ABSTRACT
Studying the growth and evolution of microcredit in Bangladesh can be important for several reasons. Although the microcredit model of Grameen Bank has been replicated worldwide, no other country can match Bangladesh in its experience regarding the maturity and the extent of outreach of the microcredit programmes. Bangladesh’s experience thus allows an analysis of long-term household behaviour in accessing microcredit and its impact on household welfare. It is also possible to examine how the introduction of microcredit affects the rural credit markets over a long period of time, particularly in terms of the interaction of microcredit with various traditional and informal sources of credit. Another issue that has not yet been studied enough in the academic literature is whether multiple programme membership, which has increased as a consequence of the rapid expansion of microcredit, is harming or benefitting the borrowers. Other issues amenable to analysis may include the extent of resilience and long-run sustainability of the microcredit programmes, and the new challenges and possibilities emerging from a situation when the replication of the original model may near a point of market saturation. Bangladesh’s experience is worth studying for another reason, namely, the lessons learned from the numerous innovations, mutations and adaptations through which the classic Grameen model has been transformed over the years. In this chapter, however, we focus mainly on the growth of microcredit in Bangladesh in relation to the rural credit markets and the credit needs of the poor.
