The year 2001 was a historical year for Grameen Bank. This year it has completed its 25 years of life. It ventured into an unknown path in 1976, equipped only with a determination and total faith in poor people's ability to change their own lives. It has come a long way in these 25 years. More so it has been successful in inspiring many other persons, and organizations to become co-travelers.

2001 was a historical year for another important reason. This was the year of transition from Grameen Bank I to Grameen Bank II the change-over from the classic Grameen operating system to the new operating system which has been named as "Grameen generalised system".

The shift from the classic system to the new system was initiated in 2000 after a thorough preparation which included undertaking many experimen-tations in bits and pieces in previous years. All the disjointed pieces were snugly put together to create a total system, internally consistent and operationally efficient. We strongly feel that Grameen generalised system has created a "micro credit highway" on which borrowers can cruise along safely, confidently with individually determined speed. It allows enterprising borrowers to move faster than others. The new system makes micro credit, for the first time, truly tension-free. It can work equally well both in normal and disaster situations.

The year 2001 was an exciting year for all the 12,000 staff of Grameen Bank. They went through a process of intensive learning process to acquire full understanding of this new operating system. In turn, they had to "sell" the new system to the 2.3 million borrowers to make them accept it enthusiastically and feel comfortable in working with it. Borrowers loved the new features of the new system. Of course, some were more liked than others. The staff worked very hard throughout the year to complete the conversion process within the target date. The new system had to be supported simultaneously by a new monitoring system and a new accounting system. Everything proceeded smoothly and according to schedule.

One immediate impact of the new system was felt on the savings of the borrowers.It started rising steadily. New system also encourages the non-borrowers to put their deposits in Grameen Bank. Looking at the preliminary results, we can safely predict that very soon Grameen Bank will have more in deposits than in its outstanding loans. It is likely to happen by 2003. One thing became very clear in 2001 that Grameen Bank in future will not need to borrow from outside, to carry out its normal credit programme. At the branch level, each branch can look forward to running its operation with its own deposits and even generate a surplus

Monthly deposits to the "pension acocunt" became the most attractive feature of the new system to the borrowers. That also became an important source of deposits for the bank.

Creating "Five Star branches" is now the most exciting challenge for the staff. They loved the idea of creating a Five Star branch, and went right on to earn their "Stars" 'green star' for keeping repayment level at 100 per cent; 'blue star' for earning profit; 'violet star' for having more deposits than the outstanding loans; 'brown' star for ensuring primary education for all the Grameen children; 'red star' for getting 100 per cent of the borrowers out of poverty. Staff has taken up the challenge willingly and got to the task in right earnest, eager to be ahead of his peers in reaching the goal.

2001 has laid the foundation of a new Grameen Bank Grameen Bank II. We believe Grameen Bank II will take microcredit to a new height, and generate more confidence in our common dream to end poverty on this planet.

While we commit ourselves to play a strategic role in bringing that day closer, we are happy to present the detailed information on the working of Grameen Bank during this very inspiring year, 2001.