GRAMEEN'S SOCIOPOLITICAL CONTEXT When the Grameen Bank started in the early 1970s, Bangladesh was in disarray(confusion) and

anarchy(disorder). The War of Independence of 1971 had shattered previously existing social, political, and economic systems. In such an environment, Professor Yunus, Grameen Bank founder and head, understood the need for firm institutional structures and organizational discipline, and created the Grameen model based on a framework of discipline and trust. The Grameen Bank of Bangladesh is one of the worlds most famous microfinance institutions, serving more than four million borrowers annually and helping 10,000 families escape poverty every month.

From the start, Grameen was an experiment that existed outside the realm of traditional banking. The bank began as a research project, and even when its expansion required institutional relationships with the Bangladesh government's financial institutions, Grameen maintained a high level of autonomy. This insulation from government interference (stipulated in a 1983 ordinance) had a significant impact on Grameens approach to rural credit delivery. It ensured that the rural elite, who dominate state policy, did not retain control in the case of the Grameen Bank. This insulation from elite interference also allowed Grameen to provide credit at market rates, a condition which preserves its financial sustainability.

LOCAL GOVERNMENT IN BANGLADESH Bangladesh's basic unit of political administration is the union parishad. A representative body of roughly 100,000 people, its functions include a range of duties from socioeconomic development to general administration. Successful Grameen replications must modify Grameens systems and practices to suit their own sociopolitical environments and not seek merely to transplant the exact institutional structure and policies of Grameen Bank.

In recent elections, Grameen borrowers and family members captured 6.5 per cent of the total union parishad seats in the country. Considering that one tenth of Bangladesh's families are involved with Grameen this percentage reflects a growing political representation among Grameen members, who constitute the bottom 10 per cent of the countrys economy. Where poor Bangladeshi women previously hesitated to vote due to a long history of political exclusion, Grameen women are now campaigning for and winning local elections. This is partly due to the concerted efforts of the government to promote womens participation and partly due to the empowerment of poor women through the Grameen process.

Anjumanara Begum, a Grameen borrower who had recently been elected to her union

parishad at Dhamrai offered this, Through centre meetings I became aware of the problems of my village. I felt that I should help to solve these problems. She added, After taking loans from Grameen, I had to talk to men in the market when buying or selling poultry and milk cows. I had to deal with men at the bank itself. Now I've learned how to deal with people, both men and women, and I've become known to my centre and village. I'm no longer afraid of speaking out. Grameens incorporation in local political life has ensured that the social, economic and political priorities of its members are heard. This political representation has helped to sustain the institution and is an extremely important factor to consider in any future replication.

CULTURE and POWER in the VILLAGE Grameen has approached rural credit delivery as more than a business and it is instead doing what many Grameen branch managers call a job plus. For instance, Mahsud Hossain, the branch manager in Dhamrai said that part of his job is female empowerment. Grameen has formulated a platform known as the Sixteen Decisions, which includes family planning, sanitation, and basic decorum as a general framework for borrower conduct. The Sixteen Decisions are custom tailored to suit Bangladesh's rural culture. Grameen's position against the tradition of marriage dowries is unequivocal (clear). It is that Grameen members will neither give nor receive dowry. In the banks early days there was concern that Grameen borrowers would take loans to pay directly for their daughters' dowries, which can cost as much as 1500 Taka (equivalent to US $ 23). Peer monitoring through group lending has proved an effective means of screening out such loans. While dowry is still prevalent in most Bangladeshi villages, Grameen's no-tolerance policy is gradually changing villagers perceptions. These examples show that Grameen is acutely aware of its cultural surroundings. The relationship between social development and bank sustainability is mutually reinforcing. For instance, as Grameen expands its borrower base, its social development agenda becomes increasingly powerful. And, as its development agenda takes hold, increased adult literacy, family planning, and diminishing reliance on the dowry system work to strengthen borrowers' ability to pay back loans.