csr grameen bank

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CORPORATE SOCIAL RESPONSIBILITY (CSR)

PRACTICES OF GRAMEEN BANK


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Research Analysis Report

on

CSR Practices of Grameen Bank

Prepared For

Dr. M. Ataur Rahman

Professor

Department of Management Studies

University of Dhaka

Prepared by

Abid Ashraf Minar

3-13-24-087

Md. Emran Hoque Razi

3-13-25-068

Wasif Ahmed

3-13-24-084

Course: EM- 557 Corporate Governance)

Department of management Studies

EMBA Program

University of Dhaka

Date of Submission: July 24, 2014


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July 24, 2014

Dr. M. Ataur Rahman

Professor,

Department of Management StudiesUniversity of Dhaka

Subject: Request to accept the submission of analysis report on CSR Practices of

Grameen Bank

Dear Sir,

Here given is the complete report on Corporate Social Responsibility (CSR) Practices of

Grameen Bank that you have assigned to us as a part of the course requirement of EM 557

Corporate Governance.

This was a great opportunity for us that we had our chance to do this report and we are very

glad that we have completed it with our full effort. We have used all our lessons and

knowledge for the betterment of this report. This report gave us an opportunity to illustrate

the knowledge of the techniques and skills that are used in the entrepreneurship development

process. We have tried our level best to include all the necessary information and it was very

challenging. We have used all the lesson of our previous courses and learnings for this report

and we believe that this report was one of the best works we have done so far.

However we do understand that our report may be flawed in some aspects. We hope you willbe kind enough to comment on its strengths and flaws so that we can more adequately

prepare and write better report in the future.

We will be really grateful to you if you please accept our report and once again we would like

to thank you for giving us this opportunity to show our in-depth knowledge that we have

gained from your classes.

Yours Sincerely,

________________________

Abid Ashraf Minar

________________________

Md. Emran Hoque Razi

________________________Wasif Ahmed


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Executive Summary

The Grameen bank is a different kind of bank than a typical bank. The bank is mainly

provides microcredit to the poorer population. Originated in Bangladesh, the bank and its

microcredit systems are now available in many other countries. The Bank today continues to

expand across the nation and still provides small loans to the rural poor. By 2006, Grameen

Bank branches numbered over 2,100. Its success has inspired similar projects in more than 40

countries around the world and has made World Bank to take an initiative to finance

Grameen-type schemes the name Grameen is derived from the word gram which means

"rural" or "village" in the Bengali language. In this report we have put in our effort to find out

the CSR practices and activities of Grameen Bank in Bangladesh. We have tried to get a idea

of how the activities of Grameen Bank affecting the people in Bangladesh. In this report, we

have presented the findings in five categories, which are:

In Introduction, we have tried to identify the scope, background, rationale, objective and

limitations of the study that we have observed.

In Methodology part, we tried to explain the process of how the information was collected

and process to presentable information.

In Profile, the details of Grameen Bank are provided with the specifications of works, history

and objectives.

In Findings and Analysispart, we have interpreted the collected data and tried to provide

explanation of the received information.

In Conclusion and Suggestion, We have come up with a brief conclusion and

recommendation for the future programs of Grameen Bank.


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Acknowledgement

The completion of the report was much owing to our instructor Dr. M. Ataur Rahman. It is

through his viewpoint that the different extensive part of the report could be completed. Also

we give our utmost gratitude and respect to our honorable instructor for giving us his

prolonged time behind teaching us every step in completing this project. It is through his

teachings that without his support and advices this report could not have been completed so

successfully and timely.

We would like to show our utmost gratitude to the people at Grameen Bank who has assisted

us with providing a lot of information and indication to finish this project although they were

operated under a lot of constrain and regulation. Without their help, this report would not

have been possible.

We would also like to thank all the group members who gave effort to finish the project with

such devotion, target, energy and their participation. However, this project was a combined

effort. Therefore, all the credit of our accomplishment spreads to all the helping hands.


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Table of Content

Topics Page No.

Introduction 01 - 05

Research Methodology 05 - 06

Profile of the Organization 07 - 11

Findings and Analysis 11 - 22

Conclusion and Suggestions 22 - 25

References i


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Analysis Report on CorporateSocial Responsibility (CSR)

Practices of Grameen Bank


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Analysis Report on

Corporate Social Responsibility (CSR) Practices of Grameen Bank

Introduction

Scope of the study

The subject of corporate social responsibility is very motivating and interesting. Mostly

because of it is still a relatively new subject here, in Bangladesh and there are quite a few

researches done about this field. Although responsible thinking and caring for the

surrounding have become more important and popular, Bangladeshi society is still not used to

generally demand bigger responsibility from companies and organizations. Therefore, in most

cases, the economical results are still more taken into account. Fortunately, consumers

together with the rise of civic society have taken bigger lead and turned their attention to

more socially responsible subjects. Therefore it is only a matter of time, when more

companies understand the necessity for corporate social responsibility activities.

Background of the study

Nowadays, the responsibility of companies has become one very important issue, and the

term corporate social responsibility (abbreviated as CSR) is widely used in every-day

business. Still, the origin of the definition itself is not very clear. But one is certain - the

history of corporate social responsibility is long and varied. Although the roots of CSR trace

back to the emergence of business in general, the real concept of it was formally formulated

quite recently.

The modern era of corporate social responsibility and serious discussion around the topic

began in 1950s when the book Social Responsibilities of the Businessman by Howard R.

Bowen, who is so-called the Father of Corporate Social Responsibility, was publicized.

This book was specifically concerned with the doctrine of social responsibility. Bowens

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belief was that social responsibility is no panacea, but that it contains an important truth that

must guide businesses and companies in the future (Carroll, 1999, p. 268-270).

This academic concept was followed by a number of different interpretations by Cheit in

1964, Blomstrom and Davis in 1966, Steiner in 1975, etc. But in academic researches, only

Bowenss explanation of CSR is the one, which is considered to be the first definition of the

term corporate social responsibility. According to Bowen, CSR refers to the obligations of

businessmen to pursue those policies, to make those decisions, or to follow those lines of

action, which are desirable in terms of the objectives and values of our society (Juholin,

2003, p 21-22).

The definition itself does not give the full notion of corporate social responsibility. Therefore,

in order to make the further research clearer, different aspects of CSR must be introduced

more in depth and in the research, we have tried to find that.

Rationale of the study

Grameen Bank (GB) has reversed conventional banking practice by removing the need for

collateral and created a banking system based on mutual trust, accountability, participation

and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any

collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst

in the overall development of socio-economic conditions of the poor who have been kept

outside the banking orbit on the ground that they are poor and hence not bankable. Professor

Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director, reasoned that

if financial resources can be made available to the poor people on terms and conditions that

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are appropriate and reasonable, "these millions of small people with their millions of small

pursuits can add up to create the biggest development wonder."

As of October, 2011, it has 8.349 million borrowers, 97 percent of whom are women. With

2,565 branches, GB provides services in 81,379 villages, covering more than 97 percent of

the total villages in Bangladesh.

Grameen Bank's positive impact on its poor and formerly poor borrowers has been

documented in many independent studies carried out by external agencies including the

World Bank, the International Food Research Policy Institute (IFPRI) and the Bangladesh

Institute of Development Studies (BIDS).

Gramen Bank has extended their reach from poverty alleviation to provide support to the end

with their extensive CSR programs via their sister concerns. Grameen Bank follows these

following 16 commitment for its entire sister organization.

We shall follow and advance the four principles of Grameen Bank: Discipline, Unity,

Courage and Hard work in all walks of our lives.

Prosperity we shall bring to our families.

We shall not live in dilapidated houses. We shall repair our houses and work towards

constructing new houses at the earliest.

We shall grow vegetables all the year round. We shall eat plenty of them and sell the

surplus.

During the plantation seasons, we shall plant as many seedlings as possible.

We shall plan to keep our families small. We shall minimize our expenditures. We

shall look after our health.

We shall educate our children and ensure that they can earn to pay for their education.

We shall always keep our children and the environment clean.

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We shall build and use pit-latrines.

We shall drink water from tube wells. If it is not available, we shall boil water or use

alum.

We shall not take any dowry at our sons' weddings; neither shall we give any dowry

at our daughter's wedding. We shall keep our center free from the curse of dowry. We

shall not practice child marriage.

We shall not inflict any injustice on anyone; neither shall we allow anyone to do so.

We shall collectively undertake bigger investments for higher incomes.

We shall always be ready to help each other. If anyone is in difficulty, we shall all

help him or her.

If we come to know of any breach of discipline in any center, we shall all go there and

help restore discipline.

We shall take part in all social activities collectively.

In this study, we look to find out the objectives and achievable of Grameen Bank and how

those have been effective in the target.

Objectives of the study

The major objective of the study is to measure the impacts and effects of CSR of Grameen

Bank and to find, understand and document the processes and activities and correlate them to

get a clear picture of the level of the total CSR activities of Grameen Bank. The research

covers details about the product and services, overview and also facilities provided by the

organization towards the community to aid and support the need. The main focus is on the

analysis of the standard of activities provided and their effect on the people and community.

The specific objectives are:

To relate theoretical knowledge to practical experience in the CSR activities.

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To determine the effectiveness of the CSR activities of Grameen Bank and make

suggestions on the basis of the evaluation

To know about the previous and present corporate responsibilities of Grameen Bank.

Limitations of the study

In every project, there are several limitations related to the people as it is important to take

the opinion from the target group to conclude with an approximate result. The limitations that

I might face are:

Participants might not show interest in answer the questions.

People directly responsible like - The Executive Director, Manager, Deputy Manager

might not give time to show how it is helping out the company.

The survey will take much time to identify the actual scenario through the research

method that will be applied in my project achievement.

Due to the lack of information transparency, confidentiality and unwillingness to

share information, it will be difficult to portrait the real picture.

In addition, secondary sources like official websites, annual reports and so on will also be

used. Lack of practical experience and time constraint may hinder this study from being

comprehensive.

Research Methodology

Methodology:

As this was a qualititative research, we have conducted a survey within the personnel of

Grameen Bank. In order to conduct our research, we developed a set of questions to collect

our primary data. We have used simple open ended questions.

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Data Collection:

Data Collection Method:

The data collection method of this study considered of both primary and secondary sources.

Majority of the information was collected from secondary sources.

Data Sources:

The primary sources included interviews with the bankers.

The primary Sources are as follows-

Face to face conversation with the respective officers and staffs of the Bank.

Informal conversation with the clients.

Practical work exposure from the different of the branch covered.

Relevant file study as provide by the officers concerned.

The Secondary Sources of data and information are

The annual report, general report, official documents and foreign exchange manual of the

bank from the year 2005-2006.

Population and Sampling Parameter

The sample size of this study is approximated to be 10 (Ten) employees at Grameen Bank

Bangladesh, Bangladesh.

Data Analysis Method:

We have used the data analysis software entitled MS Excel and MS Word to represent our

survey data. We have used descriptive method & causal method in our research.

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Profile of the Organization

Establishment/History

The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus,

Head of the Rural Economics Program at the University of Chittagong, launched an action

research project to examine the possibility of designing a credit delivery system to provide

banking services targeted at the rural poor. The Grameen Bank Project (Grameen means

"rural" or "village" in Bangla language) came into operation with the following objectives:

extend banking facilities to poor men and women;

eliminate the exploitation of the poor by money lenders;

create opportunities for self-employment for the vast multitude of unemployed people

in rural Bangladesh;

bring the disadvantaged, mostly the women from the poorest households, within the

fold of an organizational format which they can understand and manage by

themselves; and

reverse the age-old vicious circle of "low income, low saving & low investment", into

virtuous circle of "low income, injection of credit, investment, more income, more

savings, more investment, more income.

Functions of the organization/objectives

The Grameen Bank do not have any specific mission and vision but in a simple word the

mission of Grameen bank is to liberate the poor, especially the women, from the repressive

economic milieu in which they play out their mundane existence on a daily basis. Since the

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Grameen Bank is not a single organization, it does not have any specific vision. Each part of

Grameen bank project has its individual vision.

Organogram/organizational chart

Since 2007, Grameen Bank has been has changed their organizational structure which is as

follows:

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Present Programs

At present, Grameen Bank is conducting the following described activities successfully:

Grameen Danone

Grameen and Group Danone went into a joint venture to create a yogurt

fortified with micro-nutrients to decrease malnutrition for the children

of Bangladesh. The yogurt is produced with solar and bio gas energy

and is served in environmentally friendly packaging. The first plant

started production in Late 2006. The 10-year plan is to establish 50+

plants, create several hundred distribution jobs and self-degradable

packaging.

Grameen Veolia

Water Ltd

Nature has bestowed the blessing of abundant fresh water on

Bangladesh. Nearly 8 million wells were bored during the 1970s and

80s. However, for essentially geological reasons, almost all of the

groundwater has been found to be contaminated with arsenic, very often

at levels that make it a health hazard. Today, more than 30 million

Bangladeshis have fallen victim to chronic arsenic poisoning and some

have even died. Grameen Bank and its sister organization helps the

affected people by making arsenic awareness program. Also Grameen

and Veolia Water have decided to join forces to provide tailor-made

solutions that supply drinking water to the poorest communities of

Bangladesh.

Grameen BASF

Grameen and BASF went into a joint venture because there are areas

in Bangladesh where there is a high risk of catching Malaria (58K

newly infected in 2007). The product created is a mosquito net to

protect against malaria, which those families would sleep under. Half amillion nets have already been produced. The idea of the joint venture

was to develop affordable products for the poor that could protect them

from deadly diseases. Grameen BASF has also started the production of

micronutrient sachets to sprinkle on food, which provides essential

nutrients that are missing from the poors daily diets.

Grameen GC Eye

Care Hospital

In 2001, GB established the Prevention of Cataract Blindness Project,

which has now become the Grameen GC Eye Care Hospital in Bogra as

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a social business. A second Eye Care Hospital has now been built in

Barisal, in southern Bangladesh, which began operating in April 2009.

Professor Muhammad Yunus and The Green Children opened First

Grameen Eye Hospital in Bangladesh on May 12, 2008 Structured as a

Social Business Enterprise, Facility Can Potentially Grow To Perform

50,000 Examinations, 10,000 Cataract Operations Annually.

Grameen Intel

Today information technology (IT) excludes 80% of the world

population. We want to take IT to the lower income people to improve

the lives of people in poverty.

Grameen Intel is tasked at looking at ways to assist the rural poor by

examining their needs and finding appropriate solution using IT. We

will provide packaged solution consisting of the hardware and software

to provide access, information and training to an impoverished

entrepreneur or local entity who can offer IT services, which in turn

would have a social impact in the village community.

Grameen

Healthcare

In establishing Grameen Healthcare (GH), Grameen aims to extend the

success microcredit to health care. The mission of GH is to establish

sustainable best practices in a broad range of health care services for a

broad market for the entire population but focusing on the poor and

poorest.

GH will enable the poor to be self-sufficient in addressing their health

care needs such that they can accept but not require outside assistance.

This mission will be developed in a number of ways that complement

one another.

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Future Programs

Grameen Bank is currently working on several other programs to be introduces in near future

as part of the CSR program. Among those, one program is going to be implemented in a full

fledge as it is a pilot program only. This is:

CSR using Micro Credit loan (no payback)

Grameen Bank Credit Delivery means taking credit to the very poor in their villages by

means of the essential elements of the Grameen credit delivery system. In the aspect of CSR

using Micro Credit loan (no payback), GB wants to introduce that people can take loan under

common loan program but as a CSR program, some of the people will be exempted from

paying back the money for a short period of time to improve their condition or who have lost

the investment partially for a totally unavoidable reason.

Findings and analysis

Meaning of CSR

In one statement, CSR can be described as corporate initiative to assess and take

responsibility for the company's effects on the environment and impact on social welfare.

The term generally applies to company efforts that go beyond what may be required by

regulators or environmental protection groups.

Corporate social responsibility may also be referred to as "corporate citizenship" and can

involve incurring short-term costs that do not provide an immediate financial benefit to the

company, but instead promote positive social and environmental change.

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Companies have a lot of power in the community and in the national economy. They control

a lot of assets, and may have billions in cash at their disposal for socially conscious

investments and programs. Some companies may engage in "eye-washing", or feigning

interest in corporate responsibility, but many large corporations are devoting real time and

money to environmental sustainability programs, alternative energy/clean technology, and

various social welfare initiatives to benefit employees, customers, and the community at

large.

Importance of CSR

In recent decades the concept of Corporate Social Responsibility (CSR) turned out to be a

vital strategy for companies to survive in a ruthless market environment. In a condition where

markets shift and customers preferences becomes more unpredictable and complex,

adopting CSR strategy could be a powerful tool for survival.

CSR is behavior by business over and above legal requirements, voluntarily adopted because

businesses deem it to be in their long-term interest. Second, CSR is intrinsically linked to the

concept of sustainable development: businesses need to integrate the economic, social and

environmental impact in their operations. Third, CSR is not an optional add-on to business

core activities but about the way in which business is managed.

In some countries Government regulations such as environmental and social issues have

increased, and standard and laws are also often set at a supranational level. An example of

this is the European Union, where regulations and standards are applied to all member

countries. Moreover, buyers in these countries would want to know that the product they buy

did not come from companies and manufacturing processes that caused or even poses threat

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to the environment. They are also concerned with the companys records - giving fair wages,

good working conditions, and the like. These are highlighted in the media, which becomes a

clear advantage to businesses with good CSR programs.

Companies with good business practices have clear advantages in convincing investors.

Recent studies have shown that a growing number of investors would prefer companies with

strong CSR programs. They see CSR involvement as an indication of the companys long-

term potentials over the course of time and the success of the organizations CSR programs

benefiting them and the community overall. It brings a positive image among the people who

are externally and internally connected to the organization.

Important functions of the organization

Grameen Bank has a wide range of CSR activities in Bangladesh. Apart from their basic

objectives which are to liberate the poor, especially the women, from the repressive economic

milieu in which they play out their mundane existence on a daily basis, they conduct a wide

range of CSR activities .Some of which are stated below:

Functions Descriptions

Grameen Danone

Grameen and Group Danone went into a joint venture to create a yogurt

fortified with micro-nutrients to decrease malnutrition for the children

of Bangladesh. The yogurt is produced with solar and bio gas energy

and is served in environmentally friendly packaging. The first plant

started production in Late 2006. The 10-year plan is to establish 50+

plants, create several hundred distribution jobs and self-degradable

packaging.

Grameen Veolia

Water Ltd

Nature has bestowed the blessing of abundant fresh water on

Bangladesh. Nearly 8 million wells were bored during the 1970s and

80s. However, for essentially geological reasons, almost all of the

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groundwater has been found to be contaminated with arsenic, very often

at levels that make it a health hazard. Today, more than 30 million

Bangladeshis have fallen victim to chronic arsenic poisoning and some

have even died.

Grameen BASF

Grameen and BASF went into a joint venture because there are areas

in Bangladesh where there is a high risk of catching Malaria (58K

newly infected in 2007). The product created is a mosquito net to

protect against malaria, which those families would sleep under. Half a

million nets have already been produced.

Grameen GC Eye

Care Hospital

In 2001, GB established the Prevention of Cataract Blindness Project,

which has now become the Grameen GC Eye Care Hospital in Bogra as

a social business. A second Eye Care Hospital has now been built in

Barisal, in southern Bangladesh, which began operating in April 2009.

Grameen Intel

Today information technology (IT) excludes 80% of the world

population. GI (Grameen Intel) wants to take IT to the lower income

people to improve the lives of people in poverty.

GrameenHealthcare

In establishing Grameen Healthcare (GH), Grameen aims to extend the

success microcredit to health care. The mission of GH is to establish

sustainable best practices in a broad range of health care services for a

broad market for the entire population but focusing on the poor and

poorest.

Funds allocation for CSR

The following is the compact version of Balance Sheet 2008-2013 (As on December 31),

Amount in Million Taka. The highlighted part in the balance sheet comprises the amount of

total CSR activities of Grameen Bank allocated for CSR. In a rough estimate, it was implied

that the total CSR cost of each year is proportionate and significantly higher than previous

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year. It was also mentioned that among total amount indicated under the category entitled

Deposits and Other Funds, 35% to 45% was allocated and spent on CSR.

Property

and Assets2009 2010 2011 2012 2013

Cash in hand 1,119,488 895,544 2,231,411 1,823,203 2,142,260

Balance with

other Banks1,295,311,555 1,310,692,097 1,707,326,718 65,722,224,684 78,867,820,345

Investment 37,750,731,641 47,757,186,897 52,612,942,436 267,000,000 267,000,000

Loans and

Advances

56,359,028,995 68,417,977,923 77,639,276,539 83,132,069,058 87,707,167,495

Fixed assets 1,222,283,438 1,379,656,418 1,385,864,651 1,376,616,524 1,408,734,663

Investment

property111,558,215 108,540,014 104,236,476 103,979,126 101,389,589

Other assets 6,265,224,923 6,422,009,079 6,989,404,848 8,348,559,788 10,582,321,620

Total: 103,005,258,255125,396,957,972 140,441,283,079 158,952,272,383178,936,575,972

Capital and Liabilities

Share Capital:

Authorized 3,500,000,000 3,500,000,000 3,500,000,000 3,500,000,000 10,000,000,000

Paid Up 523,949,300 547,689,200 571,163,300 597,99,000 734,049,100

General and

Other

reserves

6,219,533,668 6,815,290,863 7,301,082,417 8,542,175,828 9,660,233,528

Revolving

Funds- - - - -

Deposits and

Other Funds87,286,490,709 109,206,727,710 122,225,348,999 136,510,770,808 154,363,389,103

Borrowings

from banks

and foreign

institutions

1,669,160,600 1,589,027,602 1,526,969,669 1,464,911,737 1,402,853,805

Other

Liabilities7,306,123,978 7,238,222,597 8,816,718,694 11,836,423,010 12,776,050,436

Profit and

loss account- - - -

Total: 103,005,258,255125,396,957,972 140,441,283,079 158,952,272,383 178,936,575,972

Contingent

Liabilities

- - -

Source: Grameen Bank Website, 17/06/2014

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Problems of CSR of Grameen Bank

Graduation of Beneficiaries

The microcredit program of Grameen Bank was criticized by some expert. Grameen

Bank has really enabled its beneficiaries to have pushed themselves across the threshold line

of poverty, but the bank continues further providing those loans. This questions the

accomplishment of extracting the poverty from the poor population. The system and practice

of Beneficiary Graduation been there from the inception till today with efficient control over

such a process, there may not have been 8,300,000 beneficiaries of Grameen Bank today.

Rate of Interest and Spread

A Spread is, simplistically, the difference between the rate of interest that one realizes from

ones beneficiaries (from borrowers, here) and the rate of interest that a borrower has to pay

to the lender of funds/capital. The microcredit programs thus operate in a context that is

highly protected and rests on a severe imbalance against formal indigenous lending

organizations that operate in an extremely competitive context.

The Rate of Interest

The rates of interest being charged by microcredit programs/organizations of Bangladesh are,

in general, extremely on the higher side. There is no denying the fact. Though there was no

interest to be paid by the borrowers in that project, most of the time borrowers are asked by

the bank to provide high rate of interest for the fund.

Grameen Borrowers Knowing the Trade

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Grameen cared almost nothing about whether the loan recipients knew their trade. In case

borrowers do not know the trade, how can they make good use of the loans and repay timely.

Most of the tine the borrowers do not know the rules and in the end they lost the entire asset.

Beneficiaries of CSR of Grameen Bank

CSR should not be viewed as a drain on resources, because carefully implemented CSR

policies can help the organization as well as the society and its stakeholders and Grameen

Bank has set a perfect example of this.

a) The Business Benefits:

Win new business

Increase customer retention

Develop and enhance relationshipswith customers, suppliers and networks

Attract, retain and maintain a happy workforceand be an Employer of Choice

Save moneyon energy and operating costs and manage risk

Differentiate yourself from your competitors

Generate innovationand learning and enhance your influence

Improve your business reputationand standing

Provide access to investmentandfunding opportunities

Generate positive publicityand media opportunities due to media interest in ethical

business activities

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b) Society and stakeholders benefit:

Grameen Bank (GB) is one of the largest NGO working with the socio-economic uplift of the

poor section, especially women of the society. The main focus on the present study is to

determine change in livelihood status of women beneficiaries of GB in twenty selected

centers of Jaforgonj north of Debidwar branch under Comilla district; and to identify the

existing problems faced by GB participants. Data were collected from 100 randomly selected

sample (15% of population), out of population size 663 of GB beneficiaries. Data indicated

that change in livelihood status scores of the respondents varied from 4 to 24. The average

change in livelihood status score was 13.94. The largest proportion (62 percent) of women

belonged to medium, compared to 25 percent and 13 percent belong to low and high change

in livelihood status categories respectively. Results of t-test on change of livelihood status in

three dimensions namely change of farm and house hold materials', change of housing,

health and sanitation' and change of annual family income' in terms of before' and after'

involvement were found highly significant. Out of 11 selected characteristics, education,

annual income, credit availability, communication with GB employee and staff and attitude

towards micro-credit program of GB were positively significant and only age and non-

locality behavior were negatively significant with dependent variable of change in livelihood

status. Family size, farm size, organizational participation and attitude towards community

did not show any significant relationship with change in livelihood status. Problems faced by

beneficiaries in respect of lack of sufficient amount of credit' was the most serious problems,

credit disbursement delayed was the second problem and the third problem was belief on

dogmatism and fatalism' with problem index 199 among the six existing problems.

Forty percent of Bangladeshis live in poverty, with an annual income of $497 per year.

Bangladesh has one of the highest child and maternal malnutrition rates in the world. One-

third of its people and 45% of its children under five suffer from moderate to severe

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malnutrition. That makes the Bangladeshi community even more susceptible to sickness,

poor eye conditions, and stunting, making them less able to work and study.

Danone and Grameen's tack was to go big. Their mission was to reduce poverty by providing

nutrition to the poor of Bangladesh through a unique community-based model. Their initial

goal: to set up a yogurt producing company in a plant near Bogra, Bangladesh. That's the first

point: The production space was locally based and relevant to the people they were serving.

Next, they worked on a compelling, meaningful brand. The yogurt was branded under

GrameenDanone Foods Ltd as "shokti," meaning "strength" in Bengali. One cup would

provide 30% of a child's recommended daily nutrients, and it was marketed at a price even

the poorest could afford.

Thirdly, they funded it with equal commitment: Both provided funding. It wasn't the

traditional 'corporation donates to a nonprofit.' In a similar vein, profits are reinvested in the

company and the market prices are set to make the enterprise self-sustaining.

Principles of performing CSR

Companies are likely to have activities scattered across the map, but thats not where they

have to staynor is it how the benefits of CSR are maximized. Many companies start with

pet projects, philanthropy, or propaganda because these activities are quick and easy to

decide on and implement. The question is how to move toward CSR strategies that focus on

truly concreting value for the business and society. The accompanying examples suggest

three principles for moving toward this goal.

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1.

Concentrate your CSR efforts.Management time and resources are limited, so the

greatest opportunities will come from areas where the business significantly interacts

withand thus can have the greatest impact onsociety. These are areas where the

business not only can gain a deeper understanding of the mutual dependencies but

also in which the highest potential for mutual benefit exists.

2. Build a deep understanding of the benefits.Even after selecting your chosen areas

of opportunity, finding the potential for mutual value creation is not always

straightforward. The key is finding symmetry between the two sides and being open

enough to understand issues both from a business and a societal perspective.

3. Find the right partners. These will be those that benefit from your core business

activities and capabilitiesand that you can benefit from in turn. Partnering is

difficult, but when both sides see winwin potential there is greater motivation to

realize the substantial benefits. Relationshipsparticularly long-term ones that are

built on a realistic understanding of the true strengths on both sideshave a greater

opportunity of being successful and sustainable.

Applying these principles to choosing the appropriate CSR opportunities prompts additional

questionsnamely: What are the one or two critical areas in our business where we interface

with and have an impact on society and where significant opportunities exist for both sides if

we can creatively adjust the relationship? What are the core long-term needs for us and for

society that can be addressed as a result? What resources or capabilities do we need, and what

do we have to offer in realizing the opportunities?

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Measures to overcome the problem:

Too often, executives have viewed corporate social responsibility (CSR) as just another

source of pressure or passing fad. But as customers, employees, and suppliersand, indeed,

society more broadlyplace increasing importance on CSR, some leaders have started to

look at it as a creative opportunity to fundamentally strengthen their businesses while

contributing to society at the same time. They view CSR as central to their overall strategies,

helping them to creatively address key business issues.

The big challenge for executives is how to develop an approach that can truly deliver on these

lofty ambitionsand, as of yet, few have found the way. However, some innovative

companies have managed to overcome this hurdle, with smart partnering emerging as one

way to create value for both the business and society simultaneously. Smart partnering

focuses on key areas of impact between business and society and develops creative solutions

that draw on the complementary capabilities of both to address major challenges that affect

each partner.

Ways to overcome the problem

There is no single accepted definition of CSR, which leads to plenty of confusion about what

constitutes a CSR activity. We can begin to develop a working definition of CSR by thinking

about its dual objectivesbenefiting business and societyand the range of potential

benefits in each case.

Many businesses pursue CSR activities that can best be termed pet projects, as they reflect

the personal interests of individual senior executives. While these activities may be presented

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with much noise and fanfare, they usually offer minimal benefits to either business or society.

In the middle are efforts that can make both sides feel good but that generate limited and

often one-sided benefits. With philanthropy, for example, corporate donations confer the

majority of benefits on society (with potential but often questionable reputational benefits to

the business). Similarly, in whats best referred to as propaganda, CSR activities are focused

primarily on building a companys reputation with little real benefit to society? Some cynics

suggest that this form of CSR is at best a form of advertisingand potentially dangerous if it

exposes a gap between the companys words and actions.

None of these approaches realize the opportunities for significant shared value creation that

have been achieved through smart partnering. In such ventures, the focus of the business

moves beyond avoiding risks or enhancing reputation and toward improving its core value

creation ability by addressing major strategic issues or challenges. For society, the focus

shifts from maintaining minimum standards or seeking funding to improving employment,

the overall quality of life, and living standards. The key is for each party to tap into the

resources and expertise of the other, finding creative solutions to critical social and

businesses challenges.

Conclusion

Conclusion:

In conclusion, the Grameen Bank is a better mousetrap because of its ability to help the

poorest in Bangladesh while being self-sustainable. There are three reasons why the Grameen

Bank is successful in assisting the poor. Muhammad Yunus, the founder, has become a global

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figurehead for microcredit and has attracted donations; support and attention to both Grameen

and poverty. However, there are several criticisms of the Grameen Bank.

While the interest rates charged by Grameen are lower than loan sharks, critics argue that

rates are still high enough to perpetuate debt amongst the poor. Furthermore, some suspect

that the Banks repayment rates are overstated, especially since financial statements are not

up to date and audited by external entities. Finally, Grameen seems to create economic self-

empowerment for poor individuals but fails to alleviate poverty on an aggregate level. While

the Bank might not be able to create a museum of poverty, there certainly have been

improvements to the livelihoods of many.

Recommendations

Grameen Bank Credit Delivery means taking credit to the very poor in their villages by

means of the essential elements of the Grameen credit delivery system.

Grameen Bank credit delivery system can include the following features:

1

There is an exclusive focus on the poorest of the poor. Exclusivity can be ensured by:

i) Establishing clearly the eligibility criteria for selection of targeted clientele and

adopting practical measures to screen out those who do not meet them.

ii) In delivering credit, priority has been increasingly assigned to women.

iii) The delivery system is geared to meet the diverse socio-economic development

needs of the poor.

2 Borrowers can be organized into small homogeneous groups.

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Such characteristics facilitate group solidarity as well as participatory interaction. Organizing

the primary groups of five members and federating them into centers has been the foundation

of Grameen Bank's system.

3 Special loan conditionality which are particularly suitable for the poor. These include:

i) very small loans given without any collateral

ii) loans repayable in weekly installments spread over a year

iii) eligibility for a subsequent loan depends upon repayment of first loan

iv)

individual, self-chosen, quick income generating activities which employ the

skills that borrowers already posses

v) close supervision of credit by the group as well as the bank staff

vi) stress on credit discipline and collective borrower responsibility or peer

pressure

vii) special safeguards through compulsory and voluntary savings to minimize the

risks that the poor confront

viii) Transparency in all bank transactions most of which take place at center

meetings.

4 Simultaneous undertaking of a social development agenda can address basic needs of

the clientele.

This can reflected in the "sixteen decisions" adopted by Grameen borrowers. This helps to:

i) raise the social and political consciousness of the newly organized groups

ii) focus increasingly on women from the poorest households, whose urge for

survival has a far greater bearing on the development of the family

iii) Encourage their monitoring of social and physical infrastructure projects -

housing, sanitation, drinking water, education, family planning, etc.

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5

Design and development of organization and management systems capable of

delivering program resources to targeted clientele.

The system has evolved gradually through a structured learning process that involves trials,

errors and continuous adjustments. A major requirement to operationalize the system is the

special training needed for development of a highly motivated staff, so that the decision

making and operational authority is gradually decentralized and administrative functions are

delegated at the zonal levels downwards.

6

Expansion of loan portfolio to meet diverse development needs of the poor.

As the general credit program gathers momentum and the borrowers become familiar with

credit discipline, other loan programs are introduced to meet growing social and economic

development needs of the clientele. Besides housing, such programs include:

i) credit for building sanitary latrines

ii)

credit for installation of tube wells that supply drinking water and irrigation for

kitchen gardens

iii) credit for seasonal cultivation to buy agricultural inputs

iv) loan for leasing equipment / machinery, i.e., cell phones purchased by Grameen

Bank members

v)

Finance projects undertaken by the entire family of a seasoned borrower.

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References

1. Carroll, A.B. (1999). Corporate Social Responsibility: Evolution of a Definitional

Construct. Business Society, 38(3), 268-295. Sage Publications

2. Juholin, E. (2003). Born Again - A Finnish Approach to Corporate Social

Responsibility. Studies in Communication (26). University of Jyvskyl, Department

of Communication

3.

www.google.com

4. Blogs.fanbox.com

5. http://en.wikipedia.org/wiki/Grameen_Bank

6. http://www.benedix.co.uk/2010/12/muhammad-yunus-careers-in-microfinance/

7.

http://trifter.com/asia-pacific/grameen-banks-unresolved-ethical-issues/

8.

http://www.grameen-info.org/

9. http://www.grameen-

info.org/index.php?option=com_content&task=view&id=32&Itemid=91

10.www.grameenfoundation.org/

11.www.grameen.com/

12.www.grameenamerica.com

13.

www.unesco.org/education/poverty/grameen.shtml

14.opinionator.blogs.nytimes.com

15.www.gdrc.org/icm/grameen-info.html

csr grameen bank

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