2005 turned out to be a comparatively good year for Grameen Fund (GF) in terms of total revenue and net profit before tax. Out of its two major activities ¬– equity investment and micro-enterprise (ME) lending – the former activity once again recorded no significant change in the year in terms of financial involvement and the number of projects. In the year GF continued its policy of devoting considerable amount of time and energy in supporting, in particular, the existing but struggling equity finance companies instead of going for significantly large equity investment in new projects. This policy appears to be starting to give some results as is evident from the following: shareholders have kindly agreed to provide additional equity to three companies e.g. Grameen Software Ltd., Grameen IT Park Ltd. and Grameen Star Education Ltd. (GSEL). GSEL has formed partnership with Daffodil Computers Ltd. and created a joint venture company by the name of Daffodil Grameen IT Education Ltd. Grameen Capital Management Ltd. has, for the first time, declared dividend for 2005 and Grameen Bitek Ltd. appears still to be on track to declare dividend in 2006. The ME lending program recorded a temporary slowdown during the year due to expiration of the contract with Grameen Babsha Bikash. In 2005, we started a new loan product for the non-members of Grameen Bank having time deposits at Grameen Bank branches.

The Board of GF met three times during the year, reflected on a number of strategic items and provided very useful guidance to the management.

GF continued to receive dividend from Grameen CyberNet Ltd. and Grameen Knitwear Ltd. – two of its equity financed companies. In 2005, a total of Tk. 4.80 million was received as dividend from these two companies – an increase of 34% over 2004. The rate of return from the equity investments was approximately 7.54% for the year under report. The cumulative dividend up to 2005 totaled Tk. 15.83 million. Total investment of GF in various equity ventures stood at Tk. 64.48 million at the end of 2005.

During the year, GF received 350 project proposals for TK. 56.86 million for micro-enterprise lending through the Grameen Bank network. Out of these, 245 projects for TK. 25.75 million were approved and another 56 were kept under active consideration. An amount of TK. 22.09 million was disbursed against 209 projects during the year. A total of 731 (Tk. 68.82 million) micro-enterprise projects completed loan repayment till the end of 2005.

A new loan product called the ‘Time Deposit Loan Scheme’ for non-members of Grameen Bank was started during the fourth quarter of 2005. A total of Tk. 0.69 million was disbursed to some 5 time deposit holders. As the scheme becomes known with the passage of time, we expect better response from the deposit holders in the year ahead.

According to the audited report for 2005, total revenue of the Company stood at Tk. 24.42 million. This reflects an increase by Tk. 2.42 million over the amount in 2004. The total expenditure in 2005 stood at Tk. 20.50 million as against Tk. 21.83 million in 2004. Overall, in 2005, Grameen Fund made a profit of Tk. 3.92 million as against a small profit of Tk. 0.17 million in 2004.

GF is represented in the boards and management committees of nineteen companies including associate companies in the Grameen Family. In 2005, my colleagues and I have participated in several board and management committee meetings of these companies.

GF registered better pre-tax profit in 2005 compared to 2004. In its attempt to explore newer avenues and to further improve performance, GF management has received very useful guidance and support from the Chairman and the members of the Board of Directors. We express our thanks to them for their invaluable contributions. My colleagues and I greatly appreciate the continuous support and cooperation that has been so generously extended to us by Grameen Fund’s business partners. Finally, it is my great pleasure to place on record my deepest thanks to the staff of the GF whose continuing commitment, dedication and productive hard work contributed to the progress of the organization.