Grameen Bank - Fighting Poverty with Microcredit
SARAJÄRVI, MIRKA (2004)
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SARAJÄRVI, MIRKA
2004
Kansantaloustiede - Economics
Kauppa- ja hallintotieteiden tiedekunta - Faculty of Economics and Administration
Hyväksymispäivämäärä
2004-12-14Tiivistelmä
Hakutermit:
Microcredit, Poverty Reduction, Grameen Bank, Social Capital, Human Capital, Women
This thesis examines microcredit as an instrument to reduce poverty. Microcredit is a small size loan given to economically disadvantaged people in order to help them become self-employed, and thus generate income and escape poverty. Over the past decade, microcredit programs have spread all over the world and are becoming one of the most popular tools to fight poverty. Microcredit projects often include mechanisms to increase human- and social capital as well. Education and social contacts are essential for effective use of the microloans distributed.
This thesis is a case study of Granmeen Bank operating in Bangladesh. It is the leading organisation in the field of microfinancing for the poor. It has been providing credit to the poorest of the poor in rural Bangladesh, without any collateral or legal documents, for the last 28 years. During this time Grameen Bank has pulled thousands of people above the poverty line. The Bank operates on a financially sound way, providing all loans from its own funds, and has an amazingly high loan repayment rate of 99 percent. Most microcredit organisations depend fully on donor money, and because of this the biggest challenge in the future for them is to get their programs to run in an economically sustainable way. Grameen Bank’s methods have been replicated in dozens of countries around the world.
The material for this thesis came mainly from the Managing Director of Grameen Bank, Professor Muhammad Yunus, and from Shahidur Khandker’s book ‘Fighting Poverty with Microcredit’. The World Bank and the UN have also done lot of research regarding microfinancing in the recent past. The introduction chapter explains what microcredit is. The second chapter looks into Grameen Bank’s history and its current situation, as well as explores Grameen Bank microcredit’s special features. The fourth chapter shows the impact of microcredit programs on individual borrowers and on the whole economy. This chapter also discusses the importance of social capital in poverty alleviation. The last chapter gives recommendations about how microcredit programs could be improved in the future to obtain better results in poverty alleviation.
Studies done during the past years show that microcredit programs are among the most effective antipoverty schemes in many countries. The discussion regarding microloans is a lively topic in development and media circles.
Microcredit, Poverty Reduction, Grameen Bank, Social Capital, Human Capital, Women
This thesis examines microcredit as an instrument to reduce poverty. Microcredit is a small size loan given to economically disadvantaged people in order to help them become self-employed, and thus generate income and escape poverty. Over the past decade, microcredit programs have spread all over the world and are becoming one of the most popular tools to fight poverty. Microcredit projects often include mechanisms to increase human- and social capital as well. Education and social contacts are essential for effective use of the microloans distributed.
This thesis is a case study of Granmeen Bank operating in Bangladesh. It is the leading organisation in the field of microfinancing for the poor. It has been providing credit to the poorest of the poor in rural Bangladesh, without any collateral or legal documents, for the last 28 years. During this time Grameen Bank has pulled thousands of people above the poverty line. The Bank operates on a financially sound way, providing all loans from its own funds, and has an amazingly high loan repayment rate of 99 percent. Most microcredit organisations depend fully on donor money, and because of this the biggest challenge in the future for them is to get their programs to run in an economically sustainable way. Grameen Bank’s methods have been replicated in dozens of countries around the world.
The material for this thesis came mainly from the Managing Director of Grameen Bank, Professor Muhammad Yunus, and from Shahidur Khandker’s book ‘Fighting Poverty with Microcredit’. The World Bank and the UN have also done lot of research regarding microfinancing in the recent past. The introduction chapter explains what microcredit is. The second chapter looks into Grameen Bank’s history and its current situation, as well as explores Grameen Bank microcredit’s special features. The fourth chapter shows the impact of microcredit programs on individual borrowers and on the whole economy. This chapter also discusses the importance of social capital in poverty alleviation. The last chapter gives recommendations about how microcredit programs could be improved in the future to obtain better results in poverty alleviation.
Studies done during the past years show that microcredit programs are among the most effective antipoverty schemes in many countries. The discussion regarding microloans is a lively topic in development and media circles.