Microcredit and Poverty Alleviation: The Grameen Bank in Focus

Tazul Islam
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Tazul Islam: American International University-Bangladesh, Dhaka, Bangladesh.

Journal of Social and Economic Development, 2008, vol. 10, issue 1, 33-49

Abstract: The Nobel Peace Prize to Professor Dr Muhammad Yunus and the concept of Grameen Bank (GB) has refreshed the public’s interest in GB and microfinance in general. Looking into the GB model of microfinance, this article argues that there is a need to take stock of the services currently being provided by microfinance institutions (MFIs) for poor clients. The microfinance industry has reached a critical stage in its development, with MFIs focusing on financial sustainability through their credit-driven models, failing to make any significant achievement in poverty alleviation. This paper examines microcredit’s poverty-alleviating ability and argues that microcredit has insurmountable limitations as a model of sustainable poverty alleviation. Developing client-responsive, flexible, and quality financial and non-financial services is imperative now. Thus, the more appropriate and higher the quality of services on offer, the better will be the impact on poverty alleviation.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:sch:journl:v:10:y:2008:i:1:p:33-49

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