Grameen Research Articles

SOCIO-ECONOMIC EFFECTS OF MICROFINANCE OF GRAMEEN BANK ON BORROWER HOUSEHOLDS IN BOGRA DISTRICT OF BANGLADESH

The study is an attempt to examine the socio-economic effects of microfinance of Grameen Bank (GB) on borrower households in the study area. It investigates socio-economic changes occurred among the borrower households in the reference time period. In this regard this study collects required information from 168 respondents in the study area using a structured questionnaire. The collected data were analyzed by using statistical techniques such as descriptive statistics, ANOVA test, Participation Impact Score (PIS) and Standardized Participation Impact Score (SPIS). The ANOVA test is performed to examine the association between microcredit and various socio-economic factors of borrower households and GB’s loan amount. Analysis of the study show that average monthly income, average monthly expenditure, total savings, asset value and other socio-economic status of borrower households increased after joining the groups of Grameen Bank (GB). The results of PIS or SPIS indicate that ‘improved participation in family decision-making’ received the highest score among selected 16 items impacts areas while ‘increased counting ability’ bears the lowest score. In spite of some barriers of GB’s microcredit, it has a positive contribution on socio-economic status of the borrower households in terms of increased income generation and improved livelihood of the borrower households.

Tensions and Risks of Social Enterprises’ Scaling Strategies: The Case of Microfinance Institutions in China

The scale-up of social enterprises is usually assumed to bring positive social change. Yet, the negative side, particularly the tensions and risks, in the scaling process is largely ignored. This research aims to explore the tensions and risks related to different scaling strategies. Based on a comparative case study on two leading Chinese microfinance institutions – Grameen China and CFPA Microfinance – that both adopt the Grameen Bank model, this research draws on the lens of institutional logics to understand the microfoundations of five types of tensions and three kinds of risks in the scaling process of the two microfinance institutions. This research provides an integrative framework that captures the nuanced sources, forms and challenges in the scaling of social enterprises.

Impact of Grameen Bank Microcredit on Standard of Living in Rural Poor Women in Sariakandi Upazila of Bogra District

The standard of living in many developing countries like Bangladesh especially rural area is not standard level or satisfied. The microcredit programs of Grameen Bank (GB) in Bangladesh have emerged as a strategy on standard of living and reduction poverty. They are also trying to remove poverty and unemployment and energetic poor people who want to engage in economic activities, the institution provides not only loan to them but also advice and monitoring. The aim of the study is to explore the impact of GB microcredit on standard of living of rural women in study area whom have already involved in its loan. As sample only 198 current microcredit fund receiver’s respondents from Sariakandi upazila under Bogra district were selected. Data were collected from six centers under two selected branches using questionnaire. Data were explained normally under descriptive method using simple statistical tools such as chi-square test and One-way ANOVA test and econometric model such as OLS regression. After analyzing data, results of the study show that there has a positive effect on savings, average monthly income, expenditure, average level of education of borrowers’ households, number of income earner and asset. The results of One-way ANOVA test indicate that there exists a significant relationship among some factors of standard of living with amount of loan of GB and Chi-square test is proved that microcredit of GB has also a positive contribution on improving standard of living in study area.

Participation in Self-Help Groups and Empowerment of Women: A Structural Model Analysis

Microfinance as a tool for poverty alleviation has attracted much attention especially after Grameen Bank of Bangladesh was awarded the Noble peace prize. Self-help groups (SHGs) in India, which originated during the same time as Grameen Bank, are considered to be an efficient mechanism for delivering microfinance to the poor. Apart from providing economic benefits, participation in SHG also brings for its members social and political empowerment. This paper examines the impact of the level of participation in SHGs on the empowerment (economic, social and political) of women SHG members. The study also investigates the impact of moderating variables, such as socio-economic status, age, and place of residence, on the relationship between the level of participation and empowerment. As we were unable to find suitable scales in the existing literature to measure the level of participation, empowerment (economic, social and political) and socio-economic status, we developed new scales to measure these constructs. Using an interview schedule in a survey method, we interviewed 353 women SHG members from the eastern Indian state of Odisha to collect primary data. Using partial least squares structural equation modeling (PLS-SEM), the study explicates the relationship between level of participation and women empowerment. The findings suggest that an increased level of participation in SHGs results in enhanced economic empowerment of its members by bringing in employment opportunities, higher income, stability in current jobs, and improved entrepreneurial abilities. Besides, higher participation also brings in higher social empowerment of members in the form of decision-making capability in households, access to health care, selfconfidence, heightened self-esteem, communication skills, and the ability to transact with banks and NGOs. In addition, increased participation in SHGs leads to higher political empowerment in the form of higher political participation and better community mobilization. Socio-economic status and place of operation significantly moderate the effect of the level of participation on women (SHG member) empowerment. Insights from this study are helpful for the government and non-government agencies working towards empowering women in developing regions. They may take note of the different indicators of participation and role of the significant moderators while implementing similar programs.

Agency, empowerment and intra-household gender relations in Bangladesh: Does market-oriented microcredit contribute?

ABSTRACTThis article seeks to probe the influence of microcredit on the development of agency and empowerment of poor women in rural Bangladesh. The study was conducted on the clients of two leading NGOs—Grameen Bank (GB) and Bangladesh Rural Advancement Committee (BRAC)—in Bangladesh. The qualitative findings of the ethnographic study confirmed that poor women’s involvement in microcredit programs does not contribute to the development of their agency and empowerment in a transformative sense due to structural problems in the programs and the patriarchal social structure of Bangladesh. It is true that microcredit has increased the mobility of women through group networks and organizations, but it has not added to their broader empowerment by easing their access to market transactions, unlike their male counterparts. An overwhelming majority of women do not have control over loans and credit-driven activities, although repayment responsibility rests entirely with them. In some instances, microcredit leads to spousal conflicts regarding repayments. Therefore, microcredit has not been very effective in promoting rational economic choices by women that would lead to their empowerment in the true sense of the term.

ECONOMIC EMPOWERMENT OF POOR WOMEN WITH GRAMEEN BANK PATTERNS ON BAITUL MAL WA TAMWIL IBADURRAHMAN

The purpose of this research is to analyze the contribution of Islamic microfinance with Grameen Bank pattern to economic empowerment and poverty alleviation to BMT Ibadurrahman members. This study uses a quantitative approach. Primary data collection techniques using a questionnaire. While secondary data comes from BMT annual reports (Baitul Mal wa Tamwil), journals, and other related literature. The sampling technique used is purposive sampling. The number of samples used were 100 female poor respondents of BMT Ibadurrahman members. The analysis technique used is the Spearman correlation. This study concludes that Islamic microfinance with the Grameen Bank pattern has a positive contribution to the economic empowerment of poor women. Financial capital and social capital are the keys to success in empowering the poor. Islamic microfinance with the Grameen pattern also has a significant relationship with poverty alleviation. This research also proves that poverty can be overcome if economic development is based on human development.

THE ROLE OF COOPERATIVES IN THE SMES EMPOWERMENT IN RURAL AREAS

Purpose: This study aims to analyze the role of Mitra Dhuafa Cooperative in Gemolong Sub-district of Sragen, Indonesia, in empowering rural microenterprise, and to analyze its success rate by measuring the correlation between micro financing and the level of capability, and poverty alleviation.
 Methodology: The method used in this study is quantitative analysis. The data collection was obtained through a survey by distributing questionnaires to 100 members of Mitra Dhuafa Cooperative. The data was analyzed using Somers'd Correlation Test, with Statistical Package for Social Science (SPSS) software.
 Main Findings: The result of data analysis shows a positive relation (0.320) between the level of capability of micro business actors and poverty alleviation. The Indicators of empowerment success were measured by Amartya Sen's capability indicators, namely, opportunities and access in the economic, social, health, education, openness, and security fields. The research concludes by stating that Mitra Dhuafa Cooperative has succeeded in reducing the level of poverty by increasing the capability, bargaining power and independence of micro business actors.
 Applications: This study can be useful for implementing poverty alleviation program and Islamic microfinance programs in rural areas.
 Novelty/Originality: The combined implementation of Grameen Bank model and Sen’s capability approach to analyze its success for poverty alleviation in rural areas.

ANALYSIS OF THE IMPLEMENTATION OF MONEY LOAN TRANSACTION BUSINESS IN MITRA BISNIS KELUARGA VENTURE ACCORDING TO ISLAMIC ECONOMICS

This study aims to find out how the review of Islamic Economics is seen from the contract in accordance with sharia principles on the implementation of loan transactions for Venture Family Business Partners in Situ Udik Village, Cibungbulang District, Bogor. This type of research is descriptive qualitative research with exposure related to existing problem solving. The results of this study indicate, according to the review of Islamic Economics, seen from the analysis of the contract, the MBK Ventura money loan does not use a contract that is in accordance with sharia principles but uses the Grameen Bank system. Grameen Bank is the provision of unsecured loans that are devoted to the poor. This 20% profit sharing shows an additional loan from MBK Ventura's capital money for MBK Ventura itself. 20% is said to contain elements of usury, because in practice there is no contract in accordance with sharia principles. From the community response, it was shown that, successful or unsuccessful in using money for business capital, still had to pay a return on capital with an additional 20%. Thus, the implementation of the MBK Ventura money loan transaction is not permitted in Islam, because there is an addition to each loan including usury

Microcredit and Social Business Movement as Catalyst for Poverty Eradication: The Grameen Experience

Being a country of developing world, Bangladesh has a long-standing history of fighting poverty by means of microcredit. Thanks to the development of group lending approach of Grameen Bank established by Nobel laureate Professor Mohammad Yunus, which has later been widely accepted as an alternative to the traditional collateral based lending in extending credit facilities to the door of hard core poor at affordable terms, Bangladesh has been able to register tremendous success in alleviating poverty. Apart from Bangladesh, Grameen type microcredit programmes are now being replicated in more than 100 countries both in the developing and developed world. At the same time, Grameen has constantly been devising new entrepreneurial solutions to the problems of the poor in the name of social business- a social cause driven, non-loss, non-dividend, self-reliant business dedicated to serve the most pressing needs of the disadvantaged. Muhammad Yunus has been successful to create a global infrastructure for social business which is working as a catalyst for encouraging social business experimentations around the world. The paper will critically examine the Grameen solidarity lending mechanism and social business framework and their efficiency in approaching poverty with their cross border experiences.

Loan Repayment Pressure in the Practice of Microfinance in Bangladesh: An Empirical Study on Grameen Bank, BRAC and ASA

Loan Repayment Pressure in the Practice of Microfinance in Bangladesh: An Empirical Study on Grameen Bank, BRAC and ASA

FORCED LOAN-RECOVERY TECHNIQUE OF THE MICROFINANCE INSTITUTES IN BANGLADESH AND ITS IMPACT ON THE BORROWERS: AN EMPIRICAL STUDY ON GRAMEEN BANK, BRAC AND ASA

This paper presents the consequences of ‘forced loan-recovery’, which is an unconstitutional technique allegedly practiced by most of the microfinance institutes (MFIs) in Bangladesh. An empirical study was carried out on the borrowers of three leading microfinance institutes namely, Grameen Bank (GB), BRAC and ASA. Data were collected from two poverty-plagued villages namely, Uttar Islampur and Ruhitpur of Munshiganj district. The mixed research methods were applied. Findings of this study demonstrate that most of the borrowers experience assorted problems on the day of loan repayment. If they fail to pay back the debt aright loan officers and their allies treat them raucously. In order to avoid such unpleasant situations, insolvent borrowers tend to make multiple auxiliary loans and payback the previous ones. As a result, they fall into the decoy of a borrowing-repaying cycle. Sometimes, over-indebtedness compels them to sell out their tangible assets. Thus, they become even poorer. Furthermore, borrowers use to experience discontented domestic and social lives due to such loan-collection techniques of the microfinance institutes.

Handling default risks in microfinance: the case of Bangladesh

PurposeThis paper aims to identify incidences of default risks in microfinance.Design/methodology/approachSemi-structured interviews were conducted with individual borrowers in Grameen Bank. Upon completing the interview session from 40 respondents, the results of the interviews are interpreted by a comprehensive content analysis.FindingsThis study identifies the incidences of defaults in microfinance, which are post-disbursement monitoring, technical assistance, inexperienced field workers, weekly payment, accessible database, family member illness, hiding business, lack of motivation and over-stretched financial commitments. Among these incidences, the findings indicate that post-disbursement supervision is highly relevant in ensuring the success of microfinance because 80 per cent of the recipients of microfinance are illiterate women.Originality/valueThis study would be helpful for the investment companies, financial institutions, creditors and borrowers of microfinance. The financial institutions and investment companies need to identify borrower capacity and any obligation that may impede with repayment. It may help them to maximize returns on profit and minimize the risk of losses which contribute to economic growth.

Assessing NGOs micro-credit programs: a geo-spatial and socio-economic scenario from rural Bangladesh

Micro-credit programs have an enormous influence on the lives of millions of poor people from the rural areas of Bangladesh. This paper explores the significant contributions made by micro-credit concerning poverty reduction by increasing the income generating activities, empowerment of the rural poor so that they can properly get access to development services. This study is based on a household questionnaire survey, involving 533 respondents, and geographical information system (GIS) analysis to identify the concentration of NGOs, offering micro-credit in rural programs and find potential areas in need of such programs. A total of 30 NGOs with its 175 sub-branches were found in the study area. The NGOs have been considered the savior to the countless number of people who suffers from food, cloth, education and basic health facilities. Among others, the most prominent micro-credit institutions found were BRAC, Grameen Bank, RDRS Bangladesh and ASA. These institutions are working massively on poverty reduction, empowerment, and improvement of living standards for the poor people of the rural area. It indicates that NGOs have recognized to be very successful as a delivery system regarding relief and micro-credit inputs to the rural poor. However, in terms of poverty reduction, some individual achievements may have been made, but net welfare achievements at the union level remain nonexistent. The study suggests that NGOs should also focus on remote areas where such programs are severely needed to reduce poverty alleviation while working on improving their loan management system.

The case of Kiva and Grameen: Towards a Marxist feminist critique of ‘smart economics’

‘Smart Economics’ is no epiphenomenon. It is an instrument of exploitation at the heart of neoliberalism. The global neoliberal agenda has co-opted feminism, creating what Roberts calls ‘transnational business feminism’. With the promotion of entrepreneurialism, women in the Global South are targeted for exploitation in an attempt to introduce them into the formal markets. Female empowerment has become the new fetish for capital accumulation through the indebtedness of women in the Global South and the subsequent reproduction of capitalism. This reproduction of capital is possible due to the newfound access to the financial markets that is introduced through bringing women’s purchasing power into the fold. Microfinance institutions are the spearhead of ‘Smart Economics’ in the Global South, while arguing to alleviate poverty in rural areas. Microfinance institutions such as the Grameen Bank and kiva.org are examples of this. These organisations target women with a patriarchal agenda, which reinforces the gender relations in the Global South.

IMPLEMENTATION OF GRAMEEN BANK PATTERNS IN INCREASING AND STRENGTHENING THE MIDDLE ECONOMIC SECTOR POST-ERUPTION OF KELUD MOUNTAIN

The natural disasters of the Mount Kelud eruption that occurred in Malang Regency in 2014 had a negative impact on the economic conditions and the level of welfare of the communities affected by the eruption. After the eruption of Mount Kelud as a large part of the community that became victims will begin the condition of their economic activities starting from the beginning considering that most of the capital and production factors owned have been damaged and destroyed by the eruption. Meeting capital requirements is a major problem in starting the economic activities of the surrounding community. Capital adequacy by making loans to banking institutions is considered difficult by the community because the community is considered not bankable by financial institutions. The research methodology used in this study is to use descriptive methods by using literature review from various sources and data. The results of this study conclude that the capital shortcomings and difficulties experienced by the surrounding community after the Mount Kelud eruption can be overcome by implementing the Grameen Bank pattern, where the pattern is considered effective and in accordance with the conditions and attitudes of the community that uphold mutual cooperation and family values because of the Grameen Bank pattern adhering to a joint responsibility system.

Implementation of Financing Compass for Welfare Partner Operational System Grameen Bank in Banyumas Regency

Indonesia has a variety of microfinance service providers such as Commercial Banks, Rural Banks, Non-Bank Financial Institutions (LKBB), Micro Finance Institutions (MFIs), Savings and Loans Cooperatives (KSP) and other semiformal and informal institutions operating at the local community level. One Non-Bank Financial Institution operating in Indonesia is an institution with a group finance system - commonly referred to as Grameen bank. Its business objectives are to tackle poverty or other problems such as education, health, access to technology, and environmental issues that may threaten people and society. The research method used is field research with a sociological juridical approach. With the establishment of a poverty alleviation program involving many women, Grameen banks became one of the integrated institutions in public health programs by establishing sanitation and water programs as a health support product of its partners. This product is called KOMPAK and aims to develop financing products for the development of water quality and sanitation improvement among low-income people. Women Grameen bank actors are not only a target in the development of the business world, they also provide education on improving the quality of life and raise awareness of the importance of water hygiene and sanitation health. The company offers loans to economically active but low-income women especially those living in urban and rural areas.

Patriarchal Society and Women’s Roles in Bangladesh: Grameen Bank on Social Change

本論は，女性の従属・隔離という価値観や規範が染み込んだ父系社会バングラデシュで，女性たちに小額融資をすることで新たなチャンスを与えてきたグラーミン銀行を取り上げ，その女性向けローンが，実際，家計の役には立ってきたものの，父系社会を変革するものではないことを，現地調査による4つの村の100名への面談結果などをもとに論じる．

Partnership Based Microfinance in Islamic Banks: Need, Application and Commandments in Modern Age

There is no doubt that through endorsing different Islamic modes of financing, Islamic banks are showing the right way to people to free themselves from the menace of interest. However, it is equally necessary for Islamic banks to invest on poor members of the society. A keen observation of Islamic banks reveal that their greatest shortcoming is their inability and lack of interest in financing as well as investing on poor individuals of the society. The term ‘Islamic banking’ not only reflects the transitional modes of financing but also highlights the ideal modes of financing. Welfare of underprivilegedmembers of the society is an important goal of the Shari‘ah. Dr. Muhammad Younus founded Grameen Bank with the aim of providing capital to the underprivileged segment of the society, giving two dollars each, which also earned him a Noble prize. Unfortunately, a banker with an interest-based background felt the dire necessity ofproviding loans to the poor, regardless of the fact that this loan was interest-based and prohibited by the Shari‘ah. His efforts were also appreciated worldwide. On the contrary, Islamic banks promoting Islamic financing still hesitate to invest on poor people, accusing them of default. Historically, this is an erroneous assumption, as poor people have the lowest level of default, while rich industrialists, politicians etc. usually have the highest level of default. So, it is the need of the hour to initiate microfinance in Islamic banks and its immediate launch should be closer to the goals of the Shari‘ah. This article discusses the potential of microfinance and also proposes practical methods of microfinance, especially the methods that focus upon partnership. If Islamic banks adopt these modes of microfinance they can speedily grow in this field as well.

WOMEN'S ECONOMIC EMPOWERMENT AND MICRO-FINANCE OPERATION IN BANGLADESH: FROM POLICY TO OPERATIONAL LEVEL INTERVENTIONS

In the present context of women’s socio-economic empowerment, Bangladesh has played a revolutionary role in microcredit movement and has proved that the poor women are creditworthy and they can even do better in repaying the debt. This movement is no longer limited to only microcredit program; rather it includes more service-oriented in the frame of microfinance operation. Microcredit institutions in Bangladesh have dramatically increased the credit available to poor rural women since the mid-1980s. Moreover, Microfinance Institutions (MFIs) have become a dominant financial institution for the poor section of people, especially women who cannot access formal financial institutions in a large extent. Though poor women have access to microfinance, later it has been explored that due to various kind of patriarchal norms and other socio-economical constraints, women in most cases lose the control on proper utilization of debt. Even though, sometimes women’s decision-making power and the expansion of enterprise became shrink due to lack of control over the loan utilization process. This paper mainly focuses on how microfinance intervention in Bangladesh played a decisive role in women’s economic empowerment and to what extent government policy initiatives and institutional building approach assist in flourishing microfinance discourse more friendly for the most vulnerable poor women. Moreover, this paper also evaluates the most prominent two selected institutions named BRAC and Grameen Bank’s microfinance operation from a critical viewpoint and assess to what are the existing ambiguity in the arena of microfinance operation at the field level. Article visualizations:

Micro Finance Schemes : An Insight into the Impact on Standard of Living and Level of Awareness Amongst Target Social Groups.astudy of Bhopal District

Today if you look at the financial system around the globe, more than half the population in the world- around three billion – do not qualify to take out a loan from a bank (Muhammad Yunus).This reason turned out to be the actual driving force behind the birth of the microfinance movement stating from Grameen Bank in Bangladesh in 1983 to Grameen America movement today. Microfinance has received increasing attention as an effective strategy to alleviate poverty by providing financial services to the poor who have little or no access to capital and formal financial services, as well as providing additional support services such as training on education, healthcare and other basic needs. Yet the increasing attention and reputation that microfinance institutions (MFIs) have achieved, their contribution to poverty alleviation on a global level remains limited. The research paper aims to take an insight into the impact of microfinance schemes on the standard of living of the beneficiaries who have availed the advantage of such schemes in the district of Bhopal. The study aims to reveal the experience of these beneficiaries through careful investigation and analysis. The Microfinance schemes propose to aim at poverty eradication among the society. The objective of this study thus brings under its purview the examination of how these schemes have impacted greatly on asset acquisition and savings of the beneficiaries tocurb down their poverty level. A total of 720 beneficiaries of State Bank of India in Bhopal were selected as the study sample who had alreadyavailed the benefits of these Microfinance schemes. A primary questionnaire was formulated to record the experiences of these beneficiaries and thus the results were analyzed. Furthermore, the paper also examines the level of awareness about the microfinance schemes amongst the target social groups for whom these schemes have been devised.