1

Department Of Management
Term Paper
On
Application Of The Role of Micro-Credit in Economic
Development of Bangladesh:A Case Study on Grameen Bank

SUBMITTED TO: SUBMITTED BY:

Samima Yeasmin Md Moniruzzaman
Assistant Professor BBA (Hon’s)Final Year
Department of Management Class Roll: 858
Govt.Titumir College,Dhaka Reg No:19726000254
Session:2018-19
Department of Management
Govt.Titumir College,Dhaka

Affiliated With University Of Dhaka

DATE OF SUBMISSION: 31 MAY,2023
1

Table of Content

SL No Title Page No
A
1 Letter Of Transmital 2

2 Student’S Declaration 3

3 Supervisor Certificate 4

4 Excutive Summery 5-6

5 Acknowledgment 7

6 Introduction 8-10

7 Literature Review 11-13

B
8 Purpose of the study 14-15

9 Methodology and Data Analysis 16-18

10 Resrarch Type 19-21

11 Conclusion 22-23

C
12 Limitation of the Study 24-26

13 Recommendations 27-28

15 Reference 29-30
2

Part : A

Letter Of Transmital
To
Samima Yeasmin
Assistant Professor
Department of Management
Govt.Titumir College,Dhaka

Subject: The Role of Micro-Credit in Economic Development of Bangladesh:A Case Study

on Grameen Bank.
Dear Mam,
This is a great pleasure for me to submit this successful Term Paper upon The Role of
Micro-Credit in Economic Development of Bangladesh:A Case Study on Grameen
Bank .During my working period, I went through various places.I hsve tried my level best to
prepare the perspective of “The Role of Micro-Credit in Economic Development of
Bangladesh:A Case Study on Grameen Bank.”.I have gathered a lot of practical
kmowledge to prepare this term paper.Through This purpose I have been able to know the
actual market scenario.I think this is a great achievement for me as a student.I would feel
really great if this term paper is of any use.

Finally,I would like to thank you for valuable guidance & supportive in prepareing this term
paper.I would be greatful for any clearification when required and highly oblighed if you
approve this term paper and provide your valuable judgement on it.

Yours faithfully

Md. Moniruzzaman
BBA (Hon’s)Final Year
Class Roll: 858
Reg No:19726000254
Session:2018-19
Department of ManagementGovt.
Titumir College,Dhaka
3

Student’S Declaration
I am writing to submit my term paper titled "The Role of Industrial Democracy Practice in
Bangladesh" as part of the requirements for the Deparment of Management at Govt Titumir
College. I hereby declare that this paper is my original work, and any references and sources
used have been appropriately cited and acknowledged.

Furthermore, I understand that plagiarism is a serious offense, and I have taken necessary
precautions to avoid any form of plagiarism in my work. To ensure the authenticity of my
research, I have utilized reputable sources and cross-referenced information from multiple
perspectives.

I would like to express my sincere gratitude to my Term paper instructor Samima Yeasmin,
Assistant Professor Department of ManagementGovt.Titumir College,Dhaka.For her
guidance and support throughout the development of this term paper.

Please find enclosed the hard copy of my term paper, as well as an electronic copy [if
applicable]. I hope that this research will provide valuable insights into the practice of
industrial democracy in Bangladesh and contribute to the existing body of knowledge in this
field.

Thank you for your time and consideration. I remain available for any further clarification or
discussion regarding my term paper.

Yours sincerely,

Md. Moniruzzaman
BBA (Hon’s)Final Year
Class Roll: 858
Reg No:19726000254
Session:2018-19
Department of Management
Govt.Titumir College,Dhaka
4

Supervisor Certificate

This is to certify that Md Moniruzzaman, Reg No:19726000254,Session:2018-19 Department

of Management Govt.Titumir College,Dhaka has completed his Term Paper titled
Submission Of The Role of Micro-Credit in Economic Development of Bangladesh:A
Case Study on Grameen Bank. this term paper was free from plagiarism as per my
knowledge.

I would like to extend my congratulations once again on your outstanding work. Your
commitment to excellence is evident, and I have no doubt that you will continue to excel in
your academic pursuits. I wish you the best of luck in your future endeavors.

Please feel free to reach out to me if you have any further questions or require any additional
assistance. Thank you for your hard work and dedication.

Samima Yeasmin
Assistant Professor
Department of Management
Govt.Titumir College,Dhaka
5

Excutive Summery
This term paper explores the role of micro-credit in the economic development of
Bangladesh, with a specific focus on the Grameen Bank. Micro-credit has emerged as a
powerful tool for poverty alleviation and economic empowerment, particularly in developing
countries. Bangladesh, being one of the world's most densely populated countries with
significant poverty challenges, has experienced remarkable success in utilizing micro-credit
to uplift its economy and improve the lives of its citizens.

The case study primarily examines the Grameen Bank, a pioneer in micro-credit founded by
Nobel laureate Muhammad Yunus. The Grameen Bank's innovative lending model, which
provides small loans to the poor, especially women, has transformed the lives of millions of
Bangladeshis. By analyzing the bank's operations, impact, and challenges, this paper aims to
shed light on the broader implications of micro-credit in the country's economic development.

The findings of this study indicate that micro-credit, as implemented by the Grameen Bank,
has had a significant positive impact on poverty reduction and economic growth in
Bangladesh. The provision of small loans has enabled borrowers to start or expand their small
businesses, create employment opportunities, and generate income. This, in turn, has led to
improved living standards, increased access to education and healthcare, and enhanced
women's empowerment, as the majority of borrowers are women.

Furthermore, the Grameen Bank's approach of group lending, social collateral, and
participatory decision-making has fostered a sense of community and social cohesion among
borrowers. It has also played a crucial role in instilling financial discipline, promoting
savings, and building financial literacy among the borrowers. These factors have contributed
to the sustainability and success of the micro-credit program.

However, the paper also identifies challenges and limitations associated with micro-credit in
Bangladesh. These include high interest rates, over-indebtedness, lack of diversified financial
services, and vulnerability to external shocks. Additionally, the study highlights the need for
comprehensive support systems, including training, skill development, and access to markets,
to ensure the long-term success and impact of micro-credit initiatives.
6

Based on the findings, this paper concludes that micro-credit, exemplified by the Grameen
Bank, has played a pivotal role in the economic development of Bangladesh. It has
effectively addressed poverty, empowered women, and fostered entrepreneurship. The
success of the Grameen Bank has also inspired the replication of micro-credit models
globally. However, it is crucial to address the challenges and limitations to further enhance
the effectiveness and sustainability of micro-credit programs.

Overall, this term paper provides valuable insights into the role of micro-credit in the
economic development of Bangladesh, highlighting the significance of the Grameen Bank as
a case study. The findings contribute to the existing body of knowledge on micro-credit and
provide recommendations for policymakers, practitioners, and researchers to further leverage
micro-credit's potential in driving sustainable economic development and poverty reduction
in Bangladesh and beyond.
7

Acknowledgment
I would like to express my deepest gratitude and appreciation to all those who have

contributed to the successful completion of my term paper on " The Role of Micro-Credit in
the Economic Development of Bangladesh: A Case Study on Grameen Bank." Their
guidance, support, and encouragement have been invaluable throughout this journey.

First and foremost, I would like to extend my heartfelt appreciation to my supervisor,

Samima Yeasmin Assistant Professor Department of ManagementGovt.Titumir

College,Dhaka. for their unwavering guidance and insightful suggestions. Their expertise and

constructive feedback played a crucial role in shaping the direction of this research.

I extend my sincere gratitude to the individuals who generously shared their time and

expertise for interviews and discussions related to the topic. Their valuable insights and

firsthand experiences greatly enriched the content of this paper.

Furthermore, I am indebted to the staff and management of various organizations in

Bangladesh who graciously provided access to information and data necessary for the

research. Their cooperation and support were instrumental in obtaining comprehensive and

reliable data.

I would like to acknowledge the assistance of my friends and classmates who provided

valuable input and feedback during the development of this term paper. Their constructive

criticism and discussions helped me refine my ideas and arguments.

In conclusion, the completion of this term paper would not have been possible without the

contributions and support of the individuals mentioned above. Their dedication and

collaboration have significantly enhanced the quality of this work. I am truly grateful for their

involvement and guidance.

8

Introduction
1. Background and significance of micro-credit:

Micro-credit is a financial tool that involves providing small loans to individuals who are
traditionally excluded from the formal banking sector due to lack of collateral, credit history,
or reliable income. The concept of micro-credit gained prominence in the 1970s and 1980s,
primarily through the pioneering efforts of Muhammad Yunus and the establishment of
Grameen Bank in Bangladesh.

The background of micro-credit in Bangladesh is rooted in the country's challenging socio-

economic conditions. Bangladesh is a densely populated and impoverished nation with
limited access to financial services for the majority of its population. The conventional
banking system failed to reach the poor, especially rural women, who were often engaged in
small-scale entrepreneurial activities to sustain their livelihoods.

In this context, Grameen Bank was established in 1976 by Muhammad Yunus, a Bangladeshi
economist and Nobel Laureate. Grameen Bank aimed to alleviate poverty and empower
women by providing them with small loans without collateral, fostering financial inclusion
and entrepreneurship. This innovative approach to lending, based on trust and group
accountability, became known as the "Grameen Model" and served as a catalyst for the
micro-credit movement globally.

The significance of micro-credit, particularly exemplified by the Grameen Bank, lies in its
impact on the economic development of Bangladesh. Here are some key aspects of its role:

• Poverty Alleviation:

Micro-credit programs have played a crucial role in poverty reduction in Bangladesh. By

providing access to credit, individuals and households are empowered to start or expand
small businesses, increase their income, and improve their living conditions. Grameen
9

Bank, through its micro-credit initiatives, has lifted millions of people out of poverty,
especially women who have been able to generate income and contribute to their families'
well-being.

• Women's Empowerment:

Micro-credit has been instrumental in empowering women in Bangladesh. Traditionally

marginalized and excluded from financial opportunities, women have gained economic
independence through access to credit. Micro-credit programs often prioritize women
borrowers and encourage their participation in income-generating activities, leading to
improved gender equality, increased decision-making power, and enhanced social status for
women.

• Entrepreneurship and Employment Generation:

Micro-credit has stimulated entrepreneurship and facilitated the growth of small-scale

enterprises in Bangladesh. With access to credit, individuals can start businesses or expand
existing ones, creating employment opportunities for themselves and others in their
communities. This has contributed to economic growth, reduced unemployment rates, and
stimulated local economies.

• Social Development:

Micro-credit programs have had positive social impacts beyond economic development. By
promoting financial inclusion and community-based lending, micro-credit has fostered social
cohesion and solidarity among borrowers. Additionally, the emphasis on group-based lending
and peer support has enhanced social capital, strengthened social networks, and encouraged
community development initiatives.

Overall, the success of micro-credit programs, exemplified by the Grameen Bank, in

Bangladesh has demonstrated the potential of this approach in addressing poverty,
empowering women, and driving economic development. The model has been replicated and
adapted in various countries worldwide, showcasing the significance of micro-credit as a tool
for inclusive and sustainable development.
10

2. Overview of Grameen Bank and its objectives

• Poverty Reduction:

By providing access to credit, microcredit has helped lift people out of poverty.
It has empowered borrowers to invest in income-generating activities, build
assets, and improve their living conditions over time.

• Financial Inclusion:

Grameen Bank has played a crucial role in promoting financial inclusion in

Bangladesh. By offering financial services to marginalized communities and
individuals who were previously excluded from the formal banking sector,
Grameen Bank has increased access to credit, savings, and other financial
products. This has helped individuals and communities build financial
resilience, improve their economic prospects, and contribute to overall
economic development.

• Replication of the Grameen Model:

The success of Grameen Bank's microcredit model has led to its replication in
many other countries around the world. The Grameen model has inspired the
establishment of similar microfinance institutions, empowering millions of
people globally. This has had a broader impact beyond Bangladesh, influencing
poverty alleviation efforts and promoting sustainable development in various
countries.

Overall, Grameen Bank's contributions to Bangladesh include poverty

alleviation, women's empowerment, financial inclusion, and the promotion of
social business. Its innovative approach to microcredit has had a profound
impact on the lives of millions of people, improving their socio-economic
conditions and fostering sustainable development.
11

Literature review
Literature review in micro credit of the Grameen Bank in poverty reduction is very large.
Despite these various studies, the efectiveness and success of microcredit program of
Grameen Bank on poverty reduction is highly questionable in Bangladesh.Begum et al.,
(2005) studied “the role of Grameen Bank in enhancing the socio-economic conditions of
women”. The study revealed that Grameen Bank helped women with financial support with a
provision to pay back loans with interest. After taking micro credit, most of the women
developed their living standard to such a level to ensure better food, cloths, shelter, drinking
pure tube-well water, taking help of doctor, and ensuring other necessary facilities for a
modest living. But, Kathrina (2012), the German Journalist, told about trapping in debt of a
woman whom she met in 2012 at Kurigram district in Bangladesh. Islam, et al., (2012)
examined “The aspect of micro credit nance system of Grameen Bank of Bangladesh”. The
paper discussed controversial (positive and negative) impact of Grameen Bank with
mathematical calculation. They showed that Grameen Bank is a revolutionary tool to
eradicate poverty through micro-credit to the rural people who are asset-less and landless.
But, sometimes the loan are used even dowry which is crime against women’s right and some
of the borrowers lost lands and assets to pay the loan due to high interest rate.Noreen et al.,
(2011) examined the role of micro credit in poverty alleviation. They used education of
children, housing, food security, household expenditure and household assets as concept of
micro credit. They proved that micro credit program has a positive and significant impact on
children education and household expenditures whereas there was no significant impact on
housing condition, consumption of food and ownership of household assets. So, this is the
contradictory study in which micro-credit can reduce poverty.The study conducted by Shirazi
and Khan (2009) showed two types of poor such as the poor and the extreme poor. The
authors examined the impact of micro credit on poverty alleviation. Micro credit had reduced
the overall poverty level by 3.07 percentages (from 6.61 percent to 3.54 percent) and the
borrowers have shifted to higher income groups during the reported period. The poverty
status of the extremely poor borrowers has been marginally increased (by 0.63 percentage),
showing obviously no effect of micro credit on poverty status of these households. Nabi, et
al., (1997) worked “Grameen Bank and Socio-economic Change- A Study of Selected
Loanees”. In this study, the authors implied that Micro-creditnance institutions (MFIs) were
less interested in the up liftmen of economic condition of the poor people. They were
12

apparently seemed to be much concerned about the recovery of loan.Azad et al., (2004),
showed the impact of micro credit on poverty alleviation. They analyzed the three Micro-
nance institutions (MFIs) like Grameen Bank, BRAC, and ASA. They said that the
organization of MFIs has growth tremendously but poverty situation was not improved
substantially. Only few micro-creditnance institutions have focused their role for poverty
alleviation. They suggested only to change some polices and to include some policies of
MFIs for reducing the poverty.The role of micro-credit of Grameen Bank in alleviating
poverty cannot be ignored. In spite of some obstacles, it is recognized as an important anti
poverty device. The above literature surveys regarding micro-credit of Grameen Bank on
poverty reduction have indicated that there is a need for detailed empirical studies. As there
were controversial evidences in above literature surveys: some studies prove positive
impacts, while other show negative impacts in reducing poverty. These call on for more
studies in this area. The present study nds the gaps by studying the impact of micro-credit of
Grameen Bank in reducing poverty using concepts: like level of children education, housing
condition, food security, ownership of household assets, employment opportunity, and
savings opportunity.3.0 Objectives of the study The main objective of the study is to know
micro-credit programs of Grameen Bank and poverty reduction. So, this is the contradictory
study in which micro-credit can reduce poverty.The study conducted by Shirazi and Khan
(2009) showed two types of poor such as the poor and the extreme poor. The authors
examined the impact of micro credit on poverty alleviation. Micro credit had reduced the
overall poverty level by 3.07 percentages (from 6.61 percent to 3.54 percent) and the
borrowers have shifted to higher income groups during the reported period. The poverty
status of the extremely poor borrowers has been marginally increased (by 0.63 percentage),
showing obviously no effect of micro credit on poverty status of these households. Nabi, et
al., (1997) worked “Grameen Bank and Socio-economic Change- A Study of Selected
Loanees”. In this study, the authors implied that Micro-creditnance institutions (MFIs) were
less interested in the up liftmen of economic condition of the poor people. They were
apparently seemed to be much concerned about the recovery of loan.Azad et al., (2004),
showed the impact of micro credit on poverty alleviation. They analyzed the three Micro-
creditnance institutions (MFIs) like Grameen Bank, BRAC, and ASA. They said that the
organization of MFIs has growth tremendously but poverty situation was not improved
substantially. Only few micro-creditnance institutions have focused their role for poverty
alleviation. They suggested only to change some polices and to include some policies of
MFIs for reducing the poverty.The role of micro-credit of Grameen Bank in alleviating
13

poverty cannot be ignored. In spite of some obstacles, it is recognized as an important anti

poverty device. The above literature surveys regarding micro-credit of Grameen Bank on
poverty reduction have indicated that there is a need for detailed empirical studies. As there
were controversial evidences in above literature surveys: some studies prove positive
impacts, while other show negative impacts in reducing poverty. These call on for more
studies in this area. The present study finds the gaps by studying the impact of micro-credit of
Grameen Bank in reducing poverty using concepts: like level of children education, housing
condition, food security, ownership of household assets, employment opportunity, and
savings opportunity.
14

Part : B

Purpose of the study

The purpose of studying the economic development of Bangladesh with a case study on
Grameen Bank is to examine the role and impact of microfinance institutions on poverty
reduction and economic empowerment in the country. Grameen Bank, founded by
Muhammad Yunus in 1983, is one of the most renowned and successful microfinance
institutions globally. It has played a significant role in providing financial services to the
poor, particularly women, in rural areas of Bangladesh.

By conducting a case study on Grameen Bank, researchers can analyze various aspects of its
operations, strategies, and outcomes to understand how microfinance can contribute to
economic development at the individual and community levels. Some specific purposes of
this study could include:

1. Assessing the effectiveness of Grameen Bank's microfinance model in alleviating

poverty: Researchers may investigate the impact of microcredit and other financial
services provided by Grameen Bank on improving the economic conditions of
borrowers. This analysis may involve studying factors such as income generation,
employment opportunities, and asset accumulation among borrowers.
2. Understanding the socio-economic empowerment of women: Grameen Bank has
emphasized women's participation and empowerment through its microfinance
programs. The study may examine how access to financial services has influenced
women's social status, decision-making power, and overall well-being.
3. Examining the sustainability and scalability of microfinance initiatives: Grameen
Bank has achieved substantial success in expanding its operations and reaching a
large number of borrowers. Researchers may explore the factors that have contributed
to its scalability and sustainability, including the bank's financial viability, repayment
rates, and organizational structure.
4. Analyzing the role of microfinance in fostering entrepreneurship and small business
development: The study may investigate how microfinance provided by Grameen
Bank has supported entrepreneurship and the growth of small businesses in
Bangladesh. This analysis could include examining the impact on employment
generation, innovation, and economic growth.
15

5. Identifying challenges and potential areas for improvement: The study may also
identify challenges faced by Grameen Bank and the broader microfinance sector in
Bangladesh. It could explore potential areas for improvement, such as expanding
financial services to underserved regions, enhancing financial literacy, and addressing
issues related to client protection and over-indebtedness.

By examining the economic development of Bangladesh through a case study on Grameen

Bank, researchers can gain insights into the effectiveness and limitations of microfinance as a
tool for poverty reduction and inclusive economic growth. The findings can inform
policymakers, practitioners, and development organizations in designing and implementing
effective strategies for sustainable economic development in similar contexts.
16

Methodology and Data Analysis

Data were collected from employees who work in the Grameen bank complex of Dhaka,
Bangladesh. The Grameen bank complex comprises 18 different institutions such as Grameen
Bank, Grameen Communications, other nongovernment organizations, and private
companies, with more than 500 workers. We collected data from 271 employees who
received human-assisted Portable Health Clinic (PHC) system services to predict blood uric
acid. In general, a large sample size is required for machine-learning approaches. However,
some studies have used a small sample size, including N=300 [27] and N=118 [31]. Of note,
a small sample size has also been associated with higher classification accuracy [32].

Grameen Communications, Bangladesh and Kyushu University, Japan have jointly developed
a human-assisted PHC system [33]. A PHC is an eHealth system that aims to provide
affordable primary health care services to prevent the severity of or to control
noncommunicable diseases. A PHC system has four modules: (1) a set of medical devices,
(2) a software system to collect and archive medical records, (3) health care workers to make
the clinical measurements and explain ePrescriptions, and (4) ICT-trained call center doctors.
Consumers come to the service point and a health checkup is conducted by pretrained health
care workers. If needed, the consumer is connected to the call center doctors for a
consultation. The clinical measurements addressed by a PHC are as follows: (1) blood
pressure; (2) pulse rate; (3) body temperature; (4) oxygenation of blood (SpO2); (5)
arrhythmia; (6) BMI; (7) waist, hip, and waist/hip ratio; (8) blood glucose; (9) blood
cholesterol; (10) blood hemoglobin; (11) blood uric acid; (12) blood grouping; (13) urinary
sugar; and (14) urinary protein.

These test items (except arrhythmia, blood cholesterol, blood hemoglobin, blood grouping,
urinary sugar, and urinary protein because there were many missing cases in these
measurements) in this PHC system were used as input factors for the present study, and uric
acid measurement was set as an output factor.
17

The Grameen Bank project started in 1976 as an action research pilot project in "Jobra"
village in Chattogram district of Bangladesh. In 1983, the pilot project was transformed into a
bank with the aim of alleviating poverty and empowering the marginalized poor in
Bangladesh through micro-credit.

The unique feature of Grameen Bank is that no collateral is required to get the credit from the
bank. Unlike mainstream commercial banks that bring their clients to their shiny branch
premises where the poor are afraid to be trampled, Grameen Bank carries its services to the
comfort zone of its clients’ doorsteps. It has inspired the women and the weaker section of
the communities to join the Grameen fraternity. All banking transactions except loan
disbursement are done in the meetings of the borrowers at the village level centers organized
by the center managers. Grameen Bank's strong presence in remote areas of the country
bears witness to this fact. Grameen Bank has always made it a priority to empower women
and involve them in economic activities. As a result, Grameen Bank can proudly say that
98% of its borrowers are women. More than two-thirds of these women have moved on to
better lives through poverty alleviation.

Grameen Bank now operates in 40 Zonal offices, 40 Zonal Audit offices, 240 Area Offices,
and 2568 Branch offices, and the number of employees as of April 2023 stood at 21,016.
Grameen Bank is currently present in 81678 (94%) villages in the country and provides
services to nearly 45 million people (including family members) through 10.33 million
borrower members. Grameen Bank's microcredit program is being implemented as a
successful model in alleviating poverty in many countries of the world. Grameen Bank was
awarded the Nobel Peace Prize in 2006 in appreciation of its efforts to create economic and
social development from the bottom of the society through microcredit. Grameen Bank is
working not just to alleviate the poverty of its borrower members, but also to ensure that their
future generations are not left behind. It offers education loans, new entrepreneurship loans,
and scholarships to borrower members' children. Grameen Bank's most humanitarian and
exceptional program is the Struggle (Beggar) Members Program.
18

Grameen Bank offers interest-free loans to help beggars build financial capacity so that they
don't have to beg anymore. Already 21,383 members have given up begging and become
self-sufficient.

Up to April 2023, the cumulative amount of loan disbursement by Grameen Bank, since
inception, stood at US$ 36,412.63 million (BDT 2,837,128.09 million) to 10.33 million
borrower members, 97% of whom are female members. Following an exceptional banking
practice, Grameen Bank has ensured a lucrative recovery rate of 96.98% (as of April 2023)
which is comparatively higher than any other banking systems.

As of April 2023, the outstanding loans of the bank are US$ 1,535.30 million (BDT
158,013.07 million) and the balance of the deposit is US$ 2231.77 million (BDT 229,693.68
million).

The success indicators of Grameen Bank are now much higher than that of at any other time
in the past due to the charismatic and dynamic leadership of its present Board of Directors
and Management Team.

Grameen Bank has been actively contributing to the development of Bangladesh.

19

Resrarch Type
MONTHLY REPORT IN BDT (APRIL'23)

Date: May 18, 2023

Statement No: 1
Issue No. : 520, Issue Date : May 07, 2023
Grameen Bank Monthly Update in BDT: April, 2023
Sl. No Particulars In million BDT
• Cumulative Amount Disbursed Since Inception 2,837,128.09
• Cumulative Amount Repaid Since Inception 2,679,115.02
• Amount Disbursed this Month 15,612.02
• Amount Repaid this Month 14,104.86
Outstanding Loans
• Basic Loan 147,502.89
• Flexible Loan (a) 6,583.44
• Housing Loan 2,120.42
• Education Loan 1,479.02
• Other Loans 327.29
• Total : 158,013.06
• Rate of Recovery(b) 96.98
Total Outstanding of Borrowers Missing 5 to 9 Consecutive Installments
• Basic Loan 351.83
• Flexible Loan 2,100.54
• Total : 2,452.37
Overdue Loan
• Basic Loan 3,924.38
• Flexible Loan 114.91
• Housing Loan 17.21
• Other Loans 0.00
• Total : 4,056.50
20

Scholarship (Cumulative)
• Scholarship Recipient (Female) 202,236
• Scholarship Recipient (Male) 132,399
• Total : 334,635
Number of Members
• Female 10,007,617
• Male 327,278
• Total : 10,334,895
Note: Current Exchange Rate : 1USD = BDT 102.92

• 50 per cent provision is made on the outstanding of flexible loans at the end of each
month which is not passed two years and 100 per cent provision is made on the
outstanding of flexible loans which is crossed two years and more. Flexible loan will
be written off on the following date when it crosses three years.
• Percentage calculated on the actual collection against on loan schedule.
• If a borrower misses ten consecutive installments (except flexible loan) the entire due
(loan & interest) is treated as an overdue. Same system will be applicable each month
to the next. Regarding flexible loans, if a borrower misses ten consecutive
installments the entire loan & interest is treated as an overdue.
• Due amount of 26 weeks passed borrower’s loan and interest become overdue. Same
system will be applicable each month to the next. If not full payment within the period
entire due loan and interest become overdue. 100 provisions are made on the
outstanding of all overdue loans at the end of each month. Written of will be done
after one year later of overdue.
• In the case of one year duration, half within 26 weeks and ¼ for two years duration is
unpaid, the entire unpaid loan and interest on it becomes overdue. In case of less than
one year duration, if not paid up with the duration, then the entire unpaid amount with
interest falls overdue.
21

Objective of Grameen Bank:

Grameen Bank believes that the best way for participants to learn about how the bank works
is through first-hand exposure and observations at the field level. Through these experiences,
participants are encouraged to draw their conception about the effectiveness of Grameen
Bank’s work and the impact it has on the poorest of the poor. The objectives of GB’s training
programs are to:

• Arouse curiosity
• Stimulate interest in micro financing
• Encourage responsibility for self-motivated learning
• Learn and share with others
• Determine individual roles in the organization
22

Conclusion
In conclusion, the Grameen Bank has played a significant role in the economic development
of Bangladesh. Through its innovative microcredit model and focus on empowering women,
the bank has made a tangible impact on poverty reduction and the overall socio-economic
landscape of the country.

Firstly,
the Grameen Bank's provision of microcredit has enabled millions of poor individuals,
particularly women, to access financial services and start their own businesses. This has
helped to create income-generating opportunities, enhance entrepreneurship, and uplift
communities out of poverty. By targeting the most vulnerable and marginalized segments of
society, the bank has effectively contributed to reducing income inequality and improving
living standards.

Secondly,
the bank's emphasis on social development and capacity building has had far-reaching
effects. Grameen Bank borrowers are required to participate in weekly meetings, where they
receive financial literacy training, education on health and hygiene, and other valuable skills.
This holistic approach has empowered women, increased their decision-making abilities, and
enhanced their social status within their households and communities.

Moreover,
the Grameen Bank's model has been replicated and adapted in various parts of the world,
showcasing its effectiveness and potential for widespread impact. By demonstrating the
viability of microcredit and social entrepreneurship, the bank has inspired the creation of
similar institutions globally, providing millions of people with access to financial services
and opportunities for economic advancement.

However,
it is important to acknowledge that the Grameen Bank's success has not been without
challenges. Issues such as high interest rates, over-indebtedness, and limited scalability have
been raised as concerns. Additionally, the bank's reliance on donor funds and grants for
sustainability raises questions about long-term financial independence.
23

One of the key outcomes of Grameen Bank's initiatives is the reduction of poverty levels in
Bangladesh. By providing microloans to individuals, particularly women in rural areas,
Grameen Bank enabled them to start small businesses and generate income. This not only
lifted countless families out of poverty but also stimulated local economies by creating
employ The success of Grameen Bank also fostered social development and gender equality.
By primarily targeting women borrowers, it challenged traditional gender roles and
empowered women to become active participants in economic activities. Women borrowers
gained financial independence, improved decision-making power within their households,
and contributed to their families' well-being. This led to enhanced gender equality, improved
social dynamics, and greater opportunities for women in the broader society. ment
opportunities and fostering entrepreneurial spirit.

In conclusion,
the Grameen Bank has undoubtedly made significant contributions to the economic
development of Bangladesh through its microcredit and social development initiatives. It has
empowered individuals, especially women, and has served as a catalyst for poverty reduction
and inclusive growth. While there are challenges to address, the Grameen Bank's impact
serves as a testament to the potential of microfinance in fostering economic development and
improving the lives of the disadvantaged.
24

Part C

Limitation of the Study

The economic development study of Grameen Bank in Bangladesh may have certain
limitations. Here are a few potential limitations that could be considered:

Generalizability:
The findings of the case study may be limited in terms of their applicability to the broader
economic development of Bangladesh. Grameen Bank operates in specific contexts and may
not represent the entire spectrum of economic activities in the country. Therefore, caution
should be exercised when generalizing the study's results to other sectors or regions.

Sample Selection:
The study's findings may be influenced by the specific sample of participants or borrowers
chosen from Grameen Bank. The sample selection process could introduce biases and limit
the representativeness of the findings. It is crucial to consider the characteristics and diversity
of the sample to assess the validity and reliability of the results.

Causality and External Factors:

Establishing a causal relationship between the interventions of Grameen Bank and the
observed economic development outcomes can be challenging. Numerous external factors,
such as government policies, market conditions, infrastructure, and cultural dynamics, can
influence economic development. It is crucial to account for these factors and their potential
influence on the study's outcomes.

Data Limitations:
The study's conclusions may be subject to data limitations. Data availability, quality,
reliability, and the accuracy of self-reported information from participants could impact the
study's findings. Researchers should acknowledge and address any data limitations in their
analysis to ensure the credibility of the results.
25

Timeframe:
Economic development is a long-term process that evolves over time. The study's timeframe
may limit the assessment of the long-term impact of Grameen Bank's interventions. It is
essential to consider the sustainability and durability of the observed economic development
outcomes beyond the study's scope.

Contextual Factors:
Economic development outcomes are influenced by a wide range of contextual factors, such
as political stability, social dynamics, education levels, and institutional frameworks. These
factors may not be adequately captured or controlled for in the study, limiting the
understanding of the full range of influences on economic development.

Time constraints:
The study's timeframe might be limited, potentially hindering a comprehensive analysis of
the long-term effects of Grameen Bank's initiatives on economic development.
Understanding the sustained impact over an extended period would provide more robust
insights.

External factors:
The study might not account for external factors that could influence economic development
in Bangladesh. Factors such as natural disasters, global economic fluctuations, political
instability, or changes in government policies may have an impact on the outcomes but might
not be adequately addressed or controlled in the study.

Long-term impact assessment:

Assessing the long-term impact of Grameen Bank's interventions on economic development
can be challenging. Economic development is a complex and multifaceted process influenced
by various factors, including macroeconomic policies, political stability, infrastructure
development, and global economic conditions. Isolating the specific impact of Grameen Bank
and attributing changes solely to its interventions may be difficult
26

Sample size and representativeness:

The study might have a limited sample size, focusing only on a particular region, community,
or specific borrowers of Grameen Bank. This could affect the representativeness of the
findings and limit the ability to make broader generalizations about the economic

Data limitations:
The study's conclusions are dependent on the availability and quality of data. Data collection
may be challenging in some areas, particularly in remote or underdeveloped regions, which
could lead to incomplete or biased information. Moreover, data reliability and accuracy could
be potential concerns, as self-reported data from borrowers might introduce biases or
measurement errors.development of Bangladesh as a whole.

To mitigate these limitations, researchers should clearly acknowledge them in the study,
provide a detailed description of the methodology employed, and cautiously interpret the
findings within the specified context. Additionally, replication studies, broader data
collection efforts, and incorporating a comparative analysis with other similar initiatives can
help validate and strengthen the conclusions drawn from the study. It is important to consider
these limitations when interpreting the findings of the study and drawing conclusions about
the economic development of Bangladesh based on the case study of Grameen Bank.
27

Recommendations
Title: Recommendations for The Role of Micro-Credit in Economic Development of
Bangladesh:A Case Study on Grameen Bank

Abstract:
This study aims to provide recommendations for the economic development of Bangladesh,
focusing on the case study of Grameen Bank. Grameen Bank is a renowned microfinance
institution that has played a significant role in poverty alleviation and fostering
entrepreneurship in rural areas of Bangladesh. By analyzing the success and impact of
Grameen Bank, this study offers key recommendations to further enhance economic
development in the country.

1. Strengthening Access to Financial Services:

• Increase the outreach of microfinance institutions (MFIs) to underserved areas,
particularly in remote rural regions.
• Collaborate with commercial banks and regulatory authorities to streamline the
process of obtaining formal financial services.
• Encourage the development of innovative financial products tailored to the needs of
the rural poor, such as savings, insurance, and mobile banking.
2. Promoting Entrepreneurship and Skill Development:
• Establish vocational training centers in rural areas to enhance skills and knowledge of
the local population.
• Support entrepreneurship development programs by providing access to capital,
mentorship, and business development services.
• Foster public-private partnerships to create employment opportunities in key sectors,
such as agriculture, manufacturing, and technology.
3. Enhancing Digital Infrastructure and Connectivity:
• Invest in expanding internet and mobile network coverage in rural areas to bridge the
digital divide.
• Promote digital literacy programs to ensure that individuals have the skills to leverage
digital technologies for economic activities.
• Encourage the adoption of e-commerce platforms and digital payment systems to
enable access to wider markets and facilitate financial transactions.
28

4. Encouraging Sustainable Agriculture and Rural Development:

• Provide farmers with access to credit, technical assistance, and modern farming
practices to improve productivity and income.
• Promote organic farming and sustainable agriculture techniques to enhance
environmental sustainability.
• Develop value chains and market linkages for agricultural products to ensure fair
prices and reduce post-harvest losses.
5. Strengthening Social Safety Nets:
• Enhance social protection programs, including targeted subsidies, conditional cash
transfers, and healthcare coverage, to mitigate the impact of economic shocks.
• Improve coordination among different government agencies and NGOs to ensure
effective delivery of social safety net programs.
• Conduct regular impact assessments to monitor the effectiveness and efficiency of
social safety net interventions.
6. Encouraging Women's Empowerment and Gender Equality:
• Promote women's access to education, healthcare, and economic opportunities to
empower them economically.
• Implement policies and programs that address gender-based discrimination and
violence.
• Facilitate the inclusion of women in decision-making processes at all levels, including
within the financial sector.

Conclusion:
The recommendations provided in this study aim to build upon the success of Grameen Bank
and address the multifaceted challenges faced by Bangladesh in its pursuit of economic
development. By focusing on financial inclusion, entrepreneurship, digital connectivity,
sustainable agriculture, social safety nets, and gender equality, Bangladesh can foster
inclusive and sustainable economic growth, reduce poverty, and improve the overall well-
being of its population.
29

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THE END