Grameen Bank is a unique financial institution in Bangladesh founded by Professor Muhammad Yunus in which the Nobel Peace Prize 2006 was awarded jointly to Professor Yunus and the bank for “their efforts to create economic and social development from below". The bank promotes credit as a human right by started providing microcredit to the rural poor to help the poor people to move out from poverty. Therefore, the aim of this paper is to show the purpose that Professor Yunus established Grameen Bank and his principles and strategies; the rise of Grameen bank and microcredit; Grameen bank difficulties; and the explanation of how the bank improving the lives of the poor. Though Grameen Bank had a long experience providing microcredit services to the poor people, the bank saw the need of improving its original model, Classical Grameen Bank; thus, the new Grameen Generalized System or Grameen Bank II was introduced. Grameen II remains the basic concepts that Grameen credit is not based on collateral but on trust. The main changes were repayment flexibility and the additional of financial products offered to the borrowers. Grameen Bank had been doing what it could to reduce poverty. However, the bank was question for its achievement and success. Microcredit concept was described as a death trap for the poor by Dr. Qazi Kholikuzzaman Ahmad, while a report named Dynamic Effects of Microcredit in Bangladesh by researchers at the World Bank, it tracks program development and outcomes over the course of 20 years, and finds that the concept do indeed help lift people out of poverty.
See Full PDF See Full PDFInternational Journal of Business and Social Science ISSN 2219-1933 (Print), 2219-6021 (Online)
Indian microfinance industry is flourishing and spreading very fast. Recently some top MFIs have shown massive growth. Some of these MFIs have shown 100 per cent returns from the loans disbursed. The growth rate of 100 per cent to 421 per cent was recorded with at least 14 MFIs. The reason behind their rapid growth and development is associated with SHGs, which have resulted as the backbone for MFIs. Heavy interest rates charged on loans by MFIs is the primary reason for their unprecedented growth, as the targeted people mostly belong from the poor and low-income class of society, who have no other means of accessing finance facility through proper channels from scheduled banks. This article makes an attempt to analyze interest rates of MFIs in India and Bangladesh. A significant difference in interest rates of MFIs within India and Bangladesh is also calculated. It is found that MFIs in Bangladesh are charging lower interest rates on loans as compared to Indian MFIs. An attempt is made study the micro financial system of Malaysia where AIM is studied and observed to be an alternative for Indian microfinance institutions with respect to their rates of Interest, which can help Indian poor, Underprivileged and unemployed people a chance to raise their living standard from existing.
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