Question : Which of the following is the compelling factor that produced a very high repayment rate of 98% in the concept of lending to groups of poor women, initiated by Dr. Yunus?
Option 1: Involvement of "loan sharks"
Option 2: Removal of the defaulter from the group
Option 3: Joint liability puts social pressure to repay loans
Option 4: Use of the services of aggressive loan recovery agents
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Correct Answer: Joint liability puts social pressure to repay loans
Solution : The correct answer is Joint liability puts social pressure on repayment loans .
Muhammad Yunus surfaced the idea of Grameen Bank in 1976. The sole purpose of this bank was to give out microloans to the poor. Grameen Bank was officially formed in 1983. Banks used to provide loans by joint liability, and borrowers were pressured by society to repay the loans.
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