The Diffusion of Grameen Bank in Bangladesh

Abstract

Despite many decades of efforts to alleviate rural poverty, the number of rural poor in developing countries is steadily rising. Amid the general gloom and doom of failed poverty-focused programs, one bright spot is the experience of the Grameen (rural) Bank in Bangladesh. The Grameen Bank represents a radical institutional innovation because it provides collateral-free loans and various social services to poor Bangladeshis yet maintains a loan recovery rate of 98 percent. Founded as an action research project in 1976, the Grameen Bank has diffused to 50 of Bangladesh's 64 districts. The bank now has over one million members, 92 percent of whom are women. Over the past 16 years, the Grameen Bank has created a formidable knowledge base and expertise to combat rural poverty. The present article investigates the process through which this new knowledge base was created, and how it has diffused in Bangladesh to alleviate poverty.

Harnessing the Hidden Enterprise Culture: the Street UK Community Development Finance Initiative

“…Depicting the undeclared economy as, in part, a micro-enterprise sector in need of support appeals to values across the political spectrum (Goodin et al, 1999). For economic conservatives on the political right, it raises sentiments of individualism, appealing to long-held values of self-help, entrepreneurial spirit and pulling oneself up by one's bootstraps (Arnold, 1941;Auwal & Singhal, 1992). Social democrats, meanwhile, admire the integrative function of such an approach in its offer of opportunities for deprived populations to participate more fully and actively in the formal sphere (Anthony, 1996(Anthony, , 1997Balkin, 1989;Desai, 2002;Ehlers & Main, 1998), whilst for green and bottom-up advocates, it facilitates a greening of capitalism by fostering a vision of local micro-enterprise development to challenge or at least balance corporate domination (e.g.…”

“…Until now, evaluations of CDFIs in advanced economies have, on the whole, been positive. They are found to be effective at promoting business growth, creating jobs and increasing clients' incomes, self-esteem and community involvement (Anthony, 1997;Auwal & Singhal, 1992;Balkin, 1989;Clark et al, 1999;Edgcomb et al, 1996;Himes & Servon, 1998;Light & Pham, 1998;Servon, 1999) as well as helping smooth the transition from unemployment to self-employment (Balkin, 1989). So far, however, whether CDFIs are effective at helping fledgling micro-enterprises start-up on a formal footing and existing undeclared micro-enterprises make the transition to the legitimate realm has not been directly evaluated.…”