ABSTRACT
This chapter discusses the interrelationships of the Grameen Bank microlending, cost recovery, and profit making in the context of capitalist finance and how the bank’s ownership by its borrowers is important in promulgating bank policies, specifically, in transferring the transaction costs of microlending from the institution to the borrowers. It presents the importance of expanding credit programs and scaling up outreach for achieving the goal of institutional economic sustainability and the implications of this for borrowers and bank workers and the role of bilateral and multilateral donors in the process. The reduction in the branch’s investment produces a negative impact on its profitability and financial sustainability. In the mid-1980s and 1990s the expansion of the Grameen Bank in most regions of Bangladesh and its international reputation for loan recovery changed the bank’s emphasis from borrower sustainability to profit making and institutional financial sustainability.
