Mutual Fund One :
the poor to enter the capital market
Bank has established the 'Grameen Mutual Fund One', a Trust
Fund constituted under the Trust Act 1882 and the Registration Act
1908. Grameen Fund, a venture capital financing company of
the Grameen family, limited by guarantee, will act as the Trustee
of the Fund. The Standard Chartered Bank is the Custodian
and AIMS Bangladesh Limited is the Manager of the Fund.
women from the poor households of the rural areas, who are the target
group of all Grameen Bank initiatives, will be the primary beneficiaries
of the Mutual Fund, according the objectives being set forth in
these deeds and agreements of the Fund.
Bank believes that the quality of life of the poor can be enhanced
inculcating the habit of savings and providing them with opportunities
to invest in suitably structured high-yielding investment vehicles,
which can add value to their wealth over time. The rural population
has limited scope for investing their savings in urban-centered
industrial ventures, mainly due to the small size of the individual
savings and lack of appropriate vehicles of opportunities.
'Grameen Mutual Fund One' will provide the rural poor with a unique
vehicle to lock their savings in attractive investment opportunities,
where the downside risk is well cared for. Simultaneously, the wealth-creating
projects can attract savings from all over the country at a comparatively
low cost. In another way, the Fund should be able to create opportunities
for free flow of capital, through integrating the urban and off-urban
The final size of the first scheme of the Fund is being contemplated
at around Tk 120 to Tk 150 million, depending upon the interest
generated from the Grameen depositors and private placement. Since
Grameen depositors will be the primary beneficiaries, a substantial
portion of the Fund will be earmarked for them. In addition a sizable
amount, will also be offered to institutional investors through
private placement and a portion will be made available to the general
public for subscription under IPO.
Dividend Policy: The first scheme will provide an assured
minimum 10% dividend per annum. This would be the floor limit of
dividend, keeping the ceiling open. Necessary annual cash flow,
to ensure the minimum dividerd, will be ensured under contractual
agreement that will be hedged though long term fixed interest securities
(FIS) investment. The scheme will meet its obligation from the proceeds
of the investment, which will be kept under lien till maturity.
The first scheme will be a closed end mutual fund, i.e., the
scheme will not accept any new capital or redeem existing capital
during its term.
The life of the first scheme will be 10 years.
Policy: The first scheme will invest in both equity and FIS
by way of a balanced investment policy.
value & Market Lot: The face value (FV) and market lot (ML)
will be kept at a low denomination, enabling the small investors
to buy the units.
The closed end scheme will be listed with both Dhaka and Chittagong
Stock Exchanges, as required by the Regulations. The unit holders
of the scheme will have an option to dispose off their holding at
a fair price as and when they desire to liquidate their investment.
The micro-credit borrowers of Grameen Bank are encouraged to save
a small portion regularly. The idea is to create a capital base
for them. The savings currently generate a return of 8.5% for the
depositors. The small savings of the micro-credit borrowers have
now reached an enormous figure of about Tk. 6 billion.
a portion of the savings in the Mutual Fund will provide an assured
minimum dividend of 10% each year to these depositors, which will
act as an old age pension scheme for the poor women.
the Mutual Fund will invest in stocks of different selected companies
with fundamentals, by purchasing units of the scheme, the rural
savers will ultimately be came the owners of the companies in the
for the press released by Grameen Bank, Grameen Fund and AIMS of
Bangladesh Limited; May 09, 2001; Dhaka, Bangladesh.