Chapter 5, A Pilot Project is Born Summary and Analysis

Yunus now has to learn how to run a bank for the poor. He forms Grameen in January 1977 and tries to learn from other loan programs. He decides that requiring large lump-sum payments is psychologically devastating to the borrower who eventually defaults. Yunus decides to avoid this problem by using a daily repayment program, where the borrower repays a little bit at a time. This way they do not really miss the money when they repay it. The borrowed funds have to be fully repaid within a year.

Yunus and his colleagues learn from their mistakes. They constantly change their procedures when they are confronted by a problem. They foster the formation of support groups in which the people can help one another. The group is the entity that approves loan...