Grameen Bank - Banking for the Poor

                

                  

Introduction

In March 1974, Bangladesh was hit by one of the worst famine of  recent times. This was mainly caused by massive flooding along the Brahmaputra river resulting in high mortality. Not to forget the devastation caused by 1970s war with Pakistan. Moved by this catastrophe in his homeland, Professor Muhammad Yunus (in picture), Head of the Rural Economics Program at the University  of Chittagong, to make a small loan of US$27 to a group of 42 families as start-up money so that they could make items for sale, without the burdens of high interest under predatory lending. Mr.Yunus believed that making such loans available to a larger population could stimulate businesses and reduce the widespread rural poverty in Bangladesh. As of today, this small act of Mr.Yunus has grown into well established micro-credit system called THE GRAMEEN BANK benefiting thousands of rural poor in whole of Bangladesh. The main objective of the Grameen Bank is to promote and facilitate microfinance banking model among people. More specifically speaking it leverages microcredit concept to realize the benefits of microfinance.

Micro Credit

The word "microcredit" did not exist before the seventies. Now it has become a buzz-word among the development practitioners. In the process, the word has been imputed to mean everything to everybody. No one now gets shocked if somebody uses the term "microcredit" to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from the savings and loan associations, or from credit unions, or from money lenders.

Three C's of Credit:

Character: means how a person has handled past debt obligations: From credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined.

Capacity: means how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment.

Capital: means current available assets of the borrower, such as real estate , savings or investment that could be used to repay debt if income should be unavailable.

How is Grameen Bank different from other conventional banks.

How Grameen Bank functions?

The Grameen Bank is based on the voluntary formation of small groups of five people to provide mutual, morally binding group guarantees in lieu of the collateral required by conventional banks. At first only two members of a group are allowed to apply for a loan. Depending on their performance in repayment the next two borrowers can then apply and, subsequently, the fifth member as well.

 

The assumption is that if individual borrowers are given access to credit, they will be able to identify and engage in viable income-generating activities - simple processing such as paddy husking, lime-making, manufacturing such as pottery, weaving, and garment sewing, storage and marketing and transport services. Women were initially given equal access to the schemes, and proved not only reliable borrowers but astute enterpreneurs. As a result, they have raised their status, lessened their dependency on their husbands and improved their homes and the nutritional standards of their children. Today over 90 percent of borrowers are women.

 

Intensive discipline, supervision, and servicing characterize the operations of the Grameen Bank, which are carried out by "Bicycle bankers" in branch units with considerable delegated authority. The rigorous selection of borrowers and their projects by these bank workers, the powerful peer pressure exerted on these individuals by the groups, and the repayment scheme based on 50 weekly installments, contribute to operational viability to the rural banking system designed for the poor. Savings have also been encouraged. Under the scheme, there is provision for 5 percent of loans to be credited to a group find and Tk 5 is credited every week to the fund. 

Sources

http://www.grameen-info.org

Three Idiots Crossing The Valley - Team Work

   "Coming together is a beginning. Keeping together is progress.Working together is success."

- Henry Ford

Before starting illustration of teamwork and it's importance in achieving goal, lets understand the terminologies involved.

What is a Team?

           A team is defined as two or more people who interact and influence each other toward a common purpose.

What are the types of team?

Formal Team

            These are the teams or groups deliberately created by managers and charged with carrying out specific tasks to help the organization achieve its goals.

Examples of Formal Team

•  Committee - generally lasts a long time and deals with recurrent problems and decisions.
•  Command team - includes a manager and all employees who report to that manager.
•  Task forces/ Project teams - these are created to deal with a specific problem and are usually disbanded when the task is completed or the problem is solved.

Informal Team 

• They maintain and strengthen the norms (expected behavior) and values their members hold in common.
• They give members feelings of social satisfaction,status and security.
• They help their members communicate.
• They help in solving the problems.
• They may act as reference groups.

High performance teams / Super-teams 

         Groups of 3 to 30 workers drawn from different areas of a corporation who get together to solve the problems that workers deal with daily.

Self - Managed Teams

• Teams that manage themselves without any formal supervision.
• The team has responsibility for a "relatively whole task."
• Team members each possess a variety of task - related skills.
• The team has the power to determine such things as work methods,scheduling and assignment of members to different tasks.
• The performance of the group as a whole is the basis for compensation and feedback.

Characteristics of Teams :

Leadership Roles

• The formal leader of the team is usually appointed or elected.
• Informal leaders tend to emerge gradually as group members interact.
• Speaks up more than others.
• Offers more and better suggestions.
• Gives direction to the group's activities.

Stages of Team Development
The adjacent figure illustrates the five stages of team development given by Mr. B.W. Tuckman.

Team Norms

These are the expectations about how team members will behave.                                                                              

Team Cohesiveness

          The solidarity, or cohesiveness, of a team is an important indicator of how much influence the group has over its individual members.

          Four ways to improve cohesiveness.

1. Introduce competition
2. Increase interpersonal attraction
3. Increase interaction
4. Create common goals and common fates

Three Idiots Crossing The Valley - An Illustration.

Observations from the class demonstrations

	Member One	Member Two	Member Three	Total
Fully Safe	6	6	6	18
Half Safe	2	2	2	6
Fully Unsafe	1	1	1	3
Total	9	9	9	27

Learning

1. Mutual trust is necessary among the team members.
2. All the team members have equal distribution of different kinds of situation
3. All the team members have the same role in terms of effort and risk. Nobody was overloaded or relaxed.
4. Communication and feedback is essential while working as a team.Every member is important in completing the task.
5. There were equal instances when one needed each other.

Three monks, no water

           "一个和尚将承担两桶水，两个和尚将共同分担负载，但添加第三，没有人会想打水" is a Chinese proverb which roughly translated as "One monk will shoulder two buckets of water, two monks will share the load, but add a third and no one will want to fetch water". In 1980 Mr.A Da made a short 20 minutes animated film based on this proverb. This won several international awards for it's depth of meaning. Lets explore this wonderful masterpiece as part of learning.

 

Scene 1 :

   A young Buddhist monk lived alone at the top of a mountain. Every day he had to fetch water from the foot of the mountain, using a yoke and two buckets.That provided him with enough water for his personal needs and to water a small flower vase.

 

Scene 2 :

       One day, he was joined by an older monk.  Their attempts to  bring water up the mountain together, stringing a single bucket on a pole carried between them, were not very successful; and each felt it was the other’s task to fetch more water, so neither went.The flower in the vase began to die.
  

Scene 3 :

            Then a third monk arrived, and the situation worsened. As each monk refused to give way, or compromise his stance in any way, the outlook became bleaker, and certainly none of them was composed enough to meditate or pray.  Then one day, disaster struck, a thunder night with heavy rain and lightning…

          It is not disaster that brings them together, rather it was an act of a mouse. A mischievous mouse, drops burning candle and sets temple on fire, seeing this the monks run all around searching water or any other means to put off fire. They forget the arguments and difference of opinion as whom should fetch water instead they work as a team to get water from the pond down the hill and succeed in putting off the fire. Not only this, in the end three monks come up with an innovative way of fetching water using a pulley.

 

Learning :

• Experiences in crisis management comes handy to come up with new innovative methods to solve a problems
• Synergy: sum of two components is bigger than the whole.
• Productivity is about how well an organization converts resource inputs into goods or services. Workplace productivity is about how firms can utilize labor and skills, innovation, technology and organizational structure to improve the quantity and quality of their output. 
• Teamwork can lead to better decisions,products and services. The quality of teamwork may be measured by analyzing the following six components of collaborations among team members.
  1. Communication.
  2. Coordination.
  3. Balance of member contribution.
  4. Mutual support.
  5. Effort.
  6. Cohesion.

Analysis in terms of effort and productivity :

	Case 1	Case 2	Case 3
Team size	One	Two	Three
Input (Effort Units)	100 effort units by one monk	50 effort units by two monks each	Negligible effort units by three monks together
Output (water buckets per trip)	Two buckets per trip	One bucket per trip	Many buckets per trip
Productivity	50 effort units per bucket	25 effort units per bucket	Negligible effort units by three monks together
Team interaction	Individual	Loosely coupled	Strong interaction

 

A young Buddhist monk lived alone at the top of a mountain.  Every day he had to fetch water from the foot of the mountain, using a yoke and two buckets.  That provided him with enough water for his personal needs and to water his small vegetable garden.  One day, he was joined by an older monk.  Their attempts to bring water up the mountain together, stringing a single bucket on a pole carried between them, were not very successful; and each felt it was the other’s task to fetch more water, so neither went.  The vegetables in the garden began to die.  Then a third monk arrived, and the situation worsened.  As each monk refused to give way, or compromise his stance in any way, the outlook became bleaker, and certainly none of them was composed enough to meditate or pray.  Then one day, disaster struck… - See more at: http://www.papertigers.org/wordpress/books-at-bedtine-three-monks-no-water/#sthash.c6y8Dkhy.dpuf

A young Buddhist monk lived alone at the top of a mountain.  Every day he had to fetch water from the foot of the mountain, using a yoke and two buckets.  That provided him with enough water for his personal needs and to water his small vegetable garden.  One day, he was joined by an older monk.  Their attempts to bring water up the mountain together, stringing a single bucket on a pole carried between them, were not very successful; and each felt it was the other’s task to fetch more water, so neither went.  The vegetables in the garden began to die.  Then a third monk arrived, and the situation worsened.  As each monk refused to give way, or compromise his stance in any way, the outlook became bleaker, and certainly none of them was composed enough to meditate or pray.  Then one day, disaster struck… - See more at: http://www.papertigers.org/wordpress/books-at-bedtine-three-monks-no-water/#sthash.c6y8Dkhy.dpuf

S.M.A.R.T Goals

              Generally we have come across smart as an adjective, a verb or a noun. But in 1981, this word was given a whole different meaning by George T. Doran. As per this new dimension, SMART is an abbreviation. This abbreviation was framed in connection with goal setting. Now, before exploring each letter of SMART lets define the meaning of GOAL.

              A goal is a general statement about a desired outcome with one or more specific objectives that define in precise terms what is to be accomplished within a designated time frame. A goal may be performance-related, developmental, a special project, or some combination.Now, the next question is what actually goals are? Goals are an essential pillars in continuous improvement as they guide the day-to-day work of staff within an organization.

             Now,lets combine both the words i.e SMART GOALS. What are SMART Goals?

1. SPECIFIC
   This term stresses the need for a specific goal rather than a more general one. This means the goal is clear and unambiguous.To make goals specific, following five W's need to be answered.
   
   1. Who : Who is involved in this process of achieving the goal?
   2. What : What do I want to achieve?
   3. When : By when to achieve the goal?
   4. Where : Where to achieve? This is more like location but sometimes it is not stressed upon so much.
   5. Why :Why the goal has to be achieved?
2. MEASURABLE
   This term is associated with quantifying the goal. The reason behind this is the persons involved should be able to understand by how much the goal is achieved and how much more to be achieved.For example, the finish line in 100mt sprint. Here, the goal is quantified by 100mts.
3. ATTAINABLE
   This term stresses upon the goal being realistic. A goal has to be realistic and attainable as this will help in keeping the team motivated and bring in the positive attitude. On the other hand an unrealistic goal would be meaningless this in turn may bring down the morale of team. For example : I would like to get ABC certification within next two years.
4. RELEVANT
   Goals should be instrumental to the mission of the department (and ultimately, the institution). Why is the goal important? How will the goal help the department achieve its objectives? Develop goals that relate to the staff member’s key accountability or link with departmental goals that align with the institutional strategic goals. For Example: I would like to get ABC certification to join XYZ project.
5. TIME-BOUND
   A goal should have a time-frame for when the specific action will be taken and when it is
   anticipated the goal will be accomplished. Setting a time-frame is vital for it helps manager and also team to keep their actions aligned to the goal. Setting smaller deadlines throughout the time-frame (benchmarks or milestones) is a good idea to measure team's progress toward the goal.
   
   Other possible terms for SMART goals.
   
   

   S	Significant, stretching, simple
   M	Motivational, manageable, meaningful
   A	Appropriate, achievable, agreed, assignable, actionable, adjustable, ambitious, aligned,  aspirational, acceptable, action-focused
   R	Result-based, results-oriented, resourced, resonant, realistic
   T	Time-oriented, time framed, timed, time-based, time-specific,  timetabled, time limited, traceable, tangible, timely

Tower building and team work

         

“I hear and I forget. I see and I remember. I do and I understand.” 
― Confucius

          It was another session of Dr.Mandi and another innovative way of learning.We were given with wooden cubical blocks. The class was asked to choose between two scenarios. One, a person has to build a tower with given blocks as high as possible and the class was asked to predict the possible number of blocks that can be used without the tower collapsing, lets call this as case 1.Two, a person will be blindfolded and he will be the building the tower with same blocks using verbal assistance from another person, also there will be a person to monitor this activity lets call this as case 2. To make the process more interesting a small amount of bet was placed on the winning scenario. 

                   

• Case 1:-

         As in the picture to the left, a student is building the tower alone. He had full authority to make any decision regarding how to build,where to build and similar other decisions on his own. Which means complete power of the process was given to the student. The time given to build was unlimited and the process has to stop if the tower collapses. The student could build a tower of 22 blocks.

• Case 2 :-

      As in the picture to the right, three students were asked to come on the stage. One was blindfolded, one was made as an assistance and the other was to be the in-charge of the whole process. The rules were the blindfolded person should use only his left hand, assistant should only given verbal instructions and the in-charge was not to say anything to the blindfolded person but he can discuss with the assistant. Even under these constraints the team could build higher tower of 25 blocks compared to 22 blocks by the person with no constraints.

Learning :-

• Case 1 was the old school of management where the worker had full right to make decision. As a result there was a risk workers becoming too social or easily swayed by personal emotions and opinions when making decisions, rather than relying on hard data. Further, It may be more difficult to reprimand employees for poor performance or dismiss them once they have become invested in the company. To add to that the worker could build only 22 blocks tower.
• Case 2 was the example of division of labor where the blindfolded person(worker without right to make decision) was instructed by another person(manager/middle level management) further who was supervised by an in-charge(senior management). This system brought in a method of separating decision making from actions. This is called Scientific Management.

Reference :-

• Management Science
• Scientific Management

Learning simplified..

As I started another innings of learning after a considerable amount of break I was bit anxious about the things that are to come. It was our second session after a quite serious one and we were not expecting anything so "easy". But than a man dressed in most simplest way walked in, removed his footwear,sat on the edge podium platform and signaled us all to come and sit on the floor. It did look surprising but in the end it was a whole new experience. And that was Dr. Mandi.

First, he showed one of the most seen and least thought about experimental tool in our school days. I had some rough idea that it demonstrates the conservation of energy and was bit confused about it's connection with 'management study'. After doing a quick Google search on my phone I understood it is called Newton's Cradle. And I still got no  idea about it's use in the management study.  

Second, came a small foam ball having the world map on it. It was thrown at us by Dr. Mandi. He asked us "what is it?" we all in unison said "a globe". And the next thing was what is it doing here in this class. Still we had no answer. On close observation we realized it was a stress ball that we use to squeeze while sitting on our work desk few months back.

Third, came a plastic butterfly balanced on Dr.Mandi's finger. And again same question what is it and again a similar loud answer "a butterfly". But it was a more than just a butterfly, it demonstrated the center of gravity concept of elementary physics.

Well, one thing in common with all the three things was that they were all toys. So now these toys still could not understand the connection with Management in general or Principles of Organization (as later we were told that we were sitting in a POM session). But they did play a very important role in learning. They were the things that were sold on streets by students of NITIE in its famous Mandi. Briefly, Mandi is an innovative pedagogy for effective learning.In Mandi pedagogy students are assigned to engage in street selling of educational aids merchandise for a day and the experience is integrated with regular academic learning processes. Coming to the toys, they acted as tools in a two different learning activities. One, as management students we will understand the concept of selling goods to strangers on the streets. Two, the children who purchased them would learn certain scientific concept out of them. And also not forget, the stress ball, how many us knew something useful can happen even when we are stressed? having a world map on a stress ball would mean we can learn at least about one country and its geographical location per day.

In a nutshell it was a whole new learning experience of two hours. And thanks Dr.Mandi and his Mantra of learning.

“If you can't explain it to a six year old, you don't understand it yourself.” 
― Albert Einstein


Reference :

NITIE Mandi- 2009

Official link for Mandi 2009