Bangladesh Grameen Bank - Pioneer in Microfinance*



Case Code : CLBS027
Publication date : 2004
Subject : Business Strategy
Industry : Microfinance
Length : 03 Pages
Price : Rs. 50

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Key words:

Microfinance, commercial banks, entrepreneurial ventures, financial institutions

* This caselet is intended for use only in class discussions.
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The case gives an overview of microfinance and its use as an effective tool for poverty reduction, with specific reference to Bangladesh Grameen Bank. The case also discusses Grameen Bank’s microfinance model and its application in Bangladesh.


 » Understand the microfinance model and working of Bangladesh Grameen Bank.
 » Understand importance of microfinance in the rural financial set up.


The Grameen Bank model was one of the widely researched microfinance models all over world. The Bank had four tiers, the lowest level being branch office and the highest level being the head office, second highest being zonal office, and next highest being area office.

The branch office supervised all ground activities of the bank such as organizing target groups, supervising credit process and sanctioning loans to the members. For every 15-22 villages a branch was set up with a manager and staff. Area office supervised around 10-15 branch offices.

Program officers assisted the area office to supervise utilization of loans and recovery of the same. All area offices were under the purview of Zonal Office. Each zonal office supervised around 10-13 area offices and all zonal offices reported to the head office situated in Dhaka.

Grameen Bank operated on the principles: mutual trust, supervision, accountability and member participation.....

Questions for Discussion:

1. What do you think is the secret of Grameen bank’s success? Why did the bank succeed though the interest rates it charged are higher than those charged by commercial banks?

2. Comment briefly on Grameen bank’s model and its operations?