In 1976, Dr Yunus took matters into his own hands under as an Action Research pilot project in “Jobra” village in Chattogram district of Bangladesh, loaning very small sums of money, reportedly equivalent to $27, to 42 local women who needed to buy materials to produce their products. Traditional banks wouldn’t offer loans or lines of credit to people without collateral. But Dr Yunus believed that the very poorest could raise their own small business activity and microcredit and microloans support could address their need.
That concept of Microcredit would lead him toward the beginnings of forming the Grameen bank. Yunus began borrowing money from other banks to make loans to the poor, initially as part of a pilot program that ran from 1976 to 1983.
In 1983, he formally opened the Grameen (Village) Bank, which served as a way to offer microcredit to entry level and subsistence entrepreneurs. This Bank was established under the Grameen Bank Ordinance 1983. As per the Ordinance, the objective of this bank is to provide credit facility to the landless poor people of the rural areas.
The unique feature of Grameen Bank is that no collateral is required to get the credit from the bank. Unlike mainstream commercial banks that bring their clients to their shiny branch premises where the poor are afraid to be trampled, It carries its services to the comfort zone of its clients’ doorsteps. It has inspired the women and the weaker section of the communities to join the Grameen fraternity. All banking transactions except loan disbursement are done in the meetings of the borrowers at the village level centers organized by the center managers.