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Tuesday, 12 March, 2002, 16:40 GMT
Grameen Bank in 'strongest position ever'
Female members of the Grameen Bank
The Grameen Bank is renowned for lending to women
The founder of the Grameen Bank, Dr Muhammad Yunus, has denied allegations that the bank is in trouble.

The Grameen Bank is one of the pioneers of micro-credit lending schemes for the poor in Bangladesh.

There have been questions raised about the bank's liquidity recently in the media, including a report by the Wall Street Journal.

The paper said that increasing competition and a fall in the bank's loan repayment rate had led to an 85% fall in profits between 1993 and 2000.

Banks lend small amounts of money, sometimes less than $100, without requiring the rigorous credit checks and collateral required by more traditional lenders.

The paper also asserted that micro-credit had lost its novelty because so many other agencies were also offering loans.

Speaking on the BBC's World Business Report, Dr Yunus said he believes financially the Grameen Bank is in its "strongest position ever".

The bank used to borrow money from the commercial market by issuing bonds or borrowing from the Central Bank but the bank no longer needs to raise funds this way, according to Dr Yunus.

Dr Muhammad Yunus
Dr Yunus founded The Grameen Bank Project in 1976

"We are paying back all the loans we took from the commercial sector and continue to expand our programme in terms of lending out money," he said.

The Grameen Bank is renowned for lending money to the least well off, especially women, so that they can launch their own businesses.

Dr Muhammad Yunus is often referred to as the world's banker to the poor.

'A need of the people'

The bank has helped inspire an estimated 7,000 micro-lenders with 25 million poor clients worldwide.

Dr Yunus believes the micro-credit system will continue to operate despite competition from other agencies offering loans.

"Micro-credit is something which is not going to disappear... because this is a need of the people," he said.

"Whatever name you give it you have to have those financial facilities coming to them because it is totally unfair... to deny half the population of the world financial services."

Dr Muhammad Yunus, Grameen Bank founder
"In Bangladesh more than 7 million families receive micro-loans"
See also:

28 Feb 02 | Business
Micro-lenders under pressure
06 Oct 00 | Africa
Empowering African women
17 Mar 00 | South Asia
Fighting poverty in Bangladesh
21 Nov 98 | South Asia
Grameen Bank chairman wins Indian award
07 Mar 02 | Country profiles
Country profile: Bangladesh
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