Grameen Microfinance: An Evaluation of the Successes and Limitations of the Grameen Bank (original) (raw)
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The Nobel Peace Prize to Professor Dr Muhammad Yunus and the concept of Grameen Bank (GB) has refreshed the public's interest in GB and microfinance in general. Looking into the GB model of microfinance, this article argues that there is a need to take stock of the services currently being provided by microfinance institutions (MFIs) for poor clients. The microfinance industry has reached a critical stage in its development, with MFIs focusing on financial sustainability through their credit-driven models, failing to make any significant achievement in poverty alleviation. This paper examines micro-credit's poverty-alleviating ability and argues that microcredit has insurmountable limitations as a model of sustainable poverty alleviation. Developing client-responsive, flexible, and quality financial and non-financial services is imperative now. Thus, the more appropriate and higher the quality of services on offer, the better will be the impact on poverty alleviation.
International Journal of Sustainable Society, 2012
This paper reviews empirical evidence on the common findings from the existing literature on Grameen Bank (GB) microcredit performance on the borrower's poverty alleviation in Bangladesh. We first examine the GB microcredit impact on poverty alleviation with respect to its member's income, consumption, health, children's education and women empowerment. In general, most of the findings from the literature have shown that Bank members are doing well to reduce their vulnerability and to increase income and consumption, health improvement literacy of children and empowerment compared to non-members and controlled groups. However, this paper also examines some criticisms about the effective uses of microcredit rather than commercial mentality for profit making of microfinance institutions (MFIs).
Microcredit and Social Business Movement as Catalyst for Poverty Eradication: The Grameen Experience
INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE AND BUSINESS ADMINISTRATION
Being a country of developing world, Bangladesh has a long-standing history of fighting poverty by means of microcredit. Thanks to the development of group lending approach of Grameen Bank established by Nobel laureate Professor Mohammad Yunus, which has later been widely accepted as an alternative to the traditional collateral based lending in extending credit facilities to the door of hard core poor at affordable terms, Bangladesh has been able to register tremendous success in alleviating poverty. Apart from Bangladesh, Grameen type microcredit programmes are now being replicated in more than 100 countries both in the developing and developed world. At the same time, Grameen has constantly been devising new entrepreneurial solutions to the problems of the poor in the name of social business- a social cause driven, non-loss, non-dividend, self-reliant business dedicated to serve the most pressing needs of the disadvantaged. Muhammad Yunus has been successful to create a global inf...
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As one of the countries in the Global South, Bangladesh has experienced numerous development challenges since its liberation in 1971. Bangladesh has showcased how to fight against poverty and to initiate meaningful change and development in human lives. Nobel Prize (2006) winner Grameen Bank is one of the popular development innovations in the country. Since the beginning of this Bank in the early 1970s, microfinance and entrepreneurship development with small amounts of money have proliferated to nearly every corner of the globe with the paramount goal of alleviating global poverty and ensuring human development. Like all other new social science techniques, the societal revolution brought about by microfinance expansion has left substantial room for refinement and further support by empirical evidence. This article critically evaluates a non-governmental initiative to empower extremely poor women through entrepreneurial microfinance, and examines the socioeconomic impacts in achie...
Journal of Social and Development Sciences
Microcredit is the most effective and successful way to let the poor having access to credit. Research to study its impact on alleviating poverty among the poor is numerous. However, unlike others, our study examines the effectiveness of Grameen Bank and BRAC, the two major micro-financers in alleviating poverty among the most disadvantaged people in Bangladesh. Hitherto, a study of this nature in which two Bangladesh's micro-financers operating in four districts are surveyed and appraised side by side is hardly at one's disposal. As such, this study can be considered as pioneering in its attempt. Our study has revealed the followings: (i) the poor are the direct beneficiary of the existing micro-finance institutions in Bangladesh. Nevertheless, some of them, especially those who have accounts in both banks, are having problem to repay the loans. Therefore, a mechanism has to be devised to limit each person to enjoy one loan at a time. In addition, a high percentage of the poor in Bangladesh is looking forward to making loans from interest-free banks; and, (ii) the services rendered by both micro-financers to the poor are still no better than the conventional banks. In fact, more than 50.0 per cent of the respondents have shown their dissatisfaction with the services extended to them. To address this problem, it is highly recommended for both micro financers to improve their services by way of making it mandatory for their staff to undergo relevant training programs.
Financing the Poor: Can Microcredit Make a Difference? Empirical Observations from Bangladesh
SSRN Electronic Journal, 2008
Over the last three decades microcredit has gained enormous success in reducing poverty on a global scale. As an efficient financial mechanism, microcredit enables various governmental and non-governmental actors to realise the millennium development goals (MDGs). Based on our recent field-research on microfinance in central Bangladesh, this paper empirically examine and analyse the role of microfinance institutions (MFIs) in promoting rural livelihoods in the country. The study reflects on recent arguments against microcredit and shows that despite some criticisms, microfinance is making significant contribution in uplifting the livelihoods of disadvantaged rural communities.