Themes: EVA Financial concepts
Period : 2003
Organization : World Bank, Bangladesh Grameen Bank
Pub Date : 2003
Countries : Bangladesh
Industry : Banking and Financial Services
- Dr. Muhammad Yunus, Founder - Bangladesh Grameen Bank, in March 2002.1
- Jonathan J. Morduch, Associate Professor of Economics, New York University in 2001.2
-Shahid Khandker, Senior Economist, World Bank, in 1999.3
Yet another monsoon season was approaching; but Joshuna Begum (Begum) unlike her neighbours was not worried about her house getting damaged during the monsoon. Her house now had a tin roof, mud walls and wooden windows, a luxury in rural Bangladesh. Earlier, Begum’s house had a straw roof and bamboo walls, which used to get damaged in the monsoon season, forcing the whole family to live in the kitchen. She got her hut repaired with a loan from the Bangladesh Grameen4 Bank (Grameen Bank).
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The Grameen Bank model was replicated across the world -- not only in developing countries like India, Pakistan, and Vietnam, but even in developed countries such as Australia and the USA, where similar schemes were set up to improve the lives of the urban poor (Refer Exhibit II).
However, the Grameen Bank also attracted criticism from the media and economists all over world. Analysts pointed out that there was no proper monitoring of how the loans were utilized; it was reported that the loans availed of by women were used largely for consumption rather than for investment purposes. Analysts also pointed out that the accounting methods used by Grameen Bank were not in accordance with industry standards, and that the bank did not provide full details about its financial position and loan repayments position.
1] Grameen Bank in 'strongest position ever', www.news.bbc.co.uk, March 12, 2002.
2] Grameen Bank, Which Pioneered Loans For the Poor, Has Hit a Repayment Snag, Wall Street Journal, November 27, 2001.
3] New Study Confirms Benefits of Bangladesh's Microcredit Programs, www.worldbank.org, January 14, 1999.
4] Grameen in Bengali language means - Village.
5] Defined as a per capita income of $1 a day in terms of purchasing power parity.