THE GRAMEEN

BANK

HOUSING

LOAN

PROJECT

BANGLADESHMicro Credit Housing System for the

Landless Rural Poor

CONTEXT

Bangladesh

•2nd poorest country in the world.

•85% (of 11 million population) live in

rural areas.

•60% are landless.

•Per capita income in 2008 was USD520.

(compared to the world average of

USD10,200)

•Health problems ranging from surface

water contamination to arsenic

contamination of ground water.

•Diseases including malaria,

leptospirosis and dengue.

•Prone to natural disaster such as

cyclone, flood and cyclone.

vulnerable community

the house

•Agricultural labors

•Farmers

•Small-scale

trading (informal)

the land

GRAMEEN BANK HOUSING LOAN PROJECT

Purpose

Giving some of the poorest members

of the rural community the means

and materials of improved housing.

Inception

1984

Numbers of Houses Built

59,000 in 13,000 various villages

Success Measure

Recovery rate is close to 100%

Aga Khan Award for Architecture 1989

Nobel Peace Prize 2006

Improved Health

Improved Security

Improved Well-being

“poverty is unnecessary”

Muhammad Yunus, Director of Grameen Bank

GRAMEEN BANK HOUSING LOAN PROJECT

Housing Loan Program

Set up in 1976 to help combat poverty

and problems of the rural landless poor.

•Most often face the greatest difficulty

in surviving

•Typically live in small shelters with

minimum protection

•Vulnerable community and living

under the poverty line

Objective

Provide appropriate financial support and

coordination.

To help the poor and landless to find self-

employment without needing

government’s welfare or assistance.

LIVING CONDITION

FINANCIAL SUPPORT

Grameen Bank

Bangladesh

with support

from the

International

Fund for

Agricultural

Development

Rome

An experimentbased on the belief

that the rurallandless poor can

repay loans,provided that the

terms andconditions are

realistically withintheir reach.

FINANCIAL SYSTEM

Grameen Bank

Loanee #1 Loanee #2 Loanee #3 Loanee #4 Loanee #5

Loan/ Credit with InterestPeer Group Pressure/

Collective Responsibility

(One-year period repayment,

determined by borrower)(Weekly installment of 2%)

Group #1 Group #2 Group #3 Group #4 Group #5

Forming a Center

(Weekly group meeting: the bank goes to them)

NEW HOUSING CONCEPT

RoofMade of corrugatedaluminum forpermanency and easyassembly

RC ColumnsSecure attachmentfor supportingplatforms forvaluables and roof

Main StructureIn the case of seriousland erosion, may belifted out to move thehouse

Land OwnershipIn the borrower’sname and can be

bought with loan fromGrameen Bank

House’s SkinBamboo - material

familiar to work withand easy to transport

(using boat, cart,rickshaw) - coated

with bitumen or paint

Infill StructureTimber rafter, purlin

and lintels- locallyavailable material and

easy to work with

House BaseRaised concrete ormud base to avoidtermite attack andprotection from flood

DRAWINGS

DEVELOPMENT PROCESS

Forming a

group of 5

Training on

Grameen’s

policies

InterviewGive loan to

2 members

Ineligibility of

group until

loan is repaid

Give loan

to other 2

members

Give loan to

last

remaining

person

Mapping Construction Documents Prepare Structural Components

2. Project Implementation

1. Loan Giving

DEVELOPMENT PROCESS

Erection of Main Frames Prepare Wall Panels

Completed Main Structure Prepare Latrines Completed House

Base Construction

PRODUCT AND PROJECT SIGNIFICANCE

The Housing Loan Program of

Grameen Bank made a significant

impact on the lives of its landless

borrowers in terms of restoring

confidence and human dignity.

They can now feel their existence

as human beings. With their new

land and home, they now feel a

strong sense of protection and

endeavor to build a decent life for

themselves.

The program is being seen as an

investment for good health and

well-being for humanity.

LESSON LEARNT

1. Investing some portion of capital, giving

loan to groups of poor people and choosing

appropriate interest rate are crucial for the

implementation of the program.

2. Housing has increased the capacity of the

beneficiaries thus increases the productive

capacity of the community.

3. Understanding of the behavioral aspect of

the community is very important to respond

to their needs.

4. Supports and helps must not be a fully-

funded charity but must be repaid. This is to

ensure progressive development for the

loanees.

5. Poverty must be combated with support, not

charity.

REFERENCES

1. Chandra, D., The Experience of Grameen Bank Housing Program,

Grameen Bank, Dhaka, 1999.

2. Hosseini, N., Breaking The Vicious Cycle of Poverty - Micro Lending,

16th MIT-UAlbany-WPI System Dynamics PhD Colloquium, University at

Albany, New York, 2008.

3. Frampton,K. (et al.), Modernity and Community: Architecture in the

Islamic World, Aga Khan Awards for Architecture, Thames & Hudson,

London, 2001.

4. Karyono, T.H., Seputar Permasalahan Arsitektur Kota Tropis Dunia

Ketiga, Penerbit CV Tehaka Arkita, Jakarta, 2005.

5. www.archnet.org

6. www.grameen-info.org

7. www.muhammadyunus.org