Working with Grameen America

This post was written by first year Duke MBA student Michael Ferguson.

The Grameen Banking Model Comes to America

For over thirty years, the Grameen Bank has earned worldwide acclaim for its service to the poor of Bangladesh.  Founder and Nobel Peace Prize winner Muhammad Yunus and his affiliates have combined a commitment to improving society with unrelenting business acumen to produce an organization that is simultaneously charitable and sustainable.  Through the services of Grameen Bank and the virtues of micro lending, many millions of families in the emerging world have ascended from poverty.

With this incredible success in Bangladesh, the Grameen model was brought to the United States in 2008 to serve the American urban poor. However, micro lending, as a means for poverty alleviation, faces many hurdles in the United States.  Since its founding in New York City, Grameen America has been working towards sustainability, refining their model, and has begun expanding to other locations, including North Carolina.

The presence of the Center for the Advancement of Social Entrepreneurship (CASE) and a wealth of socially minded students made Duke’s Fuqua School of Business an ideal candidate to help continue to refine the Grameen model to meet the sensibilities of the American borrower.  Fortunately, I was selected to be part of the independent study team that sought to create a sustainable business model for this innovative organization here in North Carolina.  Despite some previous leg work, we essentially started with a clean slate, and this created a truly formative learning experience for us.

The Project – without a script, our team excels

As in most team projects, we all have different backgrounds and all saw the project’s objective from a different perspective.  My first inclination was to find a way for this organization to become sustainable and profitable quickly, while my teammates believed it should be a vessel for social change.  Either way, for me, this experience represented a dramatic shift in learning.  In previous classes at Duke, and throughout my academic career, learning has been done in accordance with a syllabus, in a more structured fashion.  This project, however, was completely open ended: there were times where we would have been thrilled to have a better defined script!

But, the absence of a well defined schedule or set of objectives forced us collectively to be more resourceful.  In a way, not only did we have to learn about microfinance, but we had to determine which aspects of it were most germane and would help us complete our report by the end of the semester.  Certainly, there was a limitless universe of information at our disposal, but our client was expecting tangible results, a presentation that surpassed theory and concept to afford them something workable. Microfinance education became secondary in importance to project management; and this was probably the most enduring achievement I’ve had this year.  I’ve enjoyed every minute of classroom education so far, but dealing with a client was almost certainly more applicable to my career than anything I could learn out of a textbook.

The Final Recommendations

Our final recommendations were well received by Grameen America’s staff.  We used rigorous financial analysis and comparisons to competing organizations to formulate our opinions, and our relationship with CASE gave us access to helpful industry insiders, including Duke alumni in the field of community development finance, who were willing to point us in the right direction.  And, as always, having the foundation of a Duke MBA education was invaluable. In the end, we designed a marketing pitch that emphasized the use of a social media campaign, and helped develop a new business format that will allow Grameen America to recruit potential depositors much more easily.