and get to do some in depth interviews with them.

So that is what I will be doing for the next couple days in Noakhali. I will probably not have any internet so I will update you when we get back!

Cheers,
Mike
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