Grameen Financial Services Pvt Ltd
n developing countries like India, access to financing and other banking services can be a major challenge for the country’s poor, seeking to raise their standard of living. These people often have little, if at all, income or property to use as collateral to secure loans from formal lending institutions like banks. For these people even small amounts of money – enough to purchase cattle or provisions for a store – can make a difference to their livelihood. Mainstream banks find it challenging to offer services to the poor because the income generated cannot cover the bank’s cost of servicing the loans. Consequently, the poor are often forced to turn to informal and unregulated loan sources – moneylenders, who sometimes charge interest as high at 100% a month. The result is a cycle of endemic poverty that is almost impossible to break.
Grameen Financial Services (GFS) was born out of this need for timely and affordable credit to India’s poor and low-income households. We drew inspiration from Give Us Credit (Alex Counts – President & CEO, Grameen Foundation USA), a book that detailed the remarkable stories of Bangladesh’s poor raising themselves out of poverty through the microfinance movement that was spearheaded by Nobel Laureate Professor Muhammad Yunus. Beginning in 1999 as a project under the T. Muniswamappa Trust, an NGO, Grameen Financial Services adapted the Grameen Bank’s group lending methodology of microfinance to the Indian setting and launched Grameen Koota in Avalahalli, a village in Bangalore (Karnataka).
Grameen Koota steadily groomed a class of mature and financially literate women entrepreneurs, who began to outgrow the group lending model. Anticipating the increased credit requirements of their growing livelihoods, GFS structured an individual lending program – Maarg, which began in May 2008 as a pilot project.
Today, we have transferred from an NGO to a well-regulated and governed NBFC – MFI (Non Banking Financial Company) and have expanded the breadth of offerings under GFS to include a wider variety of financial products and social development services.