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Grameen and Microcredit: A Tale of Corporate Success
29 Aug 2009, Muhammad, A.
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Analyzing the success of microfinance in Bangladesh

This paper examines whether the Grameen Bank (GB) model has actually worked in reducing poverty and empowering women.

GB’s microcredit program has been recognised internationally as a successful model. It has earned global attention as a new form of banking and been hailed as an effective tool for alleviating poverty and empowering women. Findings from publications, studies and international experiments of the GB model reveal that:

GB model has been successful in earning high profits and high repayments, but has low scores on indicators related to education and poverty reduction;
Although a large majority of borrowers are women, only ten percent have control over their loans;
Dowry pressure on borrowers has increased after enrolment;
Borrowers have had to take loans from money lenders or sell valuable assets to repay their GB loans;
Very few borrowers have actually used microcredit for economic improvement.

The paper states that although the GB model created a good opportunity for expanding the market for finance capital, it has failed as a tool for poverty alleviation and empowerment of women.

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11 Mar 2010



India

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Publisher(s):
Economic & Political Weekly