Grameen Bank Replication:
Lessons Learnt

  • Small Loans:
    Successful programmes offer small loans (usually less than $100) in the begining. Larger loans are given later after the women have developed the skills, discipline and committment needed for success

  • Primarily Women:
    Successful programmes make loans mostly to women, who are much more committed to using their loans for the benefit of their families, and generally have a stronger committment to repay their loans in order to qualify for larger loans in the future.

  • Groups of Five:
    Successful programmes insist that the women be organized into groups of five, with each person in the group committing to guarantee the loan payment of the other members in the group.

  • Weekly Payments:
    Successful programmes insist that payments be made on a weekly basis, thus helping to build discipline and consistency. Weekly payments on small loans over a period of 52 weeks also ensure that the payments required each week are small enough, that if one person in the group could not pay in a given week, the others would be able to make the payment for her.

  • Lower Poor:
    Successful programmes provide loans only to the very poorest of the poor. These women have no other alternatives, so they are much more committed to repaying their loans.

  • Required Savings:
    Successsful programmes require all borrowers to put some amount of money into a savings account each week that will earn interest. Establishing these savings accounts appears to strengthen the borrowers committment to the programme, but also helps to build their sense of dicsipline, self-esteem, and well-being.

  • Interest Charged:
    Successful programmes charge an appropriate level of interest, usually higher than what a bank might charge, but much less than what a money lender would charge: this is generally between 2-3 percent per month, just enough to pay salaries of the bank workers supervising the programme in their area.

  • Banking Business:
    Successful programmes generally hire people with a business or banking background to be village bank workers and the programme is perceived to be a banking programme, pure and simple, in which the borrowers are clients, not beneficiaries.

  • High Committment to Training:
    Successful programmes develop a strong committment to meet with the people every week on a regular schedule, to give training in literacy, health, and community development, in addition to training in accounting, marketing and enterpreneurial skills.

James B. Mayfield in Choice Humanitarian, Fall 1998, pp.2.

Hari Srinivas -
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