Top Executives Meeting with HE Dr. Fatima Al Balooshi, Chairman of Family Bank

Grameen Trust (GT) has successfully transitioned to local management the microcredit operations of the Family Bank in Bahrain. The Family Bank is a microcredit bank licensed by the Central Bank of Bahrain (CBB). It was established in realization of a Memorandum of Understanding (MoU) signed in February 2007 between the Ministry of Social Development (MOSD) of Bahrain, and Grameen Trust of Bangladesh, to provide microcredit to the needy families in Bahrain, a prosperous kingdom in the Middle East. The MoU was signed during the visit of Nobel Laureate Professor Muhammad Yunus to the Kingdom at the invitation of His Highness Shaikh Salman bin Hamad bin Isa Al Khalifa, the Crown Prince and Commander in Chief of Bahrain Defense Forces. During that visit Professor Yunus was given the state Honor by the King by giving the Medal of the First Order of Merit, the highest honor of the Kingdom of Bahrain.

GT conducted a Feasibility Study in the kingdom in May 2007 to develop the microcredit program of the Family Bank. From September to November 2008, GT deputed an expert to provide technical assistance with the establishment of the Family Bank. Two experts from Grameen Trust joined Family Bank in October 2009 as General Manager (GM) and Operations Manager (OM) on a two-year assignment.

The Family Bank was inaugurated by HRH Prince Shaikh Nasser bin Hamad Al Khalifa, the Chairman of the Board of Trustees of the Royal Charities Organization; HE Dr. Fatima Al Balooshi, Minister for Social Development; and Professor Yunus at a ceremony held at the Gulf Hotel Convention Hall in Bahrain on January 14, 2010. The ceremony was held under the patronage of His Majesty King Hamad bin Isa Al Khalifa. The Family Bank disbursed its first loan on January 25, 2010.

The Ministry of Social Development and the Royal Charity Organization owns 63% of the Family Bank. The other shareholders of the Family Bank are Ahli United Bank, Kuwait Finance House, Bank of Bahrain and Kuwait and Ithmaar Bank. Grameen Trust is an implementing partner and has a seat on the Board of Directors of the Family Bank.

During their two-year assignment in Bahrain, the GM and OM set up the microcredit program of the Family Bank, developed financial products adapting the Grameen model to the Shariah compliant products of the Family Bank, helped in recruitment of local staff, facilitated capacity building and skills development of the staff through hands-on training in the operations of a world-class microcredit model, formed groups of borrowers, monitored loan activities, produced manuals, guidelines and documents on operations, products, management, risk, audit, and training, among various other tasks.

Microcredit program of the Family Bank operates following Grameen methodology in organizing the potential clients into groups and centers, in disbursing and recovering loans, in maintaining credit discipline and monitoring. Key challenges faced by the Grameen team in Bahrain were socio economic conditions of Bahrain, low population density, relatively small population categorized as "poor" or "needy", relatively small demand for microcredit as the government graciously provides various safety-net services as a "welfare state", various socio-cultural practices, and adaptation of the Grameen model into Shariah compliance, etc.

The microcredit program of the Family Bank currently offers three products, which are: Mudaraba, Murabaha, and Murabaha by Tawarraq. In future family bank will launch Istisna and Ijara contracts. Besides the microcredit program, the Family Bank also offers financial services to micro-enterprise, individuals, and NGOs, and will offer an array of other financial services.

The Family Bank serves both male and female clients. Currently 65% of the clients are male, while 35% are female. During the two years of operations under direct management of Grameen experts, the microcredit program of the Family Bank formed 108 Groups, in 35 Centers, in 19 geographic Areas of Bahrain. It is noted that each credit-product disbursed to a client by the Family Bank facilitated jobs for at least three persons.

After completion of the two-year term, GT handed over the responsibilities of running the microcredit program to local management on September 30, 2011.

The latest information on the Family Bank is available at the website:
www.familybankbh.com

Report by: Abdul Hai Khan and Tamim Islam