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Microbanking began in Bangladesh in 1976 with the Grameen Bank, which now operates successfully in many countries around the world.

Microbanks lend small sums of money, often as little as $125, to people who possess skills and a sound business plan. Due to lack of collateral, these people are unable to secure loans through the traditional banking system. Micro-banks lend money to individual entrepreneurs in groups of five, each member being responsible for their own loan. All 5 members in the group must repay their loans before any one-individual can re-apply for the next level of funding. In this way they use each other as collateral for their loans. This proven method has boasted over a 95% success rate in repayment and flourishing businesses.


Microbanks | How it Works

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