In any comprehensive work, like this, credit must go to the multitude of people. I am still students and just novice. Hence, I have taken help from different people for preparing my report. Now here is a petite effort to show my deep graduate to those helpful people. First, I commit my selves grateful to Allah for his unlimited kindness and maximum helpful hand in continuing my report preparation. I express my sincere gratitude to honorable supervisor, Ms. Monsura Zaman, ……………… Faculty of Business Administration, ASA University Bangladesh, for their guidance and valuable remark about the convention of the report. I have come to believe, deeply and firmly, that we can create a poverty free world if we want to. I came to this conclusion not as a product of a pious dream, but as a concrete result of experience gained in the work of the Grameen Bank.
It is not micro credit alone which will end poverty. Credit is one door through which people can escape from poverty. Many more doors and windows can be created to facilitate an easy exit. It involves conceptualizing about people differently; it involves designing a new institutional frame work consistent with this new conceptualization.
Grameen bank has taught me two things first our knowledge base about people and their interactions is still very inadequate: second each individual person is very important. Each person has tremendous potential. She or he alone can influence the lives of others within the communities, nations, within and beyond her or his own time.
... girl who goes around clearing the tables. The people who work minimum wage usually fall into three categories. High ... in. The are the students and retired people that want to work as well as the unskilled and ... workers and their families to live above the poverty level They have decided on minimum wage on ... access to bank loans or other forms of credit to purchase homes or get higher education and ...
Background of the Study
Successful human human resource Management 4">resource management makes it possible for the organization to acquire the number and types of people necessary to ensure the continued operation of the organization by the………….. So it acts an important role in HR department. As a part of BBA program, my honorable supervisor, Ms. Monsura Zaman, ……….., assigned me to prepare a report on related topic on Human Resource Management course. I have selected our report topic as “HRM practice in microcredit Sector of Bangladesh (Grameen Bank).”.
The importance of human resources management (HRM) practices to the success or failure of organizational development system performance has, until recently, been generally overlooked. In recent years it has been increasingly recognized that getting HR policy and management. In this paper, I take my theoretical point of departure in recent work in organizational economics on systems of human resource management (HRM) practices. Though this program good balance between theory and practice is gained. Furthermore this is Thesis assignment is a vital requirement for obtaining Masters of Business Administration (MBA) program. I worked Grameen Bank’, how they practice HRM on their microcredit sector. Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history. It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension. In many communities, women lack the highly stable employment histories that traditional lenders tend to require. Many are illiterate, and therefore unable to complete paperwork required to get conventional loans. As of 2009 an estimated 74 million men and women held microloans that totaled US$38 billion. Grameen Bank reports that repayment success rates are between 95 and 98 per cent.
... the management function is accomplished in a centralized department or decentralized throughout the organization, it is a responsibility that is shared by human resource ... of the organization. What this means is that human resource managers must be well-rounded business-minded people who understand the complexities of the business world. ...
Background of HRM:
Human Resource Management is defined as the people who staff and manage organization. It comprises of the functions and principles that are applied to retaining, training, developing, and compensating the employees in organization. It is also applicable to business organizations, such as acting, news presenters and Models etc. Human Resource Management is defined as the set of activities, programs, and functions that are designed to maximize both organizational as well as employee effectiveness. Scope of HRM without a doubt is vast. All the activities of employee, from the time of his entry into an organization until he leaves, come under the horizon of HRM. The divisions included in HRM are Recruitment, Payroll, Performance Management, Training and Development, Retention, Employee Relation, etc.
A human resources management (HRM) professional is responsible for successfully acquiring, developing, motivating, and retaining employees. That is, they are on the “people” side of business operations, and because people do the work of organizations, a company’s success rests heavily on the quality of its HRM. An HRM professional is a full business partner who adds value to business decisions and aligns HR practices with those decisions. The work calls on you to know about compensation and benefits, labor relations laws, how to forecast working needs, organizational learning, and organizational change. Students’ specialty courses include “Competitive HRM Practices,” “Negotiations,” and “Cultural Aspects of International Business.” They also select an honors seminar in “Management of Innovation.” In the classroom and on co-op, students gain the acting base of knowledge and the business expertise that’s needed as an HRM professional. Human resource management is an effective tool for students interested in helping businesses succeed in a changeable personnel environment. This guide is based on Human Resource Management in a Business Context, and includes links to extra articles, notes, tips and exercises.
It introduces you to the essential elements of HRM, its origins and applications. HRM is viewed as an all-embracing term describing a number of distinctive approaches to people management. They help you to understand and evaluate the different and sometimes ambiguous views of human resource management by investigating its origins, explanatory models, technology and practice. Human resource (or personnel) management has in the sense of getting things through people. It’s an essential part of every manager’s responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. “People are our most valuable asset” is a cliché which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain under valued
1.0INTRODUCTIONAs we enter the new millennium more and more companies are recognizing the importance of managing their human resources as effectively as possible. They are also recognizing that doing so, however, cannot be done without recognition and incorporation of the global context. It is virtually impossible to read a business periodical or newspaper anywhere in the world without seeing ...
poorly motivated, and consequently
perform well below their true capability
The rate of change facing organizations has never been greater and organizations must absorb and manage change at a much faster rate than in the past. In order to implement a successful business strategy to face this challenge, organizations, large or small, must ensure that they have the right people capable of delivering the strategy. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’, product/ process/ organization knowledge and experience for new staff members. As organizations vary in size, aims, functions, complexity, construction, the physical nature of their product, and appeal as employers, so do the contributions of human resource management. But, in most the ultimate aim of the function is to: “ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs”, that is, neither overstaffed nor understaffed in total or in respect of any one discipline or work grade. These issues motivate a well thought out human resource management strategy, with the precision and detail of say a marketing strategy. Failure in not having a carefully crafted human resources management strategy, can and probably will lead to failures in the business process itself. Origin of the Report:
This report has been prepared as a requirement of the Thesis program based upon the Grameen Bank where my organization supervisor is Golam Morshed Mohammed (Senior Principal Officer, International Program Dept.), and my institution supervisor is Golam Mahbubul Alam,( Assistant Professor, Department of Business Administration, Stamford University).
... attention and make their loan payments more regularly. The Grameen Bank grants 94 percent of its microcredit to women. Different loan products : Grameen Bank, like any other ... tracks Grameen from its origins as a part of the state-owned bank system in Bangladesh to its role as a major financial organization, with ...
My institute supervisor duly approved the topic decided for doing the report. Since the MBA program is an integrated, practical and theoretical method of learning, the students of this program are required to have practical exposure in any kind of business organization in last term of this course. Scope and Objectives of the Study
A clear objective helps in preparation of well decorated report in which other take the right type of decision. So I identify objective are very much important. Our purpose of preparing the report is: To know the human resource management (HRM) practice of Grameen Bank. To identify the various avenues for improving the HRM policies of Grameen Bank To know about the management ability of Grameen Bank.
Suggesting strategies to improve the HRM policies of Grameen Bank. This study covers the HRM policies of Grameen Bank along with some recommendations to improve the HRM policies of Grameen Bank. Methodology
A sample survey was conducted to collect primary data using two pre-designed survey instruments from concerned groups following an appropriate sample design. In view of the complexities involved in generating quantitative data for assessing the real impact, qualitative data were also collected. In the context of the unique features of the area an attempt was made to identify the strengths, weaknesses, opportunities and threats of the private HRM sector. Data Collection:
This study is mainly based on secondary data available from the various divisions and departments of Grameen Bank, in addition to these other necessary information have been collected from the relevant journals, annual reports of the Grameen bank, website and publications of other relevant institutions have also been taken into consideration. Primary sources of data:
Face to face conversation with the Grameen Bank administrative dept. and International depts. Officers & staffs. Conversation with the clients.
Different’ manuals of Grameen Bank.
Assignment # 41) One of the most important ways a bank can make sure its loans meet regulatory standards and are profitable is by establishing a written loan policy. A loan policy gives loan officers and the bank's management specific guidelines in making some loan decisions and in shaping the over all portfolios of the bank. The following are the most important elements of a Written Loan Policy; ...
Secondary sources of data:
Procedure manual published by the Grameen Bank.
Files and documents of the branch.
Annual report of Grameen Bank.
Different text books.
This data was compiled using information from Grameen Bank branch and centre visits, informal discussions with branch managers, field staff and various management level officers conducted during field and head office visits. Limitations of the Study
As a student of faculty of Business Administration, this is my first initiative for making a report on “HRM Practice in Microcredit sector of Bangladesh: A case study on Grameen Bank”. By meeting with officers, I was really unable to collect enough information from due to their official restrictions. While carry out the study I had to face a few limitations,
which are mentioned below: The main constraint of the study is inadequate access to information. The employees did not disclose much information for the sake of the confidentiality of the organization. Since the bank and other companies personal were very busy, they could provide me very little time. The clients were too busy to provide me much time for interview. The time frame fixed to prepare the study report was hard to be met. As a result, sufficient concentration could be given on it, which was needed for a much better study.
An Overview on Microcredit in Bangladesh
What is Microcredit?
Much of the current interest in microcredit stems from the Microcredit Summit (2-4 February 1997), and the activities that went into organizing the event. The definition of microcredit that was adopted there was: Microcredit: programmers extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families. Definitions defer, of course, from country to country. Some of the defining criteria used include- size – loans are micro, or very small in size target users – microenterpreneurs and low-income households utilization – the use of funds – for income generation, and enterprise development, but also for community use (health/education) etc. terms and conditions – most terms and conditions for microcredit loans are flexible and easy to understand, and suited to the local conditions of the community. Three C’s of Credit
If you " re counting on government student loans to get you through college or graduate school, count on paying them back. The Education Department has become one of the toughest debt collectors around. Over the past decade, the agency has steadily expanded its arsenal for dealing with former students who don't repay. A 1998 change in federal law made it extremely difficult for people to escape ...
Character: means how a person has handled past debt obligations: Form credit history and personal background, honesty and reliability of the borrower to pay credit debts are determined. Capacity: means how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment. Capital: means current available assets of the borrower, such as real estate, savings or investment that could be used to repay debt if income should be unavailable. Microcredit in Bangladesh
Microcredit programs in Bangladesh is implemented by NGOs, Grameen Bank, state-owned commercial banks, private commercial banks, and specialized programs of some ministries of Bangladesh government. In the microfinance sector total loan outstanding is around TK 248 billion (including Grameen Bank TK 72 billion) and savings TK168 billion. The total clients of this sector is 35 million (including 8.4 million clients from Grameen Bank) that accelerates overall economic development process of the country. Credit services of this sector can be categorized into six broad groups: i) general microcredit for small-scale self employment based activities, ii) microenterprise loans, iii) loans for ultra poor, iv) agricultural loans, v) seasonal loans, and vi) loans for disaster management. Loan amounts up to BDT 50,000 are generally considered as microcredit; loans above this amount are considered as microenterprise loans.
LICENSING STATUS OF THE NGO-MFIS IN BANGLADESH
The Microcredit Regulatory Authority (MRA), established by the government in August 2006, received applications from 4241 private institutions (NGO-MFIs).
But, around 1000 applications of them were found to be very small organizations that had fewer than 1000 borrowers or less than the USD 58,000 in outstanding loans that is generally considered as the minimum initial operating portfolio of a single branched MFI to be sustainable. However, till August 2012 the MRA had approved licenses in favor of 651 NGOs. There are another 210 applications are under process for a final decision although they are mostly small organizations but with some potentiality to become viable in course of time. As of August 2012, 3380 applications have been rejected. Recently MRA has invited new applications for obtaining license to conduct microcredit activities.
STATE OF MICROCREDIT IN BANGLADESH
In the backdrop of global ‘double-dip’ recession and over-indebtedness crisis in microcredit sector in several countries, Bangladesh’s microfinance sector shows strong resilience and continues to contribute towards enhancement of macroeconomic growth. Bangladesh microfinance sector is mature now and its assets constitute around 3 percent of GDP in 2011. Total outstanding loan of this sector (only licensed MFIs) has increased by 20.0 percent from BDT 145.0 billion in June 2010 to BDT 173.8 billion in June, 2011 disbursed among 20.7 million poor people, helping them to be self-employed and accelerating overall economic development process of the country. The total savings has also increased by 23.25 percent to BDT 63.3 billion in June 2011 compared to previous year from 26.1 million clients, over 93 percent of them are women.
Table 2 shows the market scenario of NGO-MFIs in Bangladesh. The top three MFIs contribute 54 percent of total loan outstanding as well as savings of the microfinance sector in Bangladesh. Two of the largest MFIs, viz., BRAC & ASA, are each serving over five million borrowers. There are a few more developing fast. On the other hand the smallest 428 NGO-MFIs have contributed only 4 percent of total loan outstanding and 5 percent of total savings. Institutional concentration ratio is highly skewed in favor of large MFIs: just 22 institutions are in control of 76 percent of the market share while three largest organizations have control of over 50 percent in terms of both clients and total financial portfolios.
Table 3 depicts the scenario of micro enterprise loan, i.e., loans above BDT 50,000, of different NGO-MFIs in Bangladesh. It is observed that micro enterprise loan outstanding is BDT 40 billion which is around 24 percent of total loan outstanding in which the top ten NGO-MFIs contributed around 19 percent. It also shows that BDT 40 billion is disbursed to around 6 lakh borrowers which are only 3 percent of total borrowers. The table expresses that only the top NGO-MFIs are capable to run micro enterprise loan.
Selected Indicators of NGO-MFIs in Bangladesh
It is observed from table 4 that savings per member has been increasing over the years. In 2006 savings per member was Tk. 1,207 which stands at Tk.2495 in 2011 – an increase to more than double within the last five years. The loan outstanding per borrower also increased over the years and average growth rate of loan outstanding per borrower is around 17 percent in 2011 compared to the previous year. The loan outstanding per borrower has increased by more than 100 percent within the last five years. These two indicators, savings per member (average saving size) and outstanding loan per borrower (average loan size) increased over time perhaps due to the increase in the income level of the poor resulting in an increase in their need for higher amount of loans from the MFIs.
The ratio between borrowers to clients (members) remained steady for the last few years, which is within 70 to 80 percent and the savings to outstanding loan ratio has also been stable from 2006 to 2011. Since the total number of branches of MFIs has increased at a much higher rate in 2011 compared to the previous year, the number of members and borrowers per branch has decreased. Substantial rate of increase in the sizes of loans per borrower and savings per member has resulted in a rise in the total loan outstanding and savings in the sector. Consequently outstanding loan and saving per branch has also increased. The loan outstanding amount per branch which was TK 8.42 million in 2010 has increased by 14.4 percent in 2011.