chapter  18
10 Pages

Microfinance

WithMuinul Islam

This chapter presents a review of the Grameen Bank (GB) model. The World Micro Credit Summit Conference was held in Washington, DC, in 1997 to expedite the replication of the GB model in different countries around the world. The 2006 Nobel Peace Prize citation recognized the crucial role played by the GB model as an effective tool for fighting poverty. The ‘GB model’ of microcredit has been replicated in more than 150 countries as a tool for fighting poverty. GB challenged the collateral-based banking principle right from the experimentation stage when Yunus started an action research project in 1976 in a village named Zobra, located near the University of Chittagong, Bangladesh. The GB hierarchy runs from the GB head office, zone, area, branch, center and group. One must admit that the microcredit concept institutionalized by Yunus’s GB has successfully shattered the myth of the indispensability of collateral-based formal banking.