ABSTRACT
Microfinance has been a buzzword of development thinking since the 1980s when the microcredit model implemented by Professor Muhammad Yunus through the Grameen Bank (GB) gained worldwide fame as a successful system of providing access to collateral-free bank credit to the rural landless poor people of Bangladesh, predominantly women, with a truly remarkable record of repayment of the loans on time. But, GB is designed as an institution for the development of the rural poor rather than merely a bank – it evolved as a model for overcoming poverty. During the last three decades, the ‘Grameen Bank model’ of microcredit has been replicated in more than 150 countries as a tool for fighting poverty. GB and its innovator, Muhammad Yunus, were awarded the Nobel Peace Prize in 2006 as recognition of Yunus’s contribution in innovating a successful model of poverty reduction through collateral-free microcredit to millions of landless people worldwide. The supporters of the Grameen Bank model claim that it is an effective tool in overcoming poverty. Its detractors do not agree, because, they argue, poverty is ‘systemic’, constantly created and recreated by the exploitative social, economic and political system of a country institutionalizing inequalities of income and wealth, social power and participation. In this chapter, we present a review of the Grameen Bank model.
