Grameen Trust and Alibaba Group (HKG:1688) To Create Grameen China Initiative
Grameen China's initial focus will be in Sichuan, which is still recovering from a devastating earthquake in May 2008 and Inner Mongolia, with plans to grow to other provinces with the help of additional partners.
In support of this effort, Grameen China will be built and managed by Grameen Trust using the microfinance model pioneered by Grameen Bank and employing Chinese staffers from each region. As Grameen's lead partner in this effort, Alibaba Group is providing initial funding for the creation of Grameen China through a charitable donation of US$5 million. In addition, Alibaba Group will advise in areas like technology-based support to help potential recipients access the program and eventually build their businesses online. Alibaba Group will also help Grameen Trust attract potential supporting partners and other donors to the effort. Grameen China expects to begin making micro-credit loans available as soon as it receives regulatory approval from the authorities.
"We are pleased to join hands with Alibaba Group to create Grameen China and to spread the Grameen Bank Approach to help the poorest people by giving them microcredit to alleviate their poverty through the creation of small businesses," said Nobel Laureate Professor Muhammad Yunus, founder of Grameen Bank and Executive Trustee of Grameen Trust. "Using information technology to help Grameen China grow will help our borrowers establish businesses to support themselves, and perhaps eventually even sell their products internationally which will literally change their lives. If we can make micro-credit available to potential entrepreneurs in China then that will make a big impact for the whole world."
"We are at the beginning of an Internet-driven revolution where small businesses around the world will be able to compete with larger companies for customers like never before," said Jack Ma, founder, chairman and chief executive of Alibaba Group. "Micro-credit is the oxygen to make entrepreneurial dreams come alive. We are very pleased to join with Grameen Trust in this effort to create employment opportunities in these areas by helping tens of millions more small entrepreneurs create their businesses. We also welcome contribution from others and hope to build more partnerships in China."
Although Grameen Trust has been active in China since 1995 supporting many Grameen Bank Replication microcredit programs, this will be the first time that Grameen Trust will directly implement microcredit program in China. Grameen China will be a social business. Initially, it will establish two Grameen Microcredit Companies in Sichuan and Inner Mongolia provinces with multiple branches in each area. The branches will be staffed by local employees recruited, trained and supervised by Grameen microfinance experts. At the initial level of funding, Grameen expects to be able to make loans to more than 8,000 people in Sichuan and Inner Mongolia, with the average loan starting at US$400 per person, and growing to US$4,000 within the first five years of operation. With additional funding partners, the number of loans made will be more than double.
In Sichuan specifically, Grameen's microcredit company will support economic rehabilitation of the victims of the devastating May 2008 major earthquake. Grameen plans that initially the microcredit company 's four branches will serve more than 8,000 Sichuan borrowers within three years, impacting the lives of more than 24,000 people in the province alone.
Professor Yunus began his work in micro-credit when he was a professor of Economics in Bangladesh and took note of the fact that no one was willing to lend to the very poorest of his fellow citizens. So, in 1976, he began to make very small loans to an initial group of 42 people with a total of US$27. Today, Grameen has grown to 7.94 million borrowers, 97 percent of them women, who receive the loans without collateral, legal papers or guarantees. In 2006, Professor Yunus was awarded the Nobel Peace Prize.
Grameen China has already begun to attract additional funders as well, and welcomes more support for this important effort.
About Grameen Bank
Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to create the biggest development wonder." As of July, 2009, it has 7.94 million borrowers, 97 percent of whom are women. With 2,558 branches, GB provides services in 84,573 villages, covering 100 percent of the total villages in Bangladesh.
Grameen Bank's positive impact on its poor and formerly poor borrowers has been documented in many independent studies carried out by external agencies including the World Bank, the International Food Policy Research Institute (IFPRI) and the Bangladesh Institute of Development Studies (BIDS).
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About Alibaba.com Limited
Alibaba Group is a global e-commerce leader and the largest e-commerce company in China. Since it was founded in 1999, Alibaba Group has grown to include the following core businesses: Alibaba.com (HKG:1688), Alibaba Group's flagship company and the world's leading B2B e-commerce company; Taobao, China's largest Internet retail Web site and a one-stop platform for shopping, socializing and information sharing; Alipay, China's leading third-party online payment service; Alibaba Cloud Computing, a developer of advanced data-centric cloud computing services; and China Yahoo!, one of China's leading Internet portals.