Aspects of microfinance system of Grameen Bank of Bangladesh

Islam, Jamal and Mohajan, Haradhan and Datta, Rajib (2012): Aspects of microfinance system of Grameen Bank of Bangladesh. Published in: International Journal of Economics and Research , Vol. 3, No. 4 (31 August 2012): pp. 76-96.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Grameen Bank, Microfinance, Joint liability, Loan, Risk of default.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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