Grameen Bank, the Bangladesh-based organization known for providing small loans in poverty-stricken rural areas, is planning to open a branch in Japan next summer, sources said Saturday.
Grameen Japan will focus on helping people in need of financial aid such as those receiving welfare benefits and struggling single mothers as they look for work opportunities.
Founder and Nobel laureate Muhammad Yunus visited Japan in February and agreed to set up the branch with Meiji Gakuin University professor Masahiro Kan, an expert in microfinance who has previously worked at the World Bank. A preparatory body was created last month to work out details.
“One out of six people, or 20 million people, live under the poverty line in Japan,” said Kan, referring to the minimum level of income adequate to live in the country and underscoring the need for the system — which started in developing economies — in one of the world’s wealthiest countries.
The branch will follow Grameen Bank’s system of pushing borrowers to repay loans on time by having them form five-person groups in which tardiness will make it difficult for others in the group to borrow, while punctuality could be rewarded with bigger loans.
Borrowers are expected to be able to receive low-interest, collateral-free loans of up to ¥200,000 ($1,800) for six months to a year.
Weekly “center meetings” will be held where current and future borrowers can learn about finance and receive advice on employment and entrepreneurship.
Founded by Yunus in 1983, Grameen Bank — which means “village bank” — works to help people bring themselves out of poverty by giving them business opportunities through microfinance and encouraging saving.
The bank places particular focus on women, who make up 97 percent of borrowers. Its methods are applied in 58 countries, including the United States, Canada, France and the Netherlands, according to its website.
Yunus and the bank were awarded the Nobel Peace Prize in 2006 for “efforts to create economic and social development from below.”