Microcredit Summit Update
                            Institutional Action Plans of Grameen Trust Partners




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The Microcredit Summit launched in 1997 a campaign to reach 100 million of the poorest families of the world with credit for self employment, particularly the women of those families, by 2005. Grameen Trust (GT) has pledged that it will reach, through its network of Grameen replicators worldwide, 10 million poorest families by 2005 i.e. one tenth of that goal.

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GT has already sought Institutional Action Plans (IAPs) from its funded partner organizations within its network to set their targets for outreach upto 2005. Sixty eight of the eighty six partner organizations of Grameen Trust have committed to reach, according to their IAPs, approximately 7.4 million poorest families by 2005, if their funding and training requirements are met. In other words, these organizations have the institutional capacity to expand rapidly if the resources are made available.

The IAPs have been developed by the partner organizations themselves. In some cases, organizations have set their ambitious targets which we take as an indication of their commitment. GT believes that the remaining partner organizations and prospective new partners in coming years, will collectively have the capacity to reach the target of 10 million families.

In order to achieve the target, GT envisages providing funding, intensive training on Grameen technology and technical assistance to its partner organizations, as it has been doing in the past. Many of these organizations have not only created training facilities for their own staff, but are also in a position to offer training to the staff of other programs.

At the time of the launch of the microcredit campaign in 1997, Grameen Trust funded partners had reached collectively 134,939 poor families. By April 1999, the number has gone up to 320,187. This number has doubled in just over two years and provides an indication of the exponential rate at which these organizations can grow, if resources can be made available. If we include the outreach of GB replicators who have received training (and not funding) from Grameen Trust, the current number of families already reached exceeds 500,000 poor families.

What is needed?

The US$ 2.2 billion required to meet this target will not necessarily be channeled through Grameen Trust. GT's role will be primarily to identify and provide start up support, both financial and technical, to these partner organizations and assist them to move towards financial and institutional sustainability. These partner organizations will then explore alternative sources of funding, increasingly turning to commercial sources. That this is a realistic strategy is evident from the fact that many of GT partner organizations have diversified their funding source and are already receiving loans from commercial banks. Two of these organizations CARD, Philippines and Nirdhan, Nepal, have already set up their own banks, CARD Bank and Nirdhan Utthan Bank respectively, with the approval of their respective central banks. This reflects the trend towards growing professionalization of their services and efficiency in financial management.

We believe our partners have the leadership, commitment and structures already in place to reach the target of 10 million poorest families with credit for self-employment and income generation by 2005. What is missing currently are institutional links amongst the grassroots level organizations and available global funds. Grameen Trust will advocate on behalf of its partners to create strategic alliances with bilateral and multilateral donors, banks, regulators and other institutions, so that the momentum can be created to achieve the goal. We need to create user-friendly mechanisms to provide funds to microcredit organizations working for the poorest, including the creation of wholesale funds to provide loans to microcredit organizations.