Random Ridiculous Rave

Ok, so I came across something GOOD for once in the news that I wanted to share. In the recent age of banks failing, needing bailouts, restricting credit, etc. ... one bank is increasing the credit it lends out, and becoming bigger and better and offering loans to small businesses in often less than optimal areas.

Grameen America, the U.S. offshoot of an Asian microlending institution founded by Muhammad Yunus, is now in its third year of operation in the US and is expanding. This year, the small Bangladeshi bank which already has branches in New York; Omaha; &, D.C. is going to open its fourth branch in San Francisco.

According to Newsweek, since it opened in 1983, Grameen has loaned billions to borrowers around the world, most of these being women below the poverty line. It boasts a 98% percent repayment rate as well. Granted, most of the loans are $1,500 or less, with high interest rates, but the rates are better than borrowers could find elsewhere, and there are some unique practices which Grameen credits its success rate with.

The Grameen model supposedly works because of peer pressure. As do a lot of things in this world. Each Grameen borrower is required to attend a weekly meeting with other borrowers, who, as a group, are responsible for communal payback rates (e.g. the group cannot borrow more money if individual members don’t pay back their individual loans). Each individual borrower must also have add to a personal savings account with Grameen to help create a financial cushion to deal with any unforeseen problems or emergencies while building his or her business.

I think in a world where banking has become faceless, and most people, including myself, have switched to online banking to even avoid dealing with a teller, that this is awesome. It hearkens back to when you had a friend at the bank, who would fight for you and your small business. Instead of a broker on Wall Street, who lumps you in with 1,000-2,000 businesses to spread his risk and save his bonus.

If you want to get involved with Grameen, they have volunteer opportunities here. Or you can just follow them on twitter and promote them with your good PR. They also have a link where you can donate... but I'm against donating to a bank on the whole, even one as nice as Grameen America. If you want to donate, check out Kiva ... where you can lend money to starting businesses in impoverished places, and when they pay you back personally, you can choose to take back your money or invest is a new business!