Grameen Bank's Micro-Credit Model: A Comparative Study With Bangladeshi Commercial Banks' Micro-Credit Performance

Abstract

Micro-credit has been found the most important tool for fighting with poverty through development of income generating activities among the poor, who do not qualify for bank loans under the traditional banking system. In 1983, Grameen Bank in Bangladesh revolutionized a new banking concept on the fact that credit is a basic human right; poor people must qualify for credits despite their financial and social status. At present, Grameen Bank, which mainly targets the rural women, is the most successful micro-credit institution in the world. Commercial banks in Bangladesh have also been engaged in micro-credit programs aimed at poverty alleviation. However, their success rates in these programs seem unsatisfactory. The study is intended to identify success factors of Grameen Bank, and assess the micro-credit programs of Bangladeshi commercial banks.