The history of the Grameen Bank is a history of continuous struggle against a system which is blatantly anti-poor, anti-woman, and anti-illiterate. The Housing Programme was no exception.
In 1984, a year after the Grameen Bank was incorporated, the Central Bank of Bangladesh announced that it was introducing a housing loan programme for the rural "people". The commercial banks could borrow from the Central Bank at 2% and lend at 5%. The advertisement invited the commercial banks to apply with the Central Bank and notified the public wanting housing loans to contact their banks for amounts of around 80,000 taka ($ 2,000).
Grameen Bank borrowers and other equally poor people who make up 60 - 70%of the rural population live in dilapidated thatched-roof houses, completely vulnerable to the weather in this rain-soaked country. The slightest drizzle turns the mud floor into a swamp. In the five long months of the monsoon season, the clothes on your back is hardly ever dry and sleeping at night becomes impossible. Medical costs, loss of income due to sickness and the cost of constant repair of the house drive the already extremely poor people deeper and deeper into poverty.
These poor desperately needed housing loans, but the amount they needed to build a basic house was only around 7,000 taka , less than one-tenth of the amount that Central Bank was proposing in its advertisement. On their behalf, Grameen Bank applied to the Central Bank. In Bangladesh, the bureaucracy is notorious for being out of touch with the needs and circumstances of country’s poor. Grameen Bank officials were concerned that their application would not be looked upon with favour. Therefore the request was carefully worded to appeal to common sense.
It was a great disappointment but not a surprise when the application was rejected. Housing experts hired by the Central Bank noted that "whatever you will build with 7,000 taka ($175) cannot be called a house" and that "such little dwellings will not contribute to the housing stock of Bangladesh."
The Grameen Bank re-applied; this time using the word ‘shelter’ instead of ‘house’. A compelling case was made. The application was again rejected. The Central Bank economists objected that Grameen Bank’s mandate is to lend for the purpose of income-generation, while housing loan is a "consumption" loan. Grameen may be able to lend small amounts for one year and recover it in 50 weekly instalments, the poor will not be able to pay a much larger and longer term housing loan.
The Grameen Bank filed the application yet another time, this time explaining that the poor people, specially women who make up 94% of their clientele, work where they live and store their grain, seeds, and tools of trade there. For six months a year they are exposed to rain, so to be able to work they need a sturdy roof. Hence this 7,000 taka ($ 175) housing loan is for them an income-generating loan and not a consumption loan. The application was rejected a third time. No reason was given.
The Grameen Bank has a policy of non-confrontation, and it does not like to bypass the proper channels. Winning an argument does not always serve the long-term interest of the poor. However, in this case the Grameen Bank resorted to an intense behind the scene lobby. Eventually, Professor Yunus took the matter to the Governor of the Central Bank and appealed for his personal intervention. After all, this entire Central Bank rural housing programme was an experiment. No one knew if it would work or not (see Note 1). Finally, in 1984, the Grameen Bank received the funds and the permission to advance a limited number of housing loans on experimental basis (see Note 2) provided the loan size was revised to 15,000 taka from the original ridiculous proposition of 7,000 taka. Subsequently this maximum was raised to 25,000 taka.
2.2 People First !
Before examining this housing programme, it is necessary to first understand the lifestyle of the women in rural Bangladesh for whose benefit the Grameen Housing Programme indeed the entire Grameen programme exists. This is eloquently summarised by Helen Todd in her recent book, ‘Women at the Center’ [Todd, 1996] :
Bangladeshi village women are not isolated in houses like a Western housewife or their
third world middle-class counterpart. They live in a bari. This is a swept earth
courtyard framed into a rough square by houses of close relatives. The houses face inwards
with blank back walls. The houses themselves and short, low walls of jute sticks or banana
leaves define a bari; but they never entirely enclose it. The bari is above
all permeable. Gaps and alleyways, shaded pergolas of beans and marrow vines, easily
connect one bari to another and each bari to the outside. Outside there are
intermediate areas containing haystacks and cowsheds, tube wells and vegetable plots,
where women tend their livestock, gather food and draw water. From here paths lead through
clumps of bamboo and bananas and groves of palms and fruit trees to the ponds, where poor
women wash clothes and bathe themselves and their children. Beyond that is the true ‘outside’
the starkly sunlit, open fields.
The paths and alleyways that link baris to each other are symbols of the social networks
which link the people who live there. In the same bari are usually the houses of a woman’s
husband’s brothers and their wives and families, and his parents, if they are still alive.
Women rarely share a kitchen with their mother or sister in-law. Their nucleus families eat
separately and manage their own budgets. But most of the women’s work is done in the
common courtyard, and the women are together much of the day.
Bari cluster together into a para, or neighbourhood, often separated by
ponds and stretches of open fields. They are loosely based on gusti or lineage
groups, so that neighbourhood bari are related in a widening circle of kin. This is the
group within which the woman is located; enmeshed in networks of protection and social
control, but also mutual help and economic transactions.
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Entrance to a bari. The house in the background belongs to this family of four (husband is not in the picture). Family planning practice among Grameen borrowers is twice the national average. |
- In fact the governor of the Central Bank was sure that "no one
will pay back" (Yunus, 1994:19). The borrower discipline in the People’s Republic of
Bangladesh where until recently the banking system was nationalised, has traditionally
been very poor (10% repayments on industrial loans and 30% repayments on agricultural loans.
See Appendix E).
Back to text - As earlier stated (section 1.3), to date, 376,627 houses have been
built with Grameen’s Housing Loan. Loan repayment is near-perfect. In terms of number of
houses and sustainability, it is the largest and most successful housing programme in the
country. The impact on health and income of the borrowers and their families is so tremendous
that the majority of housing loans are repayed at twice or higher rate than the term of the
loan.
In the next five years, the programme will grow very quickly as Grameen is aiming to enable each and every of its 2.1 million families to have a decent house within the next 5 years.
Back to textOne such critique can be found in an ‘evaluation study’, commissioned by UNDP in 1989, undertaken by two academics and one architect from the Centre for Urban Studies at Dhaka University (Does Bangladesh has a Centre for Rural Studies ?). On page 6 of the report, the authors state:
"All three have considerable experience in housing research and evaluation and have worked earlier as consultants to UNDP, UNCDF, UNCHS and other UN agencies." (Islam, 1989:6)
These recommendations indicate to us that perhaps these academics and architects are either ignorant of the social, cultural and traditional setting in which their own poor, specially the poor women, exist; or they do not mind disrupting the social fabric of poor people’s lives in the interest of pursuing excellence in architecture and economics. Back to text