Grameen Bank provides three types of loans: income-generating loans (with an interest rate of 20 percent), housing loans (with an interest rate of 8 percent), and higher education loans for the children of Grameen families (with an interest rate of 5 percent). All interests are simple interest, calculated on a declining balance method. This means that if a borrower takes a loan of 1,000 takas and pays back the entire amount within a year through weekly installments, she’ll pay a total amount of 1,100 takas (i.e., 1,000 takas in principal plus 100 takas as interest for the year).
