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Aspects of microfinance system of Grameen Bank of Bangladesh

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  • Islam, Jamal
  • Mohajan, Haradhan
  • Datta, Rajib

Abstract

The microfinance system of Grameen Bank is a revolutionary tool to eradicate poverty of the rural people especially the women of Bangladesh. At present GB is the largest microfinance bank in Bangladesh and probably the biggest microcredit organization in the world. It provides loans to assetless and landless poor people whom no commercial bank give loan. Microcredit is the most useful and popular financial system in the world to face financial crisis of the poor people. Grameen Bank loan distribution has risk of default and sometimes the loans are used even dowry which is crime against women right. The rate of interest in Grameen Bank is very high and due to high interest rate the poor women can not use the loan in a high profitable business to bear this burden, so some of the borrowers lose lands and assets to pay the loan. The paper discusses both advantages and drawbacks of Grameen Bank with mathematical calculations in some details.

Suggested Citation

  • Islam, Jamal & Mohajan, Haradhan & Datta, Rajib, 2012. "Aspects of microfinance system of Grameen Bank of Bangladesh," MPRA Paper 50691, University Library of Munich, Germany, revised 27 Mar 2012.
    • Handle: RePEc:pra:mprapa:50691
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    References listed on IDEAS

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    4. Jain, Pankaj S., 1996. "Managing credit for the rural poor: Lessons from the Grameen Bank," World Development, Elsevier, vol. 24(1), pages 79-89, January.
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    6. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
    7. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    8. Richard Montgomery, 1996. "Disciplining or protecting the poor? Avoiding the social costs of peer pressure in micro-credit schemes," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(2), pages 289-305.
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    10. David Hulme, 2008. "The Story of the Grameen Bank: From Subsidised Microcredit to Market-based Microfinance," Global Development Institute Working Paper Series 6008, GDI, The University of Manchester.
    11. repec:bla:devpol:v:21:y:2003:i::p:357-382 is not listed on IDEAS
    12. Mosley, Paul & Hulme, David, 1998. "Microenterprise finance: Is there a conflict between growth and poverty alleviation?," World Development, Elsevier, vol. 26(5), pages 783-790, May.
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    Cited by:

    1. Mohajan, Haradhan, 2013. "Economic Development of Bangladesh," MPRA Paper 50663, University Library of Munich, Germany, revised 23 Sep 2013.
    2. Mohajan, Devajit & Mohajan, Haradhan, 2022. "Feminism and feminist grounded theory: a comprehensive research analysis," MPRA Paper 114914, University Library of Munich, Germany, revised 15 Jul 2022.
    3. Waqas Ahmad, 2022. "The Role of Islamic Microfinance in Poverty Alleviation: Evidence from Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 4(1), pages 39-49.
    4. Mohajan, Devajit & Mohajan, Haradhan, 2022. "Mathematical Analysis of SEIR Model to Prevent COVID-19 Pandemic," MPRA Paper 115858, University Library of Munich, Germany, revised 25 Aug 2022.

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    More about this item

    Keywords

    Grameen Bank; Microfinance; Joint liability; Loan; Risk of default.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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