Tuesday, November 9, 2010

How To Start A Bank

Part of my job description every day is to read and research numerous articles about crowd sourcing and crowd funding. We were sent this link from the BBC World Service on starting a new bank. It's a 25 minute audio broadcast on How To Start A Bank.

Spirits low? Is the Credit Crunch getting you down? It might just be a very good time to start a brand new bank ... unencumbered by the toxic loans and the government bailouts of most of the old ones. Peter Day finds out from the experts how to start a bank ... and also how not to do it

It is fascinating to hear the interview of various players from the world of alternative banking. The price of admission "free" is worth listening to these contributors who include: Andrew Hilton Director - Centre of the Study of Financial Innovation, Muhammad Yunus Founder - Grameen Bank, Brandon Davies Chief Executive Office - dRisk.biz Limited, Lindsay Mackie Consultant - New Economics Foundation, Antony Elliott - Fair Banking Charity, Ian Hatton Senior Regeneration Manager - Essex County Council and Giles Andrews Managing Director - Zopa. I checked out the website for Muhammad Yunus Founder - Grameen Bank and found this Grameen Bank methodology is almost the reverse of the conventional banking methodology. Conventional banking is based on the principle that the more you have, the more you can get. In other words, if you have little or nothing, you get nothing. As a result, more than half the population of the world is deprived of the financial services of the conventional banks. Conventional banking is based on collateral, Grameen system is collateral- free.

Grameen Bank starts with the belief that credit should be accepted as a human right, and builds a system where one who does not possess anything gets the highest priority in getting a loan. Grameen methodology is not based on assessing the material possession of a person, it is based on the potential of a person. Grameen believes that all human beings, including the poorest, are endowed with endless potential.

Conventional banks look at what has already been acquired by a person. Grameen looks at the potential that is waiting to be unleashed in a person. I concur!
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