For all of us in Grameen Fund (GF), the most stimulating event in 2006 was when our Chairman of the Board of Directors, Professor Muhammad won the Nobel Peace Prize 2006 along with Grameen Bank. It was an occasion that inspired all employees in the Company and gave us the impetus to scale newer heights in quality performance. On behalf of all in GF, we salute, once again, Professor Yunus and Grameen Bank on this historic achievement.

Overall, in 2006, GF witnessed continuance of healthy growth for the company. An important milestone achieved in the year is the emergence of GF from a position of cumulative loss to that of cumulative profit. The growth in revenue in the year was positive while the net profit before tax recorded a slight fall. GF implemented in the year an enhanced compensation package for its employees.

In 2006, GF continued to devote considerable amount of time and energy in assisting its struggling equity financed companies. As I stated last year, this policy has started to give some results. Grameen Capital Management Ltd. has, for the first time, paid dividend. Grameen Bitek Ltd. improved its sales volume and added a new product line. The continuous improvement in the performance of this company has generated interest on it from prospective new investors. This has raised the possibility of investors coming in a big way to invest in the expansion of the company. The micro enterprise (ME) lending program recorded slight improvement in terms of approval and disbursement. The non-members of Grameen Bank having time deposits at the Bank branches have shown increasing interest in 2006 on the new loan product offered on their deposits by GF.

The Board of GF met four times during the year, deliberated on various policy and strategic issues and provided very useful guidance to the management.

As already stated, in 2006, Grameen Capital Management Ltd. has registered its name as dividend payer for the first time. GF also received dividend from Grameen CyberNet Ltd. and Grameen Knitwear Ltd. as usual. In 2006, a total of BDT 5.37 million in cash was received as dividend from these three companies – an increase of about 12% over 2005. The rate of return from the total equity investments was approximately 8.13% for the year under report, recording an increase over last year. The cumulative dividend up to 2006 totaled Tk. 21.20 million. Total investment of GF in various equity ventures stood at Tk. 67.58 million at the end of 2006.

During the year, GF received 353 project proposals for TK. 55.87 million for micro-enterprise lending through the Grameen Bank network. Out of these, 241 projects for TK. 27.80 million were approved and another 55 were kept under active consideration. An amount of TK. 24.99 million was disbursed against 219 projects during the year. Since the beginning of Micro-Enterprise Credit Scheme till the end of 2006, a total of 1099 (Tk. 112.10 million) micro-enterprise projects completed loan repayment.

The new loan product called the ‘Time Deposit Loan Scheme’ for non-members of Grameen Bank was started during the fourth quarter of 2005. A total of Tk. 1.29 million was disbursed in 2006.

According to the audited report for 2006, total revenue of the Company stood at Tk. 24.48 million. This reflects a slight increase over the amount in 2005. The total expenditure in 2006 stood at Tk. 21.18 million as against Tk. 20.50 million in 2005. Grameen Fund made a profit of Tk. 3.30 million in 2006 as against a profit of Tk. 3.92 million in 2005.

GF is represented in the boards and management committees of nineteen companies including associate companies in the Grameen Family. In 2006, we participated in several board and management committee meetings of these companies as usual.

GF has emerged in 2006 as a company in cumulative profit. In its endeavor to search for newer possibilities and to continue to improve performance, guidance and support from the Chairman and the members of the Board of Directors of GF have been very useful. We express our thanks to them for their invaluable contributions. My colleagues and I greatly appreciate the continuous support and cooperation that has been so generously extended to us by Grameen Fund’s business partners. Finally, it is my great pleasure to place on record my deepest thanks to the staff of the GF whose continuing commitment, dedication and productive hard work contributed to the progress of the organization.