Jul 8, 2015, 1:55 PM ETFireside Chat, Interview

Muhammad Yunus and Andrea Jung of Grameen Bank: Talks at GS Session Highlights

Professor Muhammad Yunus established Grameen Bank, the only rural bank globally owned entirely by its borrowers, to drive economic development from the bottom up.
In 2014, Andrea Jung assumed leadership at Grameen America, a U.S. operational branch of Grameen Bank that has served over 43,000 women and invested nearly $250 million across 11 cities.
The organization's microfinance model is now active in nearly 60 countries as part of a global movement to eliminate poverty.

Yunus's motivation arose from witnessing extreme poverty in pre-independence Bangladesh, including a famine and the prevalence of loan sharking exploiting the rural poor.
Yunus initially funded loans personally from his own pocket to protect borrowers from loan sharks but ran out of capital within two to three months.
After eight months of persuading traditional banks to lend to the poor—which they refused due to perceived risk—Yunus agreed to act as the personal guarantor for bank loans, marking the formal beginning of the microfinance movement.

Grameen America operates as a social business where first branch opened in 2008; it is the only sustainable branch where interest income offsets operational costs, with profits reinvested into loan capital.
The model utilizes non-recourse, no-collateral loans with a maximum initial amount of $1,500, repaid over a 26-week period.
Borrowers are organized into groups of five who meet weekly, fostering a community discipline that contributes to a 99.6% repayment rate sustained over seven years.
The program successfully converts unbanked women into financially literate citizens; 85% of members secure a second loan cycle, and 90% return for subsequent cycles.
Within six months, members typically open no-fee bank accounts and achieve an average FICO credit score of 670.
In New York City alone, Grameen America has distributed over $230 million toward a $250 million goal, having already served nearly 30,000 of the city's one million women living in poverty.
The organization's goal is to scale from 30,000 to 100,000 members, which would represent 10% of women in the poverty demographic within New York City boroughs.

Yunus has shifted focus to "social businesses," defined as profit-generating enterprises designed to solve social problems rather than maximize personal wealth.
A primary example is Grameen Shakti (Grameen Energy), established 18 years ago to address the lack of electricity for 70% of Bangladesh's population.
Despite initial skepticism regarding the cost of renewable energy, Grameen Shakti now sells over 1,000 solar home systems daily.
Grameen Shakti has equipped more than 1.5 million homes with solar power, contributing to a nationwide total of three million homes powered by solar energy alongside other providers.

Yunus anticipates that poverty and inequality will improve significantly in the United States over the next 15 years, paralleling the Gates Foundation's predictions for developing nations.
The organization views the high penetration of smartphones among U.S. borrowers as a catalyst for leveraging digital and mobile banking to accelerate economic impact.
Forward-looking statements suggest that combining microfinance with technology will have a deep, multiplicative effect on borrowers' families and children's futures.