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$27 for 42 people: that is how it begins in 1976 in the village of Jobra in Bangladesh. The economist Muhammad Yunus lends the money mainly to women who make bamboo stools. They have nothing a bank would accept as collateral. The experiment grows into a bank with millions of women as customers. Its answer to the question “Whom can you trust?” is worth a look for any team – not least because at one point it contradicts the Team Principle of Reliability. The principle states: teamwork begins where everyone can rely on everyone else without having to check.
A Bank Without Collateral
Situation
The experiment in Jobra becomes a project, and on October 2, 1983, a government ordinance turns it into Grameen Bank, the “village bank.” Its customers have no collateral. Contracts in the usual sense do not exist. About 97% of borrowers are women. In 2006 Muhammad Yunus and Grameen Bank jointly receive the Nobel Peace Prize. In January 2022 the bank counts 9.5 million borrowers and 2,568 branches in more than 81,000 villages.
Connection to the team principle
The bank faces the basic problem of all collaboration: it has to rely on people whose reliability it cannot verify itself. It doesn’t solve this with more paperwork. It hands the question to those who are in a position to know – the women’s neighbors.
Five Women, Two First
Situation
Five borrowers from similar circumstances form a group. First, the group is observed for about a month and introduced to the rules. Then only two of the five receive a loan. Only when these two repay reliably do the others get their turn. If one member fails to pay, the whole group gets no further credit.
Connection to the team principle
Here reliability is built in stages. No one is given trust up front. The first two earn it for themselves and, at the same time, for the three who are waiting. And it works both ways: one woman’s loan depends on the others’ payments. This is the side of the example that supports the principle well. Reliability is not a private matter. Anyone who doesn’t do their part takes something away from the others.
Reliable – but Not Without Watching
Situation
Several groups form a “center.” It meets every week with a bank employee. Installments are paid there openly, in front of everyone. At every meeting the members recite the “Sixteen Decisions” – commitments to discipline, unity, educating their children, hygiene and repaying on time.
Connection to the team principle
Here the example does not bear out the core statement. The groups do not work “without having to check” – quite the opposite. They work because each woman sees what the others are doing. This fits with research that qualifies the principle. Bart A. De Jong and Tom Elfring studied ongoing teams at a tax consultancy: there, trust improved performance through more effort and more mutual monitoring – not less. In 71 self-managing teams of MBA students, Claus W. Langfred found that high trust hurt performance when individuals worked very autonomously and hardly anyone was keeping an eye on anyone else. Both are single studies, not laws. But they suggest that trust doesn’t replace keeping an eye on one another. It makes that watching acceptable. The goal is not that nobody watches anymore. The goal is that nobody has to check up on anyone in order to sleep soundly.
What the Bank Changes and What Critics Say
Situation
From around 2001 the bank introduces a new set of rules, “Grameen II.” By the end of 2003 it applies in all branches. According to Stuart Rutherford and colleagues, this ends the group’s joint liability for individual members’ loans. The groups and weekly meetings remain. The bank itself reports repayment rates of over 98%. That figure is disputed. Critics also report over-indebtedness and group pressure that in some cases is said to have driven people to sell their possessions. Muhammad Yunus leaves the bank’s leadership in 2011; the government cites the mandatory retirement age as the reason. He remains a politically controversial figure to this day. For this article, only the mechanism of the groups matters.
Connection to the team principle
The criticism is part of what makes the example instructive. Keeping an eye on one another can build reliability. It can also tip over into pressure that harms people. That the bank loosened liability but kept the meetings can be read as a hint: what matters is the bond, not the threat. That is an interpretation, not a documented intention of the bank.
Key takeaways
Key Lessons
- Build trust in stages. Give newcomers a manageable task first and widen their scope once they deliver.
- Make commitments – and whether they are kept – visible in your team. A short weekly update is not mistrust; it is the foundation of trust.
- Distinguish watching from checking up. Watching means: we know where each of us stands. Checking up means: I don’t believe you.
- Notice when mutual accountability turns into pressure. If someone isn’t delivering, ask what’s going on before the group drops them.
- Make clear what depends on each person’s contribution. People who know that others depend on them deliver more reliably.
Summary
Grameen Bank relies on people without collateral and, to make that work, builds groups in which reliability grows step by step. This shows one half of the Team Principle of Reliability: each member depends on the others. The example does not fulfill the other half – “without having to check.” At Grameen, people watch, every week and in front of everyone. Read honestly, the example teaches both: reliability grows out of commitments that are visibly kept, again and again. And it has been achieved when the watching remains but the worry is gone.