---
title: "Grameen Bank: Microfinance Institution | Model Diplomat"
description: "Grameen Bank is a Bangladeshi microfinance institution providing small loans to rural poor, mainly women, through innovative group lending."
url: "https://modeldiplomat.com/learn/glossary/grameen-bank"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Grameen Bank is a Bangladeshi microfinance institution that extends small collateral-free loans to the rural poor, predominantly women, through group-based lending.
- Who founded Grameen Bank and when did it become a formal bank?
- Why is the 2006 Nobel Peace Prize for Grameen Bank often a tricky exam question?
- What makes Grameen Bank's lending model distinctive?
- What is Muhammad Yunus's role in Bangladesh as of 2026?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Grameen Bank is a Bangladeshi microfinance institution that extends small collateral-free loans to the rural poor, predominantly women, through group-based lending.

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In 1976, economist Muhammad Yunus lent USD 27 to 42 villagers in Jobra, Bangladesh—the experiment that grew into Grameen Bank, which won the Nobel Peace Prize jointly with Yunus in 2006.

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[Major Personalities Movements National Institutions](https://modeldiplomat.com/learn/lessons/bcs-bangladesh-affairs-major-personalities-movements-national-institutions)[The Economy In Depth Rmg Remittances Microfinance](https://modeldiplomat.com/learn/lessons/bcs-bangladesh-affairs-the-economy-in-depth-rmg-remittances-microfinance)

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