The Observation Deck

"The micro-credit system will play an important role in the recovery process, because people are losing jobs and the banks are not giving loans. The micro-credit system will help in creating self-employment by giving small loans, which in turn will help the economy," says Prof Yunus.

It is a simple idea: give small amounts of credit to poor people to start their own businesses and they repay the loans.

But the bank gives credit to people who have no credit history and no guarantors.

The credit is given solely on trust. And it has been helping millions of poor people eke out a living in Bangladesh for more than three decades now.

Every new borrower has to join a group of five people, who have to meet a bank official every week to discuss money management skills and also make their loan repayments. If one person defaults on a loan, no-one in the group will be eligible for a new loan.

The loans are given at the fixed rate of 15% and the amount ranges from $250 to $3,000. As the loans are repaid, more loans can be taken, up to a limit of $25,000.

The borrowers must also open up a savings account with Grameen America and deposit at least $2 a week to cultivate saving habits. In the first year, about 600 borrowers deposited more than $80,000 in savings accounts.

Many women have benefited from Grameen's lending policy
Although the loans were made only with simple receipts, 99.5% were repaid on time.

These borrowers had no credit history until they came to the Grameen Bank. Now, with the current loan payment practices, they can expect a credit score of 650 or higher within a year. Soon they may be eligible to get loans from mainstream banks in larger amounts.

Now the bank is expanding to other areas in the US. Soon a branch will open in Brooklyn and plans include branches in states such as Nebraska and Ohio.