GULF Daily News

MORE than 4,000 needy families are set to benefit from a micro finance programme within three years, officials have announced.

The Family Bank, which has come into existence after a pioneering initiative of the Social Development Ministry and Bangladesh's Grameen Bank, will offer loans of between BD150 and BD7,000 to Bahrainis to set up businesses.

Social development Minister Dr Fatima Al Balooshi said 1,500 families and individuals were being targeted in the first year and would be given the loans without the need for providing collateral or a guarantee.

"We are starting small and will expand soon as we go along," she told a Press conference at the Gulf Hotel's Gulf Convention Centre.

Crosshead

It followed the official launch of the bank during a ceremony held under the patronage of His Majesty King Hamad and attended by Bahrain Royal Equestrian and Endurance Federation president Shaikh Nasser bin Hamad Al Khalifa and Grameen Bank founder and Nobel laureate Professor Mohammed Yunus.

"The idea is to make needy and creative Bahraini families self dependent by helping them set up their own businesses," said Dr Al Balooshi.

"The bank will help those families to improve their production and earning, which will relieve them materially and psychologically."

Dr Al Balooshi said the bank was not just a new economic project like the other existing ones, but tried to cater for the psychological and humane side of its clients.

"For this reason, we have started by implanting the psychological and social aspects which will motivate individuals and families and direct them towards free business and self reliance by setting up suitable training programmes," she said.

"We plan to lead customers out of the limited income sphere, which is in line with King Hamad's 2030 economic vision.

"In this context and since the launch of the Bahrain's Economic Vision 2030, the Social Development Ministry has exerted all possible efforts to turn it into reality."

Dr Al Balooshi said the bank would make a big difference in the lives of its clients, as it will adopt an economic enablement policy and not merely a profitability outlook.

"It aims to rehabilitate the individuals comprehensively to enable them to start their own projects and increase earnings," she said.

"The main goal is to strengthen the social security network for both the individual and the community."

The minister added the bank's lending and saving policies were also compatible with Islamic law.

Family Bank general manager Dr Atef El Shabrawy said in keeping with the approach of Grameen Bank it would have an added emphasis on women as its clients.

"All our procedures will be implemented in accordance with the rules of the Grameen Bank but tailored to Bahraini needs," he said.

Dr El Shabrawy said the bank's financial services would be based on the belief that people from low income groups had the skills that can be applied to self-employment ventures if they are given access to capital in the form of credit.

Prof Yunus, an economist and banker who was awarded the Nobel Peace Prize in 2006 for his role in setting up the bank, said his experience in Bangladesh had proved it could be successful in any part of the world.

"We are sure we shall succeed in Bahrain as well and we are not unduly concerned that we may not get repayments," he said.

"This is the story everywhere and we are initially concerned people would not repay but they do because they know they can only keep availing the loans once they repay.

"We even advance loans to people who beg from door to door to encourage them to stop what they are doing and start selling goods door to door."

Crosshead

The loans in Bahrain will be provided in three segments - between BD150 and BD500; between BD500 and BD3,000 and between BD3,000 and BD7,000.

In Bangladesh, Grameen Bank now has eight million borrowers and advances around $1.2 billion (BD453 million) in loans every year.

While the ministry and the Royal Charity Organisation together own a 63 per cent stake in the Family Bank, the remainder is owned by Ahli United Bank, Kuwait Finance House, Bank of Bahrain and Kuwait and Ithmaar Bank.

mandeep@gdn.com.bh