Course Code: BUS 498
Course Title: Project Work
Project Report On
“Performance Evaluation of Grameen Bank”
Supervised By
Prof. Dr. Tanbir Ahmed Chowdhury
Dean, Faculty of Business and Economics
East West University
Prepared By
Anika Nawar
Id: 2015-2-10-216
Department of Business Administration
East West University
Date of Submission: 9/04/2019
i
Letter of Transmittal
April 9 ,2019
Prof. Dr. Tanbir Ahmed Chowdhury
Dean,
Faculty of Business and Economics
East West University
Subject: Submission of Project Report on ‘Performance Evaluation of Grameen Bank Limited.
Dear Sir,
I would like to submit the project report, which was done on “Performance Evaluation of Grameen
Bank”. It is a matter of pleasure to submit my project report which was assigned to me as a
fulfillment of the course Bachelor of Business Administration. While making this report I have
gathered many pleasant experience as well as faced some hurdles. Moreover, I have gained many
valuable experiences which will undoubtedly benefit me in the years ahead. This report attempts
to describe my observations, learning’s and experienced gained about Grameen Bank’s
performance and micro finance. Despite the several constraints, I gave my all efforts to make this
report a meaning one. I have tried sincerely to comprehend and translate my knowledge in writing
this report. My effort will be rewarded only if it adds value to the research literature. I enjoyed this
project work and gladly attend any of you call to clarify on my point, if necessary.
Sincerely,
—————————–
Anika Nawar
ID-2015-2-10-216
ii
Acknowledgment
At the very beginning, I would like to convey my sincere appreciation to almighty Allah for giving
me the strength and the ability to finish project report within prescribed time.
I am truly gratified that I received the regulation and assistance of my project supervisor in the
preparation of the project report on “Performance Evaluation of Grameen Bank ”. For this reason,
I especially appreciate my praiseworthy project supervisor, Professor Dr. Tanbir Ahmed
Chowdhury, for his constant effort in providing valuable knowledge and suggestions which
enabled me to produce a proper report. Without his instruction, this report could not be possible
to prepare.
In addition, I am thankful for the help and assistance of various people who helped me while
working on this report. Appreciation from different people has helped me to present a satisfactory
report. At the event of the report submission I sincerely remember all of them .
iii
Executive summary :
The one of the pioneer of micro finance in Bangladesh is Grameen Bank. The establishment of
this micro finance institution brought a new era in the economy of the country which make ensures
that from all classes of the society can get the opportunity to have financing to running their
business. The banking is trying to perform at fullest to grab more customers. The main focus of
this report is to analysis the performance of Grameen Bank as well as to have broad discussion of
micro finance basics. During the discussion of microfinance we came to know about what actually
microfinance is and the history of micro finance in Bangladesh. In further discussion we discuss
about Grameen Bank’s history and loan activities. From this discussion we get to know the fact
that most of the loan activities of Grameen Bank has been made by thinking about the poor classes
of our society and the most popular among all the loan is micro enterprise loan. Two of the
important topic is discussed here also which is credit delivery system and credit lending model of
Grameen Bank. From the main focus of m yreport performance evaluation based on several factors
I have found that being a microfinance institution Grameen bank is performing really well.
Basically this bank is a bank for poor and relentlessly working for them , but they need to follow
more regulations to ensure the proper financing opportunity for those who actually need this.
iv
Table of Contents
Chapter 1 : ………………………………………………………………………………………………………………………………… 1
Introduction ………………………………………………………………………………………………………………………………. 1
1.1. An Overview of Grameen Bank ……………………………………………………………………………………. 1
1.2. Objective of the study ………………………………………………………………………………………………….. 2
1.3. Methodology of the study …………………………………………………………………………………………….. 2
1.4. Scope of the Study ……………………………………………………………………………………………………….. 2
1.5. Limitations of the Study …………………………………………………………………………………………………… 3
Chapter 2 : ………………………………………………………………………………………………………………………………… 4
Literature review ………………………………………………………………………………………………………………………. 4
CHAPTER 3 ……………………………………………………………………………………………………………………………… 8
COMPANY PROFILE: ……………………………………………………………………………………………………………… 8
3.1.HISTORY OF GRAMEEN BANK: …………………………………………………………………………………… 8
3.2.Special features of Grameen Bank …………………………………………………………………………………… 12
3.3.ACTIVITIES OF GRAMEEN BANK ……………………………………………………………………………… 17
Chapter 4 ………………………………………………………………………………………………………………..………………. 26
Grameen bank and micro finance: ……………………………………………………………………………………………. 26
4.1.An overview of micro finance: …………………………………………………………………………………………. 26
4.2.An overview of microfinance in Bangladesh: ………………………………………………………………………. 30
4.3.Grameen Bank’s link with Micro credit …………………………..………………………………………………. 33
4.4.Grameen Bank’s credit lending model ……………………………………………………………………………… 35
4.5. Grameen Bank’s credit delivery system ………………………………………………………………………….. 38
Chapter 5 ………………………………………………………………………………………………………………..………………. 40
Appraisal of financial performance of Grameen Bank ………………………………………………………………. 40
5.1. Authorized Capital: ……………………………………………………………………………………………………….. 40
5.2. Paid up capital: ……………………………………………………………………………………………………………… 41
5.3. Deposit: …………………………………………………………………………………………………………………………. 41
5.4.Total assets: ……………………………………………………………………………………………………………………. 42
5.5.Investments:……………………………………………………………………………………………………………………. 43
5.6.Loans and advances: ……………………………………………………………………………………………………….. 44
5.7.Net income: …………………………………………………………………………………………………………………….. 45
5.8.Net interest income: ………………………………………………………………………………………………………… 46
5.9.Net non-interest income: …………………………………………………………………………………………………. 47
v
5.10.Net profit: …………………………………………………………………………………………………………………….. 48
5.11. Debt equity ratio: …………………………………………………………………………………………………………. 49
5.12. Return on total assets (ROA): ……………………………………………………………………………………….. 50
5.13. Return on equity (ROE): ………………………………………………………………………………………………. 51
Chapter 6: ……………………………………………………………………………………………………………………………….. 52
Findings: …………………………………………………………………………………………………………………………………. 52
Chapter 7: ……………………………………………………………………………………………………………………………….. 53
Recommendations and conclusion: …………………………………………………………………………………………… 53
7.1. Recommendations: …………………………………………………………………………………………………………. 53
7.2..Conclusion: ……………………………………………………………………………………………………………………. 54
Chapter 8: ……………………………………………………………………………………………………………………………….. 55
References:………………………………………………………………………………………………………………………………. 55
vi
LIST OF FIGURE:
Figure 1: TOTAL NO OF MEMBERS IN GRAMEEN BANK :Source : Annual report of Grameen Bank
(2017-2013)………………………………………………………………………………………………………………………………. 10
Figure 2: PERCANTAGE OF FEMALE MEMBERS; Source : Annual report of Grameen Bank (2017-
2013) ………………………………………………………………………………………………………………..……………………… 11
Figure 3: NO OF VILLAGES COVERED BY GRAMEEN BANK (Source : Annual report of Grameen
Bank (2017-2013)) …………………………………………………………………………………………………………………….. 12
Figure 4: BASIC LOAN AMOUNT ;Source : Annual report of Grameen Bank (2017-2013) ……………… 18
Figure 5:FEXIBLE LOAN AMOUNT Source : Annual report of Grameen Bank (2017-2013) …………… 19
Figure 6:HOUSINFG LOAN AMOUNT Source : Annual report of Grameen Bank (2017-2013) ………… 20
Figure 7:EDUCATION LOAN AMOUNT: Source : Annual report of Grameen Bank (2017-2013) ……. 21
Figure 8:MICRO ENTERPRISE LOAN ,Source : Annual report of Grameen Bank (2017-2013) ……….. 23
vii
LIST OF TABLES:
Table 1:BASIC INFORMATION ABOUT GB[ Source: Grameen Bank Website(2019)]………………. 1
Table 2:NUMBER OF BRANCHES[ Source : Annual report of Grameen Bank (2017-2013)} ……. 11
Table 3:TOTAL AMOUNT OF LOAN TAKEN BY MEMBERS [Source : Annual report of
Grameen Bank (2017-2013)] …………………………………………………………………………………………………….. 14
Table 4:CUSTOMER EVALUTION TABLE Source : Annual report of Grameen Bank (2017) …. 15
Table 5:TYPES OF LOANS Source : Annual report of Grameen Bank (2017-2013) ………………….. 17
Table 6: DISBURSEMENT OF MICRO ENTERPRISE LOAN, Source : Annual report of
Grameen Bank (2017-2013)………………………………………………………………………………………………………. 22
Table 7:CLASSIFICATION OF MICROCREDIT ,Source: Grameen Bank Website(2019) ………………………….. 27
Table 8:STATUS OF MICROFIANCE INSTITUTIONS IN BD …………………………………………………….. 32
Table 9:FEATURES OF GB CEDIT DELIVERY SYSTEM Source: Grameen Bank
Website(2019) ……………………………………………………………………………………………………………… 39
Table 10:AUTHORIZED CAPITAL ………………………………………………………………………………………… 40
Table 11:PAID UP CAPITAL …………………………………………………………………………………………………….. 41
Table 12:DEPOSIT ……………………………………………………………………………………………………………………. 42
Table 13:TOTAL ASSET …………………………………………………………………………………………………………… 42
Table 14:INVESTMENTS ………………………………………………………………………………………………………….. 43
Table 15:LOANS AND ADVANCES ………………………………………………………………………………………….. 44
Table 16:NET INCOME …………………………………………………………………………………………………………….. 45
Table 17:NET INTEREST ICOME ……………………………………………………………………………………………… 46
Table 18:NET NON INTEREST INCOME ………………………………………………………………………………. 47
Table 19:NET PROFIT ………………………………………………………………………………………………………………. 48
Table 20:DEBT EQUITY RATIO ……………………………………………………………………………………………….. 49
Table 21:RETURN ON ASSET ………………………………………………………………………………………………… 50
Table 22: RETURN ON EQUITY …………………………………………………………………………………………….. 51
1
Chapter 1 :
Introduction
1.1. An Overview of Grameen Bank
In the microfinance sector in Bangladesh, Grameen Bank is an inevitable name. It has now become
a global organization. The popularity of the bank is for providing banking system based on mutual
trust. Grameen Bank, is founded by economist Muhammad Yunus as a means of providing small
loans to poor individuals (see microcredit). For this extraordinary initiative Grameen and Yunus
were awarded the Nobel Prize for Peace in the year of 2016.it became an independent bank in 1983
with a headquarter in Dhaka, Bangladesh. The most attractive feature of the bank is , it taught the
rural women to become independent as a result more than 97 percent of Grameen’s loan recipients
have been women. The bank is now expanding into wealthy countries, as well.
Table 1:BASIC INFORMATION ABOUT GB[ Source: Grameen Bank Website(2019)]
Industry
Founded
Founder
Headquarters
Number of locations
Authorized capital
Paid up capital
Products
Revenue
Number of employees
Website
2
1.2. Objective of the study
To complete the BBA in East West University the completion of a project work is must. This
project work helps the student to apply their theoretical knowledge in practical field. Hence, this
report was assigned to me by my supervisor Prof. Dr. Tanbir Ahmed Chowdhury as a part of
BUS498 course.
The objectives of the report are-
• An elaborate discussion about microfinance services
• The situation of microfinance in Bangladesh
• A discussion on Grameen Bank activities and services
• Performance appraisal of Grameen Bank
1.3. Methodology of the study
Methodology of any study is basically reflects based on which data source the report has made. In
this report, decisions and calculations have been made based on past experiences and the available
data of past activities. It has been made solely depending on secondary data sources and for
presenting the analysis some descriptive statistics tool such as ratios, percentages, formulas and
graph have been used. The sources of data and information are-
• Website of GB
• Annual Reports Published by GB
• Daily Newspapers, journals and books & various write up of Economic & Business
• Research Library
• Various books, articles, compilations.
1.4. Scope of the Study
The main focus of the study is “Performance Evaluation of Grameen Bank “. The report has also
tried to cover the scenario of Grameen Bank, overview of GB, their operations, objectives etc. .
Along with that there is board discussion and microfinance and its recent activities. The report
3
specially covered the performance from year 2013-2017. The data comparison was based on
published information and an additional survey was performed to get in-depth information.
1.5. Limitations of the Study
Any report cannot be completed without any limitation and there is no exception here also. For
instance-
• As it is a project report, the limitations regarding the BBA program has acted as the
limitations of the study.
• Time constraint also works as an obstacle for doing a better analysis.
• The project report has been prepared by only focusing on the secondary data which was
not enough to complete the report and provide the reader a clear idea about the performance
of GB.
Chapter 2 :
Literature review
Microfinance is getting popularity day by day because it is one of the important way to provide
financial service to those who are financially unestablished. Its basic performance is to reduce
poverty by providing social capital. In ,“Microfinance Performance and Social Capital: A
Cross-Country Analysis” Postelnicu and Hermes (2016) founded under what conditions
microfinance institutions (MFIs) are able to reduce poverty by investigating the relationship
between social capital formation is facilitated within different societies and the financial and social
performance of MFIs. It is found that microfinance is more successful, both in terms of their
financial and social objectives, in societies. But to reach the highest peak of the industry before
providing service in the MFIs need to understand the market structure. From “Market Structure
and Borrower Welfare in Microfinance” Quidt, Fetzer, and Ghatak (2013) we can find analysis
of borrower welfare under different market structures, considering non-profit lender, a for-profit
monopolist, and a competitive credit market. The findings suggest that market power can have
effects on borrower welfare and profit lenders are less likely to use joint liability than non-profits.