Since meeting with credit unions and banking groups in NorthCarolina a year and a half ago, microlending bank Grameen AmericaInc. has pulled back but not abandoned the idea of pursuing acredit union charter.

The New York-based affiliate of Grameen Bank is known for itsmicro lending programs that help poor people, particularly women,and immigrants start their own businesses. Grameen Bank waslaunched in 1983 in Bangladesh by 2006 Nobel Peace Prize winnerMuhammad Yunus.

In February 2009, Grameen America met with officials from StateEmployees' Credit Union, Self-Help Federal Credit Union, the NorthCarolina Bankers Association and both the North CarolinaCommissioner of Banks and the North Carolina Administrator ofCredit Unions to discuss setting up an affiliate in the Tar Heelstate. All welcomed the bank's concept.

Grameen had previously expressed interest in obtaining a federalcredit union charter in North Carolina. While that plan has notmaterialized, the bank hasn't given up on the idea.

“Pursuing a credit union license is one long-term strategyGrameen America has considered in its ambition to become a largescale microfinance provider in the United States,” said LeslieKane, executive vice president. She confirmed that the bank doesnot have a credit union charter.

John McKechnie, NCUA director of public and congressionalaffairs, said the regulator preliminarily approved Grameen's fieldof membership Aug. 13, 2009, but the agency has not received aformal charter application from the bank yet. The last contactGrameen had with the NCUA was in February when it inquired aboutthe chartering process, McKechnie said.

The Grameen model is based on a peer group lending system,according to its website. Prospective borrowers form or join groupmember groups, which are then organized into centers with up toeight groups to a center. Center meetings take place on a weeklybasis and are facilitated by center managers who are employed byGrameen. The group meetings and Grameen's lending standards promotesuccessful repayment and also provide a forum for financial issuessuch as credit scores, savings and related needs like health andinsurance.

The Grameen loans generally range from $500 to $3,000, which areusually made for a term of one year or six months, have an interestrate of 15%, carry no fees and are typically repaid in weeklyinstallments. Phased disbursement minimizes default exposure whilecreating the proper incentive structure for customers to reach everhigher levels of loan disbursement, according to Grameen. Thebank's principal source of revenue will be the interest paid byborrowers. Grameen said it has a 99.5% repayment rate. Allborrowers are required to open a savings account.

Jim Blaine, president of SECU, previously said the credit unionwould be willing to provide accounting, processing, ATM access andstatement rendering services to Grameen if it secured a charter inNorth Carolina. Blaine said that is still the case.

“We continue to be interested in supporting their efforts,”Blaine said, adding there have been no recent discussions withGrameen. “I believe Grameen may have found that it can work itsmodel without a need for a charter.”

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