X Variety of Credit Arrangements

 Variety of Credit Arrangements

1 Moneylender (informal )

2 Agricultural trader (informal)

3 Bank loans (commercial banks) - formal 

4. Landowner and employer  informal

5. Cooperative bank - Members of a cooperative pool their resources (money) for cooperation in certain areas(bank). These banks are registered under the cooperative acts.

There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives, industrial workers cooperatives, etc.

self-help groups- 

in small Self Help Groups (SHGs) and people (poor/women) pool (collect) their savings.

A typical SHG has 15-20 members, usually belonging to one neighborhood, who meet and save regularly

Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save

Members can take small loans from the group itself to meet their needs. The group charges interest on these loans but this is still less than what the moneylender charges

After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. The loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members

Most of the important decisions regarding savings and loan activities are taken by the group members

The SHGs help borrowers overcome the problem of lack of collateral. They can get timely loans for a variety of purposes and at a reasonable interest rate

Grameen Bank of Bangladesh   https://grameenbank.org/

"The Grameen Bank project started in 1976 as an action research pilot project in "Jobra" village in Chattogram district of Bangladesh. In 1983, the pilot project was transformed into a bank with the aim of alleviating poverty and empowering the marginalized poor in Bangladesh through micro-credit."

Grameen Bank now operates in 40 Zonal offices, 40 Zonal Audit offices, 240 Area Offices, and 2568 Branch offices, and the number of employees as of Julyl 2023 stood at 21,429. Grameen Bank is currently present in 81678 (94%) villages in the country and provides services to nearly 45 million people (including family members) through 10.38 million borrower members

from- https://grameenbank.org/about/introduction

Professor Muhammad Yunus, the founder of Grameen Bank, was the recipient of the 2006 Nobel Prize for Peace


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