More about Grameen Group, microfinance, and its development

Microfinance succeeded in a way that a former social innovation has now turned into a social norm. Yet when people keep hearing about the idea and get bored, there's still a lot of insights that we can extract from it.

The reading we have this week "Grameen Uniqlo Stores" is related to an important organization in Bangladesh: Grameen Group. Most people heard about Dr. Muhammad Yunus but didn't know this: now there's a big organization established on the basis of his Gremeen Bank. Grameen Group is a multi-faceted group of profitable and non-profit ventures.

These ventures include Social Advancement Fund (SAF), Grameen Trust, Grameen Fund, Grameen Communications, Grameen Shakti (Grameen Energy), Grameen Telecom, Grameen Shikkha (Grameen Education), Grameen Mothsho Foundation, Grameen Krishi Foundation, Grameen Baybosa Bikash (Grameen Business Development), Grameenphone, Grameen Software Limited, Grameen CyberNet Limited, Gonoshasthaya Grameen Textile Mills Limited, Grameen Capital Management Limited, Grameen Knitwear Limited, Grameen Mutual Fund One, Grameen Kalyan (Grameen Well-being), Grameen Shamogree (Grameen Products), Grameen Danone Foods (joint venture with Groupe Danone) and Grameen Uddog (Grameen Enterprise, owner of the brand Grameen Check)[1].

I'm quite stunned when I looked it up and discovered the influence and magnitude of microfinance. It's also quite astonishing that this organization has not only grew larger and more complete, but also reaching out to different other less developed countries in the world. Now "Grameen" becomes a logo for successful social innovation.

This is a video of UCF interviewing president, CEO of Grameen Foundation, Alex Counts. He talked about how microfinance began, developed, spread and what they are focusing on right now. There are two points that Alex mentioned which I think can be enlightening to us all.

1.It's exciting to see somebody with the help of these organizations is helping himself, but it's more exciting to see them succeed to a point that they began employing others. In the case of "micro-enterprise", people that got helped are becoming agents of the organizations, creating opportunities, transmitting missions and helping more others with their resources. This is a brilliant way an social innovation can stay sustainable and influential.

2. When a woman gets micro loans, the likelihood that she has input into family decisions and even community decisions is 8 time higher if she's a micro-loan client than she's not. This makes a huge difference in societies with less gender balance like Muslim societies. Interestingly, microfinance thrives in Muslim societies. We talked about social innovations being constrained by cultural and social environment, but we ignore that fact that successful social innovations can actually improve the cultural and social environment as well.

Here is another article that also provides insight: Alleviating Poverty: Mobile Communications, Microfinance and Small Business Development Around the World. It talked about how the growing mobile phone technology is helping individuals and small businesses to lift themselves up. People can use handheld devices to make monetary transfers, arrange for microfinance loans, establish small enterprises, and improve their economic circumstances. This helps them alleviate poverty and create a better situation for themselves and their families[2]. In class we discussed about the rapid speed number of mobile subscribers grow. Mobile phone products are getting to places that cars cannot even reach. Jeffrey Sachs, director of Columbia University's Earth Institute, said that wireless communication is a breakthrough technology that helps to solve the worst problems associated with health care, poverty, and educational access. With the help of mobile technologies, microfinance can better serve people in need from LDCs.

Here's my question today:

It seems that microfinance is doing so well, that it became a signboard for social innovations. But are there problems or heads-up when we're enthusiastically spreading this social innovation? Is there a trade-off between profitability and reaching poorer clients, since microfinance still has to sustain itself, sometimes known for high interest that no every one can afford? When is microfinance not the answer?

[1]Wikipedia: http://en.wikipedia.org/wiki/Grameen_family_of_organizations
[2]http://www.brookings.edu/research/papers/2013/05/16-poverty-mobile-microfinance-business-west