grameen bank
Grameen Bank: Taking Capitalism to the Poor
Evaristus Mainsah* MBA ’04
Schuyler R. Heuer MBA ’04
Aprajita Kalra MBA/MIA ’04
Columbia Business School
Columbia University School of International and Public Affairs
Qiulin Zhang MPA ’04
Columbia University School of International and Public Affairs
This paper was written as part of the course Emerging Financial Markets taught by David O. Beim, professor of professional practice, at Columbia Business School in fall 2003. The authors are grateful for his invaluable feedback. © 2004 by The Trustees of Columbia University in the City of New York. All rights reserved.
CHAZEN WEB JOURNAL OF INTERNATIONAL BUSINESS SPRING 2004
*
Corresponding author (EMainsah04@gsb.columbia.edu).
www.gsb.columbia.edu/chazenjournal
Executive Summary
In the early 1970s, Professor Muhammad Yunus envisioned a means of alleviating poverty by circumventing the major impediment to lending to the poorest in society—the need for collateral. He tested this instinct in an experiment in 1976, when he lent about $27 to
42 women in an ordinary Bangladeshi village. Just 30 years later, Grameen Bank has more than 3.2 million borrowers (95 percent of whom are women), 1,178 branches, services in
41,000 villages and assets of more than $3 billion.
This paper explores Grameen Bank’s origins, structure, culture, performance and efforts to expand and broaden the microfinance agenda. The authors evaluate Grameen’s success in implementing Yunus’s vision in the light of various challenges and conclude that the short-run effects of microcredit have been positive and that microfinance will continue to make important contributions to poverty reduction. Admittedly, an assessment of
Grameen solely in terms of financial viability—that is, without also taking into account the social benefits in terms of the empowerment of women and its positive impact on human capital—must question whether such an institution will ever
Evaristus Mainsah* MBA ’04
Schuyler R. Heuer MBA ’04
Aprajita Kalra MBA/MIA ’04
Columbia Business School
Columbia University School of International and Public Affairs
Qiulin Zhang MPA ’04
Columbia University School of International and Public Affairs
This paper was written as part of the course Emerging Financial Markets taught by David O. Beim, professor of professional practice, at Columbia Business School in fall 2003. The authors are grateful for his invaluable feedback. © 2004 by The Trustees of Columbia University in the City of New York. All rights reserved.
CHAZEN WEB JOURNAL OF INTERNATIONAL BUSINESS SPRING 2004
*
Corresponding author (EMainsah04@gsb.columbia.edu).
www.gsb.columbia.edu/chazenjournal
Executive Summary
In the early 1970s, Professor Muhammad Yunus envisioned a means of alleviating poverty by circumventing the major impediment to lending to the poorest in society—the need for collateral. He tested this instinct in an experiment in 1976, when he lent about $27 to
42 women in an ordinary Bangladeshi village. Just 30 years later, Grameen Bank has more than 3.2 million borrowers (95 percent of whom are women), 1,178 branches, services in
41,000 villages and assets of more than $3 billion.
This paper explores Grameen Bank’s origins, structure, culture, performance and efforts to expand and broaden the microfinance agenda. The authors evaluate Grameen’s success in implementing Yunus’s vision in the light of various challenges and conclude that the short-run effects of microcredit have been positive and that microfinance will continue to make important contributions to poverty reduction. Admittedly, an assessment of
Grameen solely in terms of financial viability—that is, without also taking into account the social benefits in terms of the empowerment of women and its positive impact on human capital—must question whether such an institution will ever
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