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Grameen Bank now operates through fifteen zonal, three sub-zonal, 123 area, and 1178 branch level offices.

A basic principle of Grameen Bank is that the bank goes to the poor people, since it is difficult for the poor people to come to the bank. All banking transactions are done in the centre meetings at the village level, attended by borrowers and the centre manager who is a bank staff. The branch borrows from the head office whenever it needs funds, at the rate of 4 percent for housing loans (on-lending at the rate of 8 percent) and at the rate of 12 percent for income-generating loans (on-lending at the rate of 20 percent).

At the end of December 2002, the bank, through its 1,178 branches located in 389 upazilas or sub-districts and 60 districts of Bangladesh, was serving 2.48 million members. It had disbursed, by the end of December, 2002, Tk. 169,973.67 million (US$3,811.20 million) as basic loans. Grameen Bank members also deposit in various savings accounts and the balance of their savings stood at about Tk.7,305.08 million. The bank’s services reached 41,636 villages, out of a total of about 68,000 villages in the country.

There was a long period of preparation by the bank staff and management to develop a new flexible loan system that was introduced at the end of 2000. The new system is a more simplified, more customer friendly system that can work equally well both in normal and disaster situations. The Grameen Generalised System, basically has two types of loans, Basic Loan and Flexible Loan. Unlike the old system where all income-generating loans were for one year, in the new system income generating loans can be of any duration mutually agreed between the bank and the borrower. Besides the size of weekly repayments can be also varied according to the pre-negotiated agreements. Eighty five per cent of the borrowers of Grameen Bank have moved from the old system of multiple loans, to the new generalised single loan system by December, 2002.

Basic Loan means hundred per cent repayment and Flexible loan means loans at risk. At the end of 2002, only fifteen per cent of the borrowers were on flexible loans. A borrower facing repayment difficulties can convert her overdue amount into a flexible loan. Flexible loan is not an independent loan. It is only a temporary detour from the basic loan. A borrower will always make efforts to go back to the basic loan. If a borrower fails to repay the basic loan and is unwilling to go into flexible loan, she becomes a willing defaulter. But if she tries and does not succeed, then she becomes an unwilling defaulter. Flexible loan not paid back in two years becomes overdue; 100 per cent provision is made in such a case and in three years, it becomes bad debt and written off.

Grameen also provides housing and higher education loans. A durable shelter is one of the basic requirements to enable people to organize and manage business activities and undertake plans for creative pursuits in the future. The ownership of a house infuses people with a sense of confidence, security and self-respect, to begin dreaming for a better life for herself and her family. A member can borrow up to Tk. 25,000 for constructing a simple tin-roof house at an interest rate of 8 percent to be paid back over a period of ten years. More than 558,000 such houses had been constructed by December 2002. By that time, Tk. 7,687.53 million has been disbursed as housing loan, the average loan size being Tk. 13,775. Our experience shows that, given the opportunity, the poor can provide and pay for decent housing for themselves, when they can generate income through Grameen credit.

In 1997, Grameen Bank introduced the Higher Education Loan programme, in an effort to provide new opportunities for talented children of its borrowers to receive higher education. Children of borrowers who enroll in medical schools, engineering, honors and masters degree programmes, agricultural colleges, textile engineering and other higher education programmes, are eligible to receive financing from this loan window. The loans are intended to cover all expenses incurred by students from the beginning of their respective courses until completion, including admission fees, course fees, required stationery, food and accommodation and other necessary expenses. Until the end of the year, 395 students from various disciplines have so far received loans under this programme.

The new system requires all borrowers with loans above Tk. 8,000 to contribute a minimum of Tk. 50 each month to a pension deposit account and after ten years they receive almost double the amount. Many are coming forward to save under the Grameen Pension Scheme and the balance of savings came to Tk. 7,305.08 million at the end of 2002. Grameen bank is now on a strong financial footing to expand its lending operation without further borrowings from outside.

The new Generalised system is supported by a programme to computerize all branch level accounting and the MIS. New computerized Information Management Centre has been set up in the area office. Now that computer does all the routine paper work, the staff can concentrate more on improving the quality of lives of the borrowers. About 80 per cent of the branches are now computerized. By the end of 2003, it is expected that almost all the branches would be served by the Information Management Centres.

Since many branches are connected by GSM mobile phones, the bank is planning to take the next logical step to integrate the entire information system through the Internet. Already, most of the zones are connected with each other and the head office through an Intranet system.