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Looking to capitalize on its achievements in Bangladesh, Professor Muhammad Yunus’ brainchild, The Grameen Bank is now operating in Jackson Heights – providing small, microcredit loans to borrowers in Queens.

Grameen America is an expansion project modeled on the success of the original bank in Bangladesh. What first began for Yunus as a research project examining ways to relieve crushing rural poverty has grown into a multi-national, billion dollar lending business with 2,100 branches around the globe, and has now arrived in Queens to do business in the midst of a multitude immigrant communities.
At the April ribbon cutting ceremony, Yunus, the bank’s founder, was mobbed by throngs of people welcoming him to the neighborhood.

City Councilman Eric Gioia (D-Sunnyside) was on hand to welcome Grameen and Professor Yunus to Queens.
“Bank accounts and small business loans, the tools for economic mobility, should be available to everyone. I’m excited Dr. Yunus and Grameen America chose Queens as the home of the first Grameen America branch,” said Gioia, a member of the City Council Finance Committee.
Grameen’s model is to provide group loans to the working poor in hopes of lifting them out of poverty by providing small amounts of credit to individuals within a collective that are normally ignored by traditional banks.
Ritu Chattree, Vice President for Operations and Finance for Grameen America sees the expansion as addressing important needs in Queens. She also hopes the bank can take advantage of business in immigrant communities and help would-be borrowers, many of whom are ignored by larger banks, lift themselves out of poverty by extending small loans for a variety of purposes.

“Our bank functions almost the opposite of a traditional bank,” Chattree said referring to the specific parameters that Grameen operates within.

In order to qualify, individuals must live below the poverty line – below $21,000 for a family of four.
The specific parameters of the loan vary from traditional lenders, but criteria remain.

“You don’t need collateral, a guarantor or credit history to qualify, but you do need four other people looking to get a loan for income generating purposes,” Chattree said.
Individuals can apply for loans ranging in amounts from $500 to $3,000, with most disbursed between $2,000 and $3,000.
The bank officially began operations in America in November 2007, but began service in Jackson Heights in late January. The first loan disbursements were made on January 15, 2008 to two groups – one to Dominican business people from Corona, and the other to Bangladeshis from Woodside.
By mid-April, the bank had already extended $350,000 in loans to 165 borrowers. They hope to add several branches in the next few years and eventually operate nationally.
The bank operates on a group model to build on peer pressure from members to repay loans. Each member in a group has their own responsibility to repay, but the collective model is how loans are secured for borrowers.

Grameen traditionally has focused on offering loans to women-to the tune of 97 percent-as Grameen believes that lifting women out of poverty is key to positively affecting families.

Abdullah Zahid and Nahar Alam, Bangladeshi-Americans, are less excited about Grameen America and said they are unsure the microcredit model will work here in Queens. Both raised issues of the bank’s relatively high interest rates and concerns over whether undocumented immigrants would qualify
for loans.

However, both Zahid and Alam commended the work of Dr. Yunus
in their home country.

Zahid specifically praised Grameen’s social work to improve the lives of the poor in Bangladesh.

“Not only did they get money, they teach them basic health consciousness,” Zahid said. “Also they teach people to send their kids to school.”

According to Zahid, whether or not Grameen America will succeed in Queens will be determined by its usefulness in this country, Alam agrees.

She feels the bank fills a need in Bangladesh — may not be useful in the U.S. because of the variety of options here.
“Grameen coming here, I have mixed feelings about it,” she said. “Here they have other options. In general Grameen has helped many people in Bangladesh, that’s the idea-in Bangladesh there are no other options, how it will be in Queens I don’t know exactly.”

The origin of the bank can be traced to 1976 when Professor Yunus, then a Fulbright Scholar and professor at the University of Chittagong, launched a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation.

Another unusual feature of the bank is its ownership. The bank is 94 percent owned by poor borrowers, most of whom are women. The remaining 6 percent is owned by the government of Bangladesh.

With significant growth in the last four years Grameen is a steady business with stable finances. As of October 2007, borrowers numbered 7.34 million, and 97 percent were women. The number of borrowers has more than doubled since 2003 when the bank had 3.12 million members.

Since its founding, the bank has distributed $6.55 billion in loans, of which 5.87 billion has been repaid. The bank currently claims a recovery rate of 98.35 percent, up from the 95 percent recovery rate claimed in 1998.